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tia_tia [17]
3 years ago
7

Suppose Big Bank offers an interest rate of 8.5​% on both savings and​ loans, and Bank A offers an interest rate of 9.0​% on bot

h savings and loans. a. What profit opportunity is​ available?
Business
1 answer:
lianna [129]3 years ago
4 0

Answer:

C) Take a loan from big bank at 8.5% and save the money in Bank A at 9.0%

Explanation:

If you take a loan from Big Bank at 8.5%, and then deposit that money into Bank A in order to receive 9% interest rate, you will be earning 0.5%. This is a form of arbitrage, since you are simultaneously obtaining a "cheap" loan and immediately depositing the money at another bank that pays a higher interest rate.

Arbitrage is a type of trading, usually involves trading securities and commodities, and is basically represents earning money on market inefficiencies. Some argue that arbitrage is the base of all types of trading, but the difference is that arbitrage would be the most efficient type of trading. If you buy a stock and hold it for a certain period, that qualify as arbitrage, but if you buy and sell the same stock simultaneously and make a profit out of it, then that is arbitrage but it is also being a very efficient trader.

In this case, you could actually be making money without investing a cent.

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On March 1st, Mr. Smithe signed up for a fitness program at Fit Co. and paid $960 for the entire program upfront. The program in
vichka [17]

Answer:

Revenue - March = $160

Explanation:

The accrual principle in accounting states that the revenues for a period should match the expenses for that particular period and any revenue or expense should be recorded in the period to which it relates to. This means that the upfront fee received by Fit Co. is a liability and should not be recorded as a revenue until it is earned. So, by providing two sessions in the month of March, Fit Co. has earned revenue for 2 sessions out of the twelve. Thus, at the end of March, Fit Co. should record a revenue of,

Revenue - march = 960 * 2/12 = $160

8 0
2 years ago
How do margin trades magnify both the upside potential and the downside risk of an investment position?
klio [65]

Answer and Explanation:

Margin trades work this way because they allow them to extend the amount of money invested regardless of whether the security's price drops or rises. In a more simplified way, we can state that the margin trade allows that even if the price of a security goes up or down, the invested money presents a percentage of gain or loss much bigger than the original value. This is because this money was deposited as a loan guarantee, allowing interest to run on it, increasing it.

4 0
2 years ago
Barbara operates a sporting goods store. She uses the cash method and treats inventory as nonincidental supplies. At the beginni
hoa [83]

Answer:

$454,000

Explanation:

Ending inventory is the value of the inventory in the store at the end of the year.

Goods are purchased and added to the the beginning inventory, the sale for the period is deducted from it. the residual value is the value of ending Inventory.

In This question it is assumed that there is $26,000 of beginning inventory of the goods. $470,000 of the purchases were made and at the end of the year there was $42,000 balance of inventory.

We can calculate the deduction value as follow

Ending Inventory = Beginning Inventory + Purchases - deduction

$42000 = $26,000 + $470,000 - deduction

$42000 = $496,000 - deduction

Deduction = $496,000 - $42,000 = $454,000

5 0
3 years ago
what was a benefit of square inc. that differentiated it from the other pos systems that were available at the time it first lau
Mice21 [21]

Small businesses were able to afford to accept credit and debit card transactions because a flat fee was charged per transaction.

Smaller companies and individual vendors were able to accept credit and debit cards for payment since they didn't need to invest in expensive servers or infrastructure. Servers at restaurants were able to process customer payments right at the table, increasing the speed at which they could turn over tables.

Smaller groups and individual carriers had been capable of taking delivery of credit and debit cards for the price considering the fact that they did not need to spend money on high-priced servers or infrastructure. This led organizations to attention to how their personnel was prompted and managed and led to the development of a principle Y management fashion that specializes in the force for character self-achievement. McGregor's perspective places the obligation for performance on managers in addition to subordinates.

Learn more about The Benefits of square inc. here:-brainly.com/question/5777247

#SPJ4

3 0
1 year ago
Which of the following statements regarding perpetuities is​ FALSE? A. A perpetuity is a stream of equal cash flows that occurs
Xelga [282]

Answer:

The answer is: C) PV of a perpetuity​ = StartFraction r Over Upper C EndFraction (I guess this means PV = r / C, which is FALSE)

Explanation:

The formula for calculating the present value of a perpetuity is:

                        PV = C / r

Where PV = Present Value, C = cash flow, r = discount rate.

A perpetuity is a stream of equal cash flows that lasts forever (perpetually).

The formula for calculating the present value of a perpetuity is simple, so there is no reason to spend time calculating the present value of each cash flow, since there are infinite cash flows.

A consol bond s a type of perpetuity issued by the British government (also by the US government)

7 0
3 years ago
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