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2 years ago

When a "bubble" arises, asset prices are driven by:

Business

1 answer:

Crazy boy [7]2 years ago

7 0

Answer:

d. shifts in market psychology and successive waves of irrational exuberance.

Explanation:

Bubble in respect to financial market means an unexpected and non-explainable reason. This although the economists believes arises because of the emotional attachment and effects on an asset. As for example: when an asset is made using the specific raw material which is discovered to be precious in the terms it is ancient then, automatically the price of the asset increases in the market.

Thus, this is nothing but a market psychology that is basically an effect of emotional concerns of individual mindset, which is irrational.

This theory is explain by Keynesian the economists.

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5 An insured has four separate but identical policies written by different insurers to cover her $100,000 building. Each policy

qaws [65]

Answer:

each policy will pay $25,000 of the loss

Explanation:

Based on the scenario being described within the question it can be said that the each policy will pay $25,000 of the loss. This is an equal share for each policy and is due to them having the pro rata liability clause. This clause states that a policy is only liable for an equal percentage of the loss if the insurer has other policies from other companies. As in this case.

5 0

3 years ago

The bond has a 12% annual coupon rate, a $1,000 par value, it matures in 15 years and pays coupon quarterly. The current bond pr

Vladimir79 [104]

Answer:

A. 14.28%

Explanation:

As per Approximation formula,

Quarterly yield = (A + B / C) * 100

A = Quarterly coupon = 12% of 1,000 / 4 =30

B = (Redemption - Price value / Number of coupon) = (1,000 - 900) / (15 * 4)

= 1.667

C= (Redemption value + Price / 2) = 1,000 + 900 / 2 = 1,900 /2 = 950

Quarterly yield = 30 + 1.66667 / 950 = 31.6667 / 950 = 0.03333

Quarterly yield = 3.33%

Using the calculator, we get exact Ytm quarterly = 3.3925%

Effective amount yield = {(1 + 0.033925)^4 - 1} * 100

Effective amount yield = 0.142762 * 100

Effective amount yield = 14.2762%

Effective amount yield = 14.28%

4 0

3 years ago

The manager at Vertical Wire Productions reported total sales revenue of $800,000. The variable expenses were $600,000, and ther

Brilliant_brown [7]

Answer:

$BEP_{dollars} = 500,000$

Explanation:

<u>The first step</u> will be get the contribtuion margin:

$Sales\: Revenue - Variable \:Cost = Contribution \:Margin$

800,000 - 6000,000 = 200,000

This is the amount after variables cost used to pay the fixed cost and make a gain.

Second, we calcualte the contribution margin ratio

$\frac{Contribution \:Margin}{Sales\: Revenue} = Contribution\: Margin\: Ratio$

200,000/800,000 = 0.25

Per dollar of sales 25 cents are available to pay the fixed cost.

Now, we calculate the break even point in dollars

$\frac{Fixed\:Cost}{Contribution\: Margin \:Ratio} = Break\: Even\: Point_{dollars}$

$\frac{125,000}{.025} = 500,000$

5 0

3 years ago

Starr Company reports the following information for August. Raw materials purchased on account $ 76,200 Direct materials used in

il63 [147K]

Answer:

1. Raw materials purchased.

Raw Materials Account $ 76,200 (debit)

Account Payable $ 76,200 (credit)

2. Direct materials used in production.

Work In Progress Account $48,000 (debit)

Raw Materials Account $48,000 (credit)

3. Direct labor used in production.

Work In Progress Account $15,350 (debit)

Wages and Salaries $15,350 (credit)

4. Applied overhead.

Work In Progress Account $18,360 (debit)

Manufacturing Overhead Account $18,360 (credit)

Explanation:

1. Raw materials purchased.

Raw Materials Account $ 76,200 (debit)

Account Payable $ 76,200 (credit)

Recognise the Assets of Raw Materials and a Liability - Account Receivable

2. Direct materials used in production.

Work In Progress Account $48,000 (debit)

Raw Materials Account $48,000 (credit)

De-recognise the Raw Materials used in production and recognise the cost in Work In Progress Account

3. Direct labor used in production.

Work In Progress Account $15,350 (debit)

Wages and Salaries $15,350 (credit)

Recognise the labor cost in Work In Progress Account and de-recognise the Wages and Salaries Account with the amount applied to production

4. Applied overhead.

Work In Progress Account $18,360 (debit)

Manufacturing Overhead Account $18,360 (credit)

De-recognise the Manufacturing Overheads used in production and recognise the cost in Work In Progress Account

4 0

2 years ago

When a tax is levied on a good, the buyers and sellers of the good share the burden, A. provided the tax is levied on the seller

Morgarella [4.7K]

Answer:

Here all of these options are wrong , the correct answer is regardless of how the tax is levied the burden of tax would be shared by both the seller and buyer.

Explanation:

Tax can be said as primary source of income for the government. When a tax is levied on the goods , the burden of that would have to be bear by both buyer and seller , irrelevant of how that levied . If the taxes are high then the demand by buyer would be less and seller would receive low price because less people would buy and n the case where taxes are low demand would be high and seller would receive high prices ,in both cases tax would be levied on both seller and buyer and how much it would be depends upon the elasticity of demand and supply. So all the statements given here are false or invalid.

6 0

2 years ago