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3 years ago

A building owner is evaluating the following alternatives for leasing space in an office building for the next five years:

Business

1 answer:

Leno4ka [110]3 years ago

4 0

Answer:

Explanation:

The lease rent that depends upon CPI rate and operating expenses has more risk than normal increase in value rent alternatives. Reason being that CPI can be increased or decreased in future and this will affect the builder's cashflow.

Likewise, operating expense is also an increase or decrease because the builder's cashflow can increase or decrease .

The risk level of all the four alternatives is shown below

Net lease with steps- Less risky

Net lease with CPI - Highly risky

Gross lease - Moderately risky

Gross lease with CPI - Highly risky

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Answer:

In the United States, banks keep the entire value of all customer deposits in the bank vault to meet customer withdrawals. FALSE.

Banks keep only a portion of the customer deposits in the bank vault. A small portion is kept with the Fed called the Reserve Requirement.

Banks typically loan out a portion of customer deposits. TRUE.

Banks only loan out the portion of customer deposits that they did not leave with the Fed.

Bank runs occur when many customers attempt to withdraw deposits from a bank at the same time and the bank is unable to pay all customer withdrawals. TRUE.

When too many people try to withdraw from a bank, the bank might not meet these obligations because they loaned out money to people and those people were not yet due to pay back. This is a bank run.

The Federal Deposit Insurance Corporation (FDIC) protects bank depositors from bank failure. TRUE.

The fractional reserve banking system requires all banks to keep the total value of customer deposits in their vaults to prevent bank runs. FALSE.

As explained in the first paragraph, the Fed requires that banks keep a portion of customer deposits with the Fed instead of the total value of customer deposits.

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2 years ago

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Pani-rosa [81]

Answer:

The correct answer are option D for both questions.

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