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Rasek [7]
3 years ago
6

Suppose that the annual rate of returns on dollar deposits equals 2% and the rate of return on euro deposits is 1%. Furthermore,

assume that expected exchange rate in a year is $1.1=1 euro and the current exchange rate is $1.08=1 euro. Should you invest in dollar deposits or euro deposits?
Business
1 answer:
Oliga [24]3 years ago
5 0

Answer:

I should invest in dollar deposits.

Explanation:

Current exchange rate is 1 euro = $1.08

Assuming I have y euro, the equivalent in dollar is $1.08y

Rate of return on dollar deposit = 2% = 0.02

Return on investment = $1.08y + (0.02 × $1.08y) = $1.08y + $0.0216y = $1.1016y

Rate of return on euro deposit = 1% = 0.01

Return on investment = y euro + (0.01 × y euro) = y euro + 0.01 y euro = 1.01y euro = 1.01y × $1.08 = $1.0908y

I should invest in dollar deposits because the return on investment is greater than euro deposits.

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Publix is most likely in a(n) Recession.

Explanation:

A recession is as much a danger and a chance.The very worst situation is that a marketer reduces an ad budget while a rival raises the advertising budget. Because the costs of newspapers continue to drop considerably more quickly than most businesses, advertising ROI is often increasing in a recession.

A recession seems to be a surprise and inefficient companies are allowed to leave, however new firms will develop in recession. Declining asset prices may make buying a house cheaper. Better investors for the first time.

7 0
3 years ago
Two companies join together in partnership to pursue an area of mutual interest. this is called a(n) __________.
andrezito [222]
It is called Co-Branding
7 0
3 years ago
Lester, a hardware engineer, sells his old hatchback to buy a luxury sedan. As he starts driving the new car, he realizes that i
AlekseyPX

Answer:

Cognitive dissonance

Explanation:

Cognitive dissonance refers to conflicting ideas or beliefs that cause discomfort to an individual. Individuals tend to seek consonance between their expectations and reality.

In this case Lester expected to feel good about his purchase of a luxury since it should be a much better car than his old hatchback, butt he actually doesn't like to drive the larger and more luxurious sedan.

7 0
3 years ago
Amanda green has invested in a real estate trust that will get income from mortgage interest, loan origination fees and buying a
sveticcg [70]

A real estate trust that will get income from mortgage interest, loan origination fees and buying and selling mortgages is Real Estate Mortgage Trust (REMT) trust.

What is a mortgage?

  • A mortgage is a legal instrument of the common law which is used to create a security interest in real property held by a lender as a security for a debt, usually a mortgage loan.
  • Hypothec is the corresponding term in civil law jurisdictions, albeit with a wider sense, as it also covers non-possessory lien.
  • A mortgage in itself is not a debt, it is the lender's security for a debt.
  • It is a transfer of an interest in land (or the equivalent) from the owner to the mortgage lender, on the condition that this interest will be returned to the owner when the terms of the mortgage have been satisfied or performed.
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To learn more about mortgage: brainly.com/question/15074748

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8 0
2 years ago
What would you estimate as to the cost of equity if a stock sells for $40, pays a $4.25 dividend, and is expected to grow at a c
Goryan [66]

Answer:

15.63%

Explanation:

Calculation to determine cost of equity

Using this formula

P = D/(r-g)

Where,

P=40

D=4.25

g=0.05

r=?

Let plug in the formula

Cost of equity=40 = 4.25/(r-0.05)

Cost of equity=r = (4.25/40)+0.05

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Cost of equity=r =0.1563*100

Cost of equity = 15.63%

Therefore cost of equity is 15.63%

7 0
3 years ago
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