Answer:
C. The insurer will deny J's request to add more insurance.
Explanation:
The Guaranteed Insurability Rider means extra policy which is an addition to insurance rider policy and allows the purchaser of the policy to purchase extra life insurance on the life of the insured at prearranged periods of time.
Usually, this ability to purchase extra life insurance ends at the age of 40 and since the J has just celebrated the 42nd birthday, therefore he will not be eligible to buy more death benefit.
Based on the above discussion, the answer shall be C. The insurer will deny J's request to add more insurance.
First, convert interest to the effective annual interest rate using this formula:
(1 + i/m)^m - 1, where m = 2 for semiannual and m = 12 for monthly. Then, use this formula to find the future worth:
F = P(1+i)^n, where P is $726.19 and <span>$855.20, respectively, for Card P and Q. n is equal to 4.
Card P: F = 1080.704
Card Q: F = 1206.284
Then, find the amount decrease by subtracting F - P.
Card P: F - P = $354.514
Card Q: F - P = $351.084
The difference between the two is $3.43. Thus, the answer is C.</span>
M/b ratios typically exceed one, which means that investors are willing to pay more for stocks than their accounting book values.
The Book value is the carrying amount of the company's assets minus the receivables (such as company liabilities) that exceed common stock. The term book value comes from the accounting practice of accounting for assets at their original costs.
The Book value of a company is total assets minus total liabilities. Total assets and total liabilities are included on the balance sheet of the annual and quarterly reports.
Book value refers to the value of the asset reported on the balance sheet, that is, the value of the asset after the accumulated depreciation has been recorded. Every company owns multiple assets. Therefore, every business also has a book value, which is the present value of the asset minus the liability or accrued debt.
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Answer: 1.76
Explanation:
Given the following :
R=1.02,
S0 = 100
u=1/d= 1.05
Strike(k) = 102
Total Payoff = (probability of upside × upside Payoff) + (probability of downside × downside Payoff)
Upside Price = u × S0 = 1.05 × 100 = 105
downside Price = S0/u = 100/1.05 = 95.24
Upside Payoff = upside price - strike rate =(105 - 102) = 3
Upside probability :
[e^(r - q) - d] / u - d
E = exponential, q = Dividend (Dividend is 0, since the stock does not pay dividend)
d = 1/d = 1/1.05 = 0.9523809
e = 2.7182818
[2.7182818^(1.02% - 0) - 0.9523809] / (1.05 - 0.9523809)
[1.0102521 - 0.9523809] / 0.0976191
0.0578712 / 0.0976191
= 0.5928266
Probability of downside = 1 - p(upside)
P(downside) = 1 - 0.5928266
P(downside) = 0.4071733
Therefore, total Payoff =
(0.5928266 × 3) + (0.4071733 × 0)
= 1.7784798
European. Call option:
Total Payoff / (1 + r%)
1.7784798 / (1 + 1.02%)
=1.7784798/ (1 + 0.0102)
= 1.7784798 / 1.0102
= 1.7605224
= 1.76
Answer: Air travel is a normal good and vacation travel by car is an inferior good
Explanation: What is a normal good and what is an inferior good.
Normal goods are those goods for which the demand rises as consumer income rises. While inferior goods are goods whose demand increases when consumer income decreases.
This therefore means that the demand of inferior goods is inversely related to the income of the consumer.
From the question above, we can say that car trips are inferior goods while the air travel are normal goods.
