Answer:
A single commercial bank cannot lend more than its reserves because if checks are written for a higher amount than those reserves, the commercial bank will lose its reserves.
On the other hand, in a fractional reserve system, the system as a whole cannot lose reserves because they are backed up by other banks.
Finally, the relationship between the monetary multiplier and the reserve ratio is inversely proportional. If the reserve ratio goes up, the money multiplier will go down because banks will have less money available to loan, and therefore, will create a lesser amount of money.
Answer:
C) The goods are nonconforming because of the perfect tender rule.
Explanation:
Under UCC rules, the perfect tender rule applies to contracts where goods are sold, and it states that the seller must comply with the specifications that the buyer required. The perfect tender rule is used for products whose compliance with certain norms is important and vital, e.g. pharmaceutical drugs.
On the other hand, the substantial performance rule may apply to circumstances where the specifications are not that important, and a product close enough is considered sufficient. E.g. a contract for the sale of t-shirts that require a specific type of red might be satisfied by providing red t-shirts even if it wasn't the exact type of red.
The value of European Put option is 9.
<h3>What is Put option?</h3>
Under derivative securities market an option whose value depend on the underlying item where delivery is not made generally & net settlement done by squaring off the position and depends on the volatility of market.
Put Option is a bearish school of thought where investor thinks the market will decline & the value will be below the exercise price.
In hedging the position of investor make certain not better, therefore the value of put option lies between zero or difference value among the spot price & exercise price with discounting annual market interest rate:
Spot = 70
Exercise = 65
Future Price = 70 × 80% = 56
Rate = 4 % Compounded semi annually.
Value of Put = Spot Price - Exercise Price
= 56 - 65
= 9
Thus the value of put option will be 9 (65-56).
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<u>Answer:</u>
<em>Cameron is the sales director for his Northeast company's region. He's a rehional sales director.</em>
<u>Explanation:</u>
A Regional Sales Director is in charge of the closeout of a business' items or administrations in a predetermined district or geological region. The provincial project supervisor gives progressing backing to disseminate and create to item or administration.
Furthermore, the territorial project lead deals with a business group in the predefined zone. Subsequently, Cameron is the local deals Director.
Answer:
The stock A is most valuable as the fair value of Stock A is $100 which is more than the fair value of Stock B ( $83.33) and Stock C ($34.28).
Explanation:
to calculate the fair price of the stocks, we will use the DDM or dividend discount model. The DDM bases the value of a stock on the present value of the expected future dividends from the stock.
Let r be the discount rate which is 10%.
a.
The stock is like a perpetuity as it pays a constant dividend after equal intervals of time and for an indefinite period.
The price of this stock can be calculated as,
Price or P0 = Dividend / r
P0 = 10 / 0.1 = $100
b.
The constant growth model of DDM can be used to calculate the price of this stock as its dividends are growing at a constant rate forever.
P0 = D1 / r - g
Where,
- D1 is the dividend for the next period
- r is the cost of equity or discount rate
- g is the growth rate in dividends
P0 = 5 / (0.1 - 0.04)
P0 = $83.33
c.
The price of this stock can be calculated using the present of dividends.
P0 = 5 / (1+0.1) + 5 * (1+0.2) / (1+0.1)^2 + 5 * (1+0.2)^2 / (1+0.1)^3 +
5 * (1+0.2)^3 / (1+0.1)^4 + 5 * (1+0.2)^4 / (1+0.1)^5 + 5 * (1+0.2)^5 / (1+0.1)^6
P0 = $34.28
