You would want to use Real GDP because it looks at the inflation and deflation due to price "changes" over the years. Nominal GDP only looks at the current market of today's economy. So with this being said you only want to use Real GDP if your looking back at the economy's history, but you would look at Nominal GDP if you wanted to know the current economy status.
Answer:
The correct answer is: Option; premium or option price.
Explanation:
As the name implies, an option refers to the right that is given to a potential buyer of capital goods to exercise currency trading within a specified time and amount. To carry out this process, an in-depth study must be carried out in order to make the best investment decision, for the benefit of both parties.
For its part, the price of the premium or option refers to the amount paid by the buyer in order to exercise the legitimate right over the capital asset. The premium corresponds to the value paid in excess and that represents a higher value for the seller within market estimates.
Answer:
A
Explanation:
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
Security A : 11 = 1( 1 + r)^15
11^(1/15) = 1( 1 + r)
1.173 = 1 + r
r = 1.173 - 1
r = 17.33%
Security A : 16 = 1( 1 + r)^15
16^(1/15) = 1( 1 + r)
1.20 = 1 + r
r = 1.2 - 1
r = 0.2
r = 20%
Security B earned a higher average annual rate of return as 20% is greater than 17.33%
Answer:The cost of capital that will make both investments equal is 17.045%
Explanation:
Investment A
$1.5 million will be received in perpetuity we can there use perpetuity formula to Value investment A.
Value of Investment A = 1500 000/r
Investment B
$1.2 Million will be received in Investment B with a growth rate of 3% will then use Gordon's growth rate model to value investment B.
Value of investment B = (1200 000 x (1+0.03))/(r - 0.03)
Value of investment B = 1236000/(r - 0.03)
1500 000/r = 1236000/(r - 0.03)
1236000(r) = 1500000(r - 0.03)
(r - 0.03) = 1236000( r)/1500000
r - 0.03 = 0.824r
r - 0.824r = 0.03 = 0.176r = 0.03
r = 0.03/0.176 = 0.170454545
R = 17.045%
The cost of capital that will make both investments to be equal is 17.045%
Answer: Business profile
Explanation:
Business profile is referred to as or known as the profile that is designed in order to have an overview of the organization, business and their business plan. It tends to provide the readers with quick overview of the business, also including the values and the objectives, so as they tend to get the immediate feel of what they are doing and where they are headed.
