Answer: A, B & C
Explanation:
Bonds generate a stable and constant cashflow for the holders and are not as risky as stock because bond holders at the very least are some of the people who will get priority in any monies raised if the company goes into liquidation. Bonds are debt so their interest are paid first from company revenue regardless of if profits were made or not further reinforcing that they are better than stock in terms of risk.
As mentioned in the text, bonds had flooded the market due to the low interest rates that the Fed kept. This is indeed because in a low interest rate environment, companies can offer bonds at lower coupon rates which reduces their cost of borrowing.
When the stock market is turbulent, the Fixed Income(bonds) market are a known safe haven that investors flee to because here they can earn stable incomes with less risk and because of the increase in demand, companies offer bonds and at lower rates too due to the Law of Supply.
<span>The Fed sells of reserve bonds to affect the money supply on the open market. Therefore, the fed sells $5 billion worth of T-bonds, then that means they will be taking out a big lump out of your bank put down. In the meantime, the fed sells might pump $5/billion into the financial system by incomplete set aside banking into the grouping and it’s more like $50/billion and the Fed gets the Bonds and the financial system gets the money. Will have to the fed wish to take out cash from the market, it could sell those bonds and take cash out of the economy in trade for bond.</span>
Answer:
a. $955.20
b. $2.7579 x 10¹⁷
Explanation:
a. Simple interest
The value in 2014 of the investment at a 10% simple interest rate is:
b. Compound interest
The value in 2014 of the investment at a 10% compound interest rate is:
Answer:
(a) $1.55; 32.32
(b) $1.96; 33.16
Explanation:
a) EPS (20X1) = $310,000 ÷ 200,000
= $1.55
P/E ratio (20X1) = Price ÷ EPS
= $53.20 ÷ $1.55
= 32.32
b) EPS (20X2) = $392,000 ÷ 200,000
= $1.96
P/E ratio (20X2) = Price ÷ EPS
= $65 ÷ $1.96
= 33.16
c) The stock price increased by 22.18% while EPS only increased 26.45%.
Answer:
C.Sole proprietorship
Explanation:
Which of the following organizational structures led to massive increases in the deployment of capital in the US and UK in the nineteenth century?a. Limited liability companies
b. Partnerships
c. Sole proprietorships
d. Worker cooperatives
Sole Proprietorship is a business structure owned by one person. He manages the business alone. Handles the risk and profits alone. This form of business pays more in tax to the government than Big business owners or investors.
In the nineteenth century, there was a shift in industrial revolution. Before ,lots of the people worked as labourers in large textile factories, rubber plants, shoe factories etc. The citizens of the these countries saw the need to establish there businesses as Governments began establish incentives that makes small business owners to thrive and survive.
