The following financial statement information is from five separate companies:
1 answer:
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Answer:
4. The demand for gasoline-powered automobiles would increase and the equilibrium price of gasoline-powered automobiles would increase.
Explanation:
Substitute goods are goods that can be used in place of each other.
If the price of electric automobiles rises, the automobile becomes more expensive for consumers. Consumers would reduce the quantity demanded of the electric automobile and shift its demand to gas powered automobiles.
As a result, the demand for gas automobiles increases and the equilibrium price would increase too.
I hope my answer helps you
Answer: B. Corporate Bonds and T-Bills
Explanation:
As you want to be 95% certain, this would require a 95% confidence interval.
With the given returns and standard deviations, the range of returns expected will be computed by;
Upper limit = Return + 2*SD
Lower limit Return - 2*SD
Stocks
Upper Limit = 18.37% + 2 (38.79%)
= 96.0%
Lower Limit = 18.37% - 2 (38.79%)
= -59.2%
S&P 500
Upper Limit = 11.84% + 2(20.01%)
= 51.9%
Lower Limit = 11.84% - 2(20.01%)
= -28.2%
Corporate Bonds
Upper Limit = 6.47% + 2(6.98%)
= 20.4%
Lower Limit = 6.47% - 2(6.98%)
= -7.5%
T-Bills
Upper Limit = 3.46% + 2(3.14%)
= 9.7%
Lower Limit = 3.46% - 2(3.14%)
= -2.8%
The lower limit show the lowest return achievable given a 95% confidence level.
<em>Only </em><em>Corporate Bonds</em><em> and </em><em>T-Bills</em><em> will give a minimum that is above 8% so they should be chosen. </em>
