Answer:
Consumers will consume less of the good whose relative price has risen and more of the good whose relative price has fallen.
Explanation:
The substitution effect refers to the change in the consumption of a good, due to the variation in its price, for the consumption of another good that becomes relatively cheaper. Thus, in the substitution effect if prices increase, consumers will consume a smaller amount of a given good, since its price has risen and a larger amount of the good whose relative price has become cheaper.
Answer:
Beta= 1.133
Explanation:
Giving the following information:
Coke:
beta= 1.1
Investment= $10,000
Wal-Mart:
beta= 1
Investment= $20,000
<u>First, we need to calculate the proportion of investments:</u>
Coke= 10,000/30,000= 0.33
Wal-Mart= 20,000/30,000= 0.77
<u>Now, to calculate the beta of the portfolio, we need to use the following formula:</u>
Beta= (proportion of investment A*beta A) + (proportion of investment B*beta B)
Beta= (0.33*1.1) + (0.77*1)
Beta= 1.133
Explanation:
PESTEL analysis is an acronym for Political, Economic, Socio-cultural, Technological, Environmental, and Legislative, and it is probably one of the most well-known top-level battle-hardened business planning tools. It was simply PEST analysis when we first came across the tool, some 30 years ago: the EL was added along the way to make it more all-encompassing.
When should you use it?
PESTEL is most commonly used in what economists refer to as a "macroeconomic analysis," which simply means thinking about future plans - to you and me, business planning and strategy. It is one of the most well-known and battle-tested top-level business planning tools.
Answer:
revenue bonds
Explanation:
A revenue bond is a Municipal bond used to fund projects that yield income and are secured through a particular source of revenue.
Characteristics of revenue bond.
1. It takes long time to maturity.
2. It yields more returns than the general obligation bond.
The purpose of a revenue bond is so that government can finance projects that generates income such as toll roads, airports, seaports, electricity projects, water projects etc.
Answer:
Both Common Stock and Additional Paid-In Capital in Excess of Par Value
Explanation:
The entries for rights issue will affect both accounts because:
1. The purchase of the common stock will increase the Common stock account
2. Additional Paid-in capital will be increased because it is noted in the question that the recipients of the rights issue are given the purchase of the common stock 'in excess of par value'. The excess amount will be credited to the additional PIC
