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Tju [1.3M]
3 years ago
6

Suppose Baa-rated bonds currently yield 6%, while Aa-rated bonds yield 4%. Now suppose that due to an increase in the expected i

nflation rate, the yields on both bonds increase by 1%. What would happen to the confidence index? (Round your answers to 4 decimal places.)
Business
1 answer:
Leviafan [203]3 years ago
6 0

Answer:

Initial confidence index 66.67%

New confidence index 71.4%

Explanation:

Calculation of what would happen to the

confidence index

Using this formula

Confidence index=(Average yield for high grate bonds)/(Average yield for intermediate graded bonds)

Let plug in the formula

Initial confidence index=4%/6%

=0.6667 ×100

=66.67%

Due to increase in the yields the New Confidence Index will be;

New confidence index

=(4%+1%)/(6%+1%)

=5%/7%=0.7142857 or 0.714

0.714×100=71.4%

Hence, the New Confidence index tend to indicates slightly higher confidence and the reason for the increase in the index is the expectation of higher inflation.

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Consider the following demand schedule: Price Quantity Demanded $25 20 $20 40 $15 60 $10 80 What is the price elasticity of dema
mojhsa [17]

Answer:

3.05

1.38

0.725

Explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

Arc elasticity of demand = midpoint change in quantity demanded / midpoint change in price  

Midpoint change in quantity demanded = change in quantity demanded / average of both demands

Price $25-$20

change in quantity demanded  = 40 - 20 = 20

average of both demands = (40 + 20) /2 = 30

Midpoint change in quantity demanded = 20/30 = 0.67

midpoint change in price = change in price / average of both price

change in price = $25 - $20 = $5

average of both price = ($25 + $20) / 2 = 22.5

Price $20-$15

change in quantity demanded  = 60 - 40 = 20

average of both demands = (60 + 40) /2 = 50

Midpoint change in quantity demanded = 20/50 = 0.4

midpoint change in price = change in price / average of both price

change in price = $20 - $15 = $5

average of both price = ($15 + $20) / 2 = 17.5

midpoint change in price = 5 / 17.5 = 0.29

0.4/0.29 = 1.38

Price elasticity of demand = 0.67 / 0.22 = 3.05

change in quantity demanded  = 80 - 60 = 20

average of both demands = (80 + 60) /2 = 70

Midpoint change in quantity demanded = 20/70 = 0.29

midpoint change in price = change in price / average of both price

change in price = $15 - $10 = $5

average of both price = ($15 + $10) / 2 = 12.5

5/12.5 = 0.4

3 0
2 years ago
you sell 300 laptops per week at $690 per laptop. You sell 432 tablets per week at $590 per tablet. Which generates more dollars
vitfil [10]
300 X $690 = $207,000

432 X $590 = $254,880

Hope this helps!
STSN
4 0
3 years ago
Read 2 more answers
Romona Company expects its November sales to be 20​% higher than its October sales of $ 240 comma 000. All sales are on credit a
kotykmax [81]

Answer:

The cash balance on November 30 amounts to $155,700

Explanation:

Cash balance on November 30 = Beginning balance + Collection of cash from October sales + Collection of cash from November sales - Payments for October Purchases - Payments for November Purchases

where

Beginning balance is $13,700

Collection of cash from October sales =  October Sales × % amount collected

                                                                = $240,000 × 70%

                                                                = $168,000

Collection of cash from November sales =  November Sales × % amount collected

                                                                = $240,000 × 1.20 × 25%

                                                                = $72,000

Payments for October Purchases = October Purchases × % amount paid

                                                        = $70,000 × 65%

                                                        = $45,500

Payments for November Purchases = November Purchases × % amount paid

                                                        = $150,000 × 35%

                                                        = $52,500

Putting the values in the above formula

Cash balance on November 30 = $13,700 + $168,000 + $72,000 - $45,500 - $52,500

= $155,700

4 0
3 years ago
Department 1 completed work on 500 units and transferred them to Department 2. The cost of the units wasâ $750. What is the jour
horsena [70]

Answer:

B. Work-in-Process Inventory-Dept. 2 750 Work-in-Process Inventary Debit. 1 750

Explanation:

The journal entry to record this transaction is shown below:

Work-in-Process Inventory A/c - Department 2 $750

               To Work-in-Process Inventory A/c - Department 1 $750

(Being the completed units are transferred)

For recording this transaction we debited the work in process department 2 and credited the work in process department 1

4 0
3 years ago
f the steps are small, a step-variable cost may be approximated using a ______ cost function without significant loss in accurac
posledela

If the steps are small, a step-variable cost may be approximated using a Variable cost function without significant loss in accuracy.

<h3>Variable cost function</h3>
  • An expense for the company that varies according to how much is produced or sold is called a variable cost.
  • Depending on a company's production or sales volume, variable costs grow or fall. They climb as production rises and reduce as production declines.
  • It is a production cost whose level fluctuates in response to shifts in a business's manufacturing activities.
  • For instance, the raw materials required to make a product's components are regarded as variable costs because they frequently change depending on the volume of units produced.
  • The total variable cost curve depicts the relationship between total variable cost and the volume of output produced graphically.

To learn more about the Variable cost function refer to:

brainly.com/question/27996021

#SPJ4

7 0
2 years ago
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