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Mice21 [21]
3 years ago
10

Ric wants to invest in government securities that promise to pay $1,000 at maturity. The opportunity cost (interest rate) of hol

ding the security is 6.80%. Assuming that both investments have equal risk and Eric's investment time horizon is flexible, which of the following investment options is priced lower?
An investment that matures in four years
An investment that matures in five years
Business
1 answer:
lutik1710 [3]3 years ago
4 0

Answer: An investment that matures in five years

Explanation:

Both investments may be of equal risks, but by virtue of having different maturity dates, they will not be priced the same.

This is because the discount rate (opportunity cost) will discount the maturity value more the longer the investment is such that the present value is lower.

4 year investment

= 1,000 / (1.068)^4

= $768.63

5 year investment

= 1,000 / (1.068)^5

= $719.69

The 5 year investment will have a lower present value and will be charged lower.

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Abigail buys cookies at a local gas station for $2.00 per pack. At the grocery store, she can get 10 packs for $20. Online, they
Goryan [66]

Abigail can buy the cookies at any of the merchants; the cost is the same. hence, Option B is the correct statement.

<h3 /><h3>What do you mean by financial advice?</h3>

The manner of attractiveness withinside the commercial enterprise of advising others with admiration to the making plans and/or the execution of recommendations in respect of selecting, purchasing, or promoting economic merchandise to satisfy investment, threat management, or threat mitigation objectives is referred to as Financial Advice.

Hence, Abigail can buy the cookies at any of the merchants; the cost is the same. Option B is the correct statement.

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7 0
2 years ago
a _____ loan is intended to help consumers who have an unhealthy credit situation caused by overusing their credit.
rusak2 [61]

A  consolidation loan is intended to help consumers who have an unhealthy credit situation caused by overusing their credit. Thus the correct option is D.

<h3>What is a loan?</h3>

An amount given by any financial institution to any individual in advance on a certain rate of interest that they need to repay during the given time is called a loan.

A consolidation loan is meant to assist individuals with credit problems brought on by excessive credit use. A debt reduction approach known as a debt consolidation loan is taking out a new loan to settle a number of bills.

Therefore, option D is appropriate.

Learn more about the consolidation loan, here:

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The complete question is probably

A _____ loan is intended to help consumers who have an unhealthy credit situation caused by overusing their credit.

a. personal

b. single-payment

c. buy-down

d. consolidation

e. standard

8 0
1 year ago
What is bartering and why do more people do it today than maybe 5 years ago?
Sedbober [7]
Bartering is like trading and because now things are a little more expensive <span />
4 0
3 years ago
Assume a consumer is spending all her income on two goods: X and Y. At the current consumption combination of the two goods, if
xeze [42]

Answer:

The customer should buy more of good X.

Explanation:

Marginal utility is the additional satisfaction derived from spending an additional unit of money on a commodity.

In the scenario above, since more additional satisfaction is derived from purchasing good X than it is derived from purchasing good Y, then more of good X should be purchased, because this is clearly the commodity that offers more satisfaction.

Therefore, in order for utility to be maximized, more money should be spent on more of good X.

7 0
3 years ago
Read 2 more answers
​If the demand for apples is highly elastic and the supply is highly inelastic, then if a tax is imposed on apples it will be pa
mars1129 [50]

Answer:​largely by the sellers of apples.

Explanation: A highly elastic Demand is the demand that changes at the slightest increase in the price of a good or service.

A highly inelastic elastic supply is the situation where the supply of goods and services does not change even when the taxes or cost of production of the good or service increases.

When supply is inelastic, the sellers will bear the burden of the increased tax as increasing the price of the apples will cause the customers to look for alternatives.

5 0
3 years ago
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