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Studentka2010 [4]
3 years ago
13

According to liquidity preference theory, the opportunity cost of holding money is Group of answer choices the difference betwee

n the inflation rate and the interest rate on bonds. the inflation rate. the cost of converting bonds to a medium of exchange. the interest rate on bonds. None of the options is correct.
Business
1 answer:
andreyandreev [35.5K]3 years ago
3 0

Answer:

The correct answer is letter "D": the interest rate on bonds.

Explanation:

Investors tend to keep their money liquid as cash, and expect attractive returns for sacrificing their liquidity, according to the Liquidity Preference Theory. Investors will pay more for short-term debt and the liquidity that comes with it, and they will also seek higher interest rates before taking on longer-term debt.

Thus, <em>the opportunity cost of holding money, according to the liquidity preference theory would be the returns obtained from investing in assets such as stocks or interest rates with bonds.</em>

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Please help. Describe how stocks are purchased by investors.
attashe74 [19]

Answer:

Investors most commonly buy and trade stock through brokers. You can set up an account by depositing cash or stocks in a brokerage account. Firms like Charles Schwab and Citigroup's Smith Barney unit offer brokerage accounts that can be managed online or with a broker in person.

5 0
3 years ago
Which is a commodity someone might invest in?
monitta

Answer:

b) natural resources

Explanation:

Natural resources refer to valuable materials found beneath, above, and on the earth's surface. They are naturally occurring, meaning no human effort is required in producing them. Natural resources make a good source of wealth. Examples of natural resources are land, mineral, oils and gas, forests, water, sunlight, wind, and many others.

Anyone with access to natural resources can invest to make them marketable products. Extraction of oil and refining is an example of investing in natural resources. Processing of trees to wood, use of solar to generate power are other examples.

6 0
3 years ago
Read 2 more answers
Robert sold his Lebec Corporation stock to his sister Karen for $8,000. Robert's cost basis in the stock was $15,000. Karen late
lara [203]

Answer:

$7,500

Explanation:

A few points must be considered in order to calculate ther realized gain.

1. Although Robert's stock in Lebec Corporation was $15,000 at cost, it was sold to Karen (his sister and related party) for $8000. Since it is related party transaction, the loss of $7000 ($15,000-$8,000) cannot be reported as a loss.

2. Karen's basis for the stock is $8000 (the amount she bought it from her brother).

3. Karen sold the stock to Dana for $15,500. The realized gain since Dana is not related is $15,500-$8,000= $7,500. This becomes the realized gain since it is an unrelated party transaction.

7 0
3 years ago
Credit cards are different from debit cards because
Rzqust [24]
Debit cards are used to pay for goods in shops and to withdraw money at cash machines. The money is automatically taken from your current account when you spend it, so you must have enough money in your account or an agreed overdraft to cover the transaction.

Where as..
A credit card, such as Barclaycard, isn't linked to your current account and is a credit facility that enables you to buy things immediately, up to a pre-arranged limit, and pay for them at a later date. The cost of the purchase is added to your credit card account and you get a statement every month.
5 0
4 years ago
Brian has just finished college. He wants to set up a small business to make and sell fireworks. He registers his company and ac
fiasKO [112]
<span>market economy market economy is the answer

I hope this helps!</span>
8 0
3 years ago
Read 2 more answers
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