Answer:
1) Equal to
2) Efficient
3) Equal to
4) Total
Explanation:
1) Marginal cost pricing is when you price the good equal to the extra cost of producing an extra good, so for example if I am a shoe manufacturer and the cost of producing an extra pair of shoe is $4 and I price the pair of shoe at $4 I am using marginal cost pricing.
2) When the producer is using marginal cost pricing the output produced is efficient as there is no dead weight loss and efficient level of output is produced.
3,4) If I produce 10 pairs of shoes and they cost me $500 then my average total cost for the pair of shoes is 500/10 = $50 and if I keep the price of the shoe at $50 I am using average cost pricing, so average cost pricing is keeping price equal to the average total cost.
Answer:
Contraction
Explanation:
The business cycle refers to the fluctuations that happen in an economic activity over time. This cycle has 4 stages that are:
-Expansion is when the economy grows and employment is higher.
-Peak is a transition between expansion and contraction and it is a point in which the economy reaches its highest output.
-Contraction is a stage in which growth stops and unemploymetnt rises.
-Trough is a stage in which the economy gets to its lowest point before a rise.
According to this, the answer is that in the context of the business cycle, Bruslon is most likely going through a period of contraction because there is an economic downturn that forced Loger's to lay off many employees.
Answer:
0.0185 or 1.85%
Explanation:
The payoff table shows that the portfolio is riskless with time-T value equal to $55.
Position
ST < 55
ST > 55
Buy stock: ST, ST
Short call: 0, -(ST - 55)
Long put: (55 - ST), 0
Total: 55, 55
The risk-free rate is: ($55/$54) - 1 =0.0185
=1.85%
Therefore the payoff of the portfolio is $1.85%
Answer:
c. $8.63
Explanation:
Missing word <em>"The forward LIBOR rate is 7%. All rates are compounded semiannually. A. $8.88
, B. $9.12
, C. $8.63
, D. $9.02"</em>
Principal = $1000, FRA Rate = 9 % per annum, LIBOR after 2 years = 7 % per annum, Compounding Frequency: Semi-Annual, Risk-Free Rate = 6 % per annum
The FRA matures 2 years or 24 months from now. Further, the Interest Rate that the FRA hedges will create an interest expense only at the end of the LIBOR loan period which is an additional 6 months after the 24 month period.
Hence, Exchange of Interest Expense at the end of 30 Months = (FRA Rate - LIBOR) x Principal (calculated on a semi-annual basis)
= (0.045 - 0.035) * 1000
= $10
Current Value of FRA = Present Value of Interest Expense at the end of the 30 Months Period
= 10 / [1+(0.06/2)]^(30/6)
= $8.6261
= $8.63
Answer:
Since there is not enough room here, I prepared the general ledger, the accounts receivable ledger and the schedule of accounts receivable in an excel spreadsheet (attached).
Explanation: