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3 years ago

What would be most likely to happen if the discount rate were raised?

Business

1 answer:

Vika [28.1K]3 years ago

5 0

Answer:

B. Banks would make fewer loans

Explanation:

The discount rate is the interest rate that commercial banks pay to the Federal Reserve for loans received. Banks usually borrow to cater to their short-term cash-flow requirements. The discount rate is higher than the inter bank rate or the fed funds rate(the rate that banks charge each other for loans).

An increase in the discount rate causes the inter bank rate to rise (the Fed controls both rates). It means commercial banks are borrowing money from the Fed and each other at a higher interest rate. Consequently, commercial banks charge a higher interest rate for loans advanced to customers. An increase in interest rates at the banks discourages customers from borrowing.

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Wilbert's Clothing Stores just paid a $1.20 annual dividend and increases its dividend by 2.5 percent annually. You would like t

astraxan [27]

Answer:

For 100 shares, the mount that should be paid = $1766

Explanation:

We have to calculate the price of the stock in the 4th year because the investor cannot afford the stock in another 3 years.

Price of the stock = Do + g / ke - g

Dividend in current year = $1.2

Dividend after 1 year = 1.2 +2.5% (1.2)= 1.23

Dividend after 2 years = 1.23 + 2.5%(1.23) = 1.26075

Dividend after 3 years = 1.26075 + 2.5%(1.26) = 1.29227

Price in 4th year = 1.29227 + 2.5% / (0.10 - 0.025)

=1.29227 + 2.5%(1.29227)/0.075

= 17.66

Therefore, for 100 shares, the mount that should be paid = 17.66 * 100 = $1766

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3 years ago

Read 2 more answers

Assume that the interest rate on borrowings in India is 1 percent while the interest rate on bank deposits in a U.S. bank is 6 p

Marysya12 [62]

Answer:

there will be no adverse movement in exchange rates or interest rates.

Explanation:

John's best speculative element is that everything would remain in his favor; especially the exchange rates and there interest rates.

Assuming after his transaction there is a sudden negative or adverse effects on the interest rate from 6 percent to 1 percent for US deposit and a decline in the USD/Japanese Yen exchange rate he would be faced with great loses.

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3 years ago

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Beginning at point d if you were planning to purchase the good next week and the price would triple what new point would you mov

monitta

Answer:

Whazup

Explanation:

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3 years ago

Explain The stress on forbidding overspending. 1- 2- 3-

kirill115 [55]

Answer:

Explanation:

1- It starts an unhealthy cycle. Often, when you stress spend, you’re doing it to relieve stress and even bring some happiness. But it’s rather quick fix, In fact, it could cause more stress once you see you’re racking up debt. Rather than spend more, take time to actually address the problem.

2- It takes away from your financial goals. Whether you’re saving for a house, car, vacation, or retirement, you’re working toward some sort of financial goal. But, unfortunately, those dreams can often get lost amongst the shortcuts and spending sprees we go on when we’re stressed.

3- It all adds up. That car you just bought That’s $15. Or what about that burger you hurriedly grabbed for lunch the other day? That’s another $10. Maybe you’re drinking more beer than usual, and you’ve been a frequent bat customer. Even if you go on a stress-spending spree for only a few weeks, it’s definitely enough time to still wreak havoc on your finances. Just remember: small expenses add up.

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3 years ago

OSHA is an acronym that represents:

Svetach [21]

Your answer would be D.) Occupational safety and health administration

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3 years ago