Answer:
firms anticipate rival firms' decisions when they make their own decisions.
Explanation:
Game theory assumes that firms anticipate rival firms' decisions when they make their own decisions. It is very important and necessary for understanding firms operating in an oligopolistic market.
An oligopoly can be defined as a market structure comprising of a small number of firms (sellers) offering identical or similar products, wherein none can limit the significant influence of others.
Hence, it is a market structure that is distinguished by several characteristics, one of which is either similar or identical products and dominance by few firms.
This ultimately implies that, under the game theory, when firms makes a decision about their business, it is expected that they consider how the other firms would react to such decisions.
Christopher is a <u>comprehensive planner</u>.
<u>Explanation</u>:
Comprehensive planning is the process of determining goals and aspirations before proceeding with certain activities. Planning helps in doing our work efficiently and precisely.
Comprehensive planning guides the industry and organization towards its growth. Decision making process can be simplified.
In the above scenario, Christopher being an entrepreneur plans his activity before preceding it. He was focusing on gaming software and collects details regarding the same before starting his gaming software business. His planning nature helps him in completing his work conveniently.
Answer:
C.
Explanation:
Economic globalization is a historical process, the result of human innovation and technological progress. It refers to the increasing integrations of the economies arround the world, particularly through the movement of goods, services and capital across borders.
Is foundamentally the integration of various political, economic and cultural systems. The conversion and interconnection of people, places and ideas that collectively transforms the economy and increases the productivity and growth of businesses.
Answer:
The answer is:
10% fixed rate = Company X's external borrowing (rate);
11.8% fixed rate = Company Y's payment to X (rate);
LIBOR + 1.5% = Company X's payment to Y (rate);
LIBOR + 1.5% = Company Y's external borrowing rate.
Explanation:
First, X will borrow at 10% fixed and Y will borrow at LIBOR + 1.5% floating; both at notational principal of $10 million.
Then; they will enter into a interest swap where:
- X will pay to the swap the interest rate of Libor +1.5% and receive from the swap the fixed interest rate of 11.8%. Thus, X interest income and interest expenses will be: Borrowed at fixed 10% and payment at Libor+1.5% to the swap; Receipt of 11.8% from the Swap=> Net effect: X borrowed at LIBOR - 0.3% ( saving of 0.3%).
- Y will pay to the swap the fixed interest rate 11.8% and receive from the swap LIBOR +1.5%. Thus, Y interest income and interest expenses will be: Borrowed at LIBOR +1.5 and payment 11.8% fixed to the swap; Receipt of Libor + 1.5% from Bthe Swap=> Net effect: Y borrowed at 11.8% fixed ( saving of 0.2%).