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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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Which statement is true? A. The vaule of money that you save increases over time B. The vaulue if money remains constant over ti
Alex_Xolod [135]

Answer:

A

Explanation:

You can think about this like how you put money into a bank and let the interest pile up over time.

7 0
3 years ago
Mittelstaedt Inc., buys 60 percent of the outstanding stock of Sherry, Inc. Sherry owns a piece of land that cost $207,000 but h
vovikov84 [41]

Answer:

A. $549000

Explanation:

Given information

Number of outstanding stock of Sherry, Inc = 60%

The cost of the land = $207,000

Fair value at the acquisition date = $549,000

By considering the above information, the value reflected in a consolidated balance sheet is $549,000.

The historical principle says that the fixed assets should be recorded at the purchase price or acquisition cost only and the same is to be considered

8 0
2 years ago
The firm's policy is to have finished goods inventory on hand at the end of the month that is equal to 70 percent of the next mo
Dahasolnce [82]

Answer:

\left[\begin{array}{ccccc}& &September&October&November\\&$sales&6000&6800&5600\\&$Desired ending&4760&3920&4270\\&$Total Needs&10760&10720&9870\\&$beginning&4200&4760&3920\\&$Production Requirement&6560&5960&5950\\\end{array}\right]

MISSING INFORMATION ATTACHED

Explanation:

\left[\begin{array}{ccccc}& &September&October&November\\&$sales&6000&6800&5600\\&$Desired ending&4760&3920&4270\\&$Total Needs&10760&10720&9870\\&$beginning&4200&4760&3920\\&$Production Requirement&6560&5960&5950\\\end{array}\right]

The sales forecasted plus the desired ending inventory is the complete needs the sales department expect to be fullfill

Then, as the company has a beginning invneotry each period a portion of this needs is already fullfil thus, the difference are the production requirements.

7 0
3 years ago
1 - Describe two justifications for the need for professional financial planning advice
icang [17]

Answer:

Financial planning is a step-by-step approach to meet one's life goals. A financial plan acts as a guide as you go through life's journey. Essentially, it helps you be in control of your income, expenses and investments such that you can manage your money and achieve your goals.

Explanation:

4 0
3 years ago
A peer-review board for alternative dispute resolution usually consists of: A. an equal number of employee representatives and m
kow [346]

Answer:

The answer is option A) A peer-review board for alternative dispute resolution usually consists of: an equal number of employee representatives and management appointees

Explanation:

Alternative dispute resolution is an affordable, less time consuming and less formal way of settling workplace disputes. To achieve this feat, a peer review board is constituted.

A peer review board usually consists of employers and management appointees and it could be a voluntary decision on their art to participate.

The pool of individuals nominated to be part of  the peer review board is considered objective and unbiased in their assessment of the issue to be resolved. They are also deemed skillful in the art of listening and arbitration.

8 0
3 years ago
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