Answer:
A) higher interest rates ; largely offset by the lower interest rates
Explanation:
If the government carries on an expansionary monetary policy, it will lower interest rates and increase the money supply in an attempt to increase aggregate demand. If at the same time it increases the interest rate it will pay for borrowing money (e.g. increase treasury bills' interest rates), that would make no sense since one policy would offset the other.
A government cannot increase the money supply and then increase the interest rates on treasury bills since that would lower the money supply again.
Answer:
$ - 1.96
Explanation:
After three months, Alice (long the contract) can buy the underlying by paying the delivery price of $40 which is $2 less than $42 the long position would have to pay if the contract was entered today.
DATA
Delivery price = $40
The three-month risk-free interest rate (with continuous compounding) =8%.
The current forward price = $42
Solution
So based on the present situation, Alice would be in $2 profit at the end of 3 months and Bob would be in $2 loss
Present value of Bob's loss (with continuous compounding) = 2\times e^{-0.08\times 0.25}
Present value of Bob's loss (with continuous compounding) = $1.96
The value of Bob's position is $ - 1.96
Answer:
weighted average cost of capital is minimized
Explanation:
Weighted average cost of capital (WACC) in accounting is the average rate of return a company is expected to compensate all its various investors by comparing its debt and equity structure.
The value of a firm is maximized when the weighted average cost of capital is minimized.
The formula to calculate the weighted average cost of capital (WACC) is:
WACC = ((E ÷ V) x Re) + (((D ÷ V) x Rd) x (1 - T))
Where;
Re=Cost of equity
Rd=Cost of debt
E=Market value of equity
D=Market value of debt
T=Effective tax rate
V=Total market value of combined equity and debt
I guess the correct answer is absolute threshold
You are studying in your dorm room, but your neighbor is blasting the television in the adjacent room. When you gently request that your neighbor turn the volume down until you cannot hear it, you are asking your neighbor to make the volume less than your absolute threshold.
Answer:
Turn the company into a public Enterprise.
Explanation:
Among options, the option to turn the company into a public enterprise is the most viable, thanks to the advantages of Public Enterprises including:
• Charges low prices.
• Provide essential facilities like education, health, free or at reduced prices.
• Ensures efficient control of industry.
• Expert administrative services.
• Money can be made available for R&D
• Private monopoly which would cause high prices is avoided.
• Foreign denominations of the economy are avoided.
In which, “money can be made available for R&D” is critical objective of government.
