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Westkost [7]
2 years ago
8

A dealer forecasts that the discount rate on a 60-day bill will be 5.10%. The current discount rate on a 90-day bill is 5.30%. W

hat is the highest 30-day repo rate the dealer can afford to pay and still expect to break even on a repo? Explain.
Business
1 answer:
patriot [66]2 years ago
4 0

Answer:

The maximum rate is 5.65%.

Explanation:

The break-even 30-day repo rate is the rate at which an investor can make zero profit by carrying the following described trading:

Initially raise 30-day repo at x rate; invest in 90-day bill at 5.30%;

As the 30-day repo is matured, raise fund from 60-day bill at 5.10% to repay the 30-day repo;

Then as the 60-day bill matures, use the proceed from 90-day bill to repay the amount.

In other word, we have the below calculation to illustrate the trading:

Amount repay to 02 fund raising ( through 30-day repo and 60-day bill) = Amount receipt from 90-day bill investment

[1 + x*30/365] x [ 1 +  5.1% *60/365 ] = 1 + 5.30% * 90/365

<=> 1 + x*30/365 = 1.004646 <=> x = 5.65%.

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8 0
3 years ago
Which of the following statements about the free market is correct?
BARSIC [14]
C!! :) the free market provides people with the goods they wabt at thr price they're willing to pay
3 0
3 years ago
The financial reporting (disclosure) system is based on the electronic data tagging language called
dangina [55]

Answer: eXtensible business reporting language (XBRL)

Explanation:

The financial reporting (disclosure) system that is based on the electronic data tagging language is referred to as the eXtensible business reporting language (XBRL).

XBRL is freely available and a global framework that is used for the exchange of business information and it also allows expression of semantics which is required in reporting of business.

4 0
3 years ago
QS 9-13 Note receivable interest and maturity LO P4 On December 1, Daw Co. accepts a $12,000, 45-day, 7% note from a customer. (
iragen [17]

Answer and Explanation:

The journal entries are shown below;

a. Interest receivable Dr ($12,000 × 7% × 30 days ÷ 360 days) $70

        To Interest revenue $70

(Being the interest revenue is recorded)

For recording this we debited the interest receivable as it increased the asset and credited the interest revenue as it also increased the revenue

b. Cash Dr $12,105

           To interest receivable  $70

           To interest revenue ($12,000 × 7% × 15 days ÷ 360 days) $35

           To Note receivable $12,000

(being cash received is recorded)

For recording this we debited the cash as it increased the assets and credited the interest receivable, interest revenue and note receivable as it decreased the asset and increased the revenue

3 0
2 years ago
People with expertise tend to have more influence using ___, whereas those with a strong legitimate power base are usually more
BARSIC [14]

Answer:

C. persuasion; silent authority

Explanation:

Influence tactics can be regarded as steps that can be taken by people in order to exert influence on others in a particular organization, thereby bringing about achieving their goals. If successfully applied, influence tactics can help junior managers or lower level that lack substantial sources of power to be able to exert impact on both behavior and decisions of others within that organization.

Silent Authority can be regarded as silent application of authority, which can be elaborated as when someone complies with a particular request as a result of the requester’s legitimate hierarchical power and role expectations of the target person. This condition is often been referred to as deference to authority. As regards to deference, it takes place, where one comply with ones boss in completion of particular task, let say this task falls within one's job scope and ones boss has the right in making this request, then we can say the influence strategy works without persuasion or negotiation.

As an expert ,one would have broad as well as deep competence in terms of knowledge, experience and skill, with help of practice and education in a specific field. Individuals that has expertise usually have influence with the use of persuasion.

Power provide a person or unit with

opportunity to exert influence as regards organizational outcomes. Influence can be regarded as power in action. It should be noted that People with expertise tend to have more influence using persuasion, whereas those with a strong legitimate power base are usually more successful applying silent authority.

5 0
3 years ago
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