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2 years ago

An Empirical Bargaining Model with Digit Bias – A Study on Auto Loan Monthly Payments

Business

1 answer:

dedylja [7]2 years ago

3 0

Answer:

This study was carried on by Jiang, Zhenling, during the first semester of 2019 and it involved more than 35 million auto loans in the US. The author determined that monthly payments carrying a $9 ending digit, e.g. $199, had a highest interest rate charged. While those monthly payments carrying a $0 ending digit, e.g. $200, had the lowest interest rate charged. African American and Latin consumers were the most negatively affected groups by the higher interest rates.

The study showed that an effective bargaining tactic would decrease total payments significantly. This research also includes a lot of other information regarding the total economic effects of ending digit bias.

Explanation:

I personally guess that many car sellers and auto loans institutions tempt both African American and Latin consumers by using apparently lower monthly payments (psychologically we all consider $199 to be much cheaper than $200) in order to charge higher interest rates. They also probably offer longer term loans, e.g. 5-6 year loans instead of 3-4 year loans.

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The approved detail design resulting from the __________ serves as a basis for making the decision to begin production. Systems

wel

Answer: Critical Design Review

Explanation:

A Critical Design Review is referred to as a review that's fine in order o ensure that a system can be able to move into fabrication, and test and also ensure that the stated performance requirements are met.

The approved detail design resulting from the critical design review serves as a basis for making the decision to begin production.

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2 years ago

A bond will sell at a premium when its coupon interest rate: is lower than the market interest rate on similar bonds. equals the

DiKsa [7]

A bond will sell at premium when its coupon interest rate <u>exceeds the market interest rate on similar bonds.</u>

Explanation:

Premium bonds are the bonds that are trading above par in the market. Further on the bond would trade on premium only when it offers a coupon rate exceeding the market rate that is being offered on similar bonds.

In simple lay man's language, the term premium and discount can be understood to carry a crude definition of high and low demand. When the demand would be high, the bonds would fetch a higher value and vice-versa.

Thus Bonds would highly be valued when it is paying interest that is greater than the interest prevailing in the market contemporarily.

8 0

3 years ago

A stock has an average expected return of 10.8 percent for the next year. The beta of the stock is 1.22. The T-Bill rate is 5% a

uranmaximum [27]

Answer: 4.7%

Explanation:

Expected return is calculated as:

= Risk free return + Beta ( Market risk premium)

10.8% = 5% + (1.22 × Market risk premium)

10.8% - 5% = 1.22market risk premium

5.8%/1.22 = market risk premium

Market risk premium = 0.058/1.22

Market risk premium = 0.047

Market risk premium = 4.7%

7 0

2 years ago

A court ruling against the wrongful dismissal of employees is a development in the _____ component of the general

monitta

<span>A court ruling against the wrongful dismissal of employees is a development in the political or legal component of the general. Wrongful dismissal or termination of contract of employment without proper process violates the law of contracts. When this happens, the court takes the employee's rights into consideration in filing damages.</span>

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2 years ago

On September 15, 2021, Oliver's Mortuary received a $7,200, nine-month note bearing interest at an annual rate of 8% from the es

Sphinxa [80]

Answer: PLease see answer below

Explanation:

Date Account title and explanation Debit Credit

Dec 31 Interest receivable $168

2021 Interest revenue $168

Calculation

Interest =Principal x time x rate

= 7,200 x 8% x 3.5 /12(15th september to 31st December)

=$168

4 0

3 years ago