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2 years ago

The inflation rate is measured by calculating the percentage change in the consumer price index. True or False

Business

1 answer:

kkurt [141]2 years ago

5 0

Answer:

true

Explanation:

the consumer price index measures the average prices of a basket of goods and services, it includes housing costs, food, medical care, transportation, educational expenses, etc.

The current price of the CPI basket can be used to measure inflation by comparing it to the price of last year's basket ,or if you go a little further, you can compare it to the base year's basket of goods.

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Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $120,000 or $300,000 with equal

Ivanshal [37]

Answer:

a. If you require a risk premium of 8%, how much will you be willing to pay for the portfolio?

the expected value of our portfolio = ($120,000 x 50%) + ($300,000 x 50%) = $210,000

the current market price of the investment = $210,000 / 1.13 = $185,840.71

discount rate = 5% + 8% = 13%

b. Suppose the portfolio can be purchased for the amount you found in (a). What will the expected rate of return on the portfolio be?

13%, it should be equal to the discount rate

c. Now suppose you require a risk premium of 15%. What is the price you will be willing to pay now?

the current market price of the investment = $210,000 / 1.21 = $175,000

discount rate = 5% + 15% = 20%

d. Comparing your answers to (a) and (c), what do you conclude about the relationship between the required risk premium on a portfolio and the price at which the portfolio will sell?

the higher the risk premium, the lower the market price of the portfolio

4 0

3 years ago

Urgency, specific application, and size of order are examples of ________ segmentation variables for business markets.a. Situati

taurus [48]

Answer:

Letter a is correct. Situational factors.

Explanation:

Situational factors are defined as the set of temporary environmental factors that will influence consumer behavior in the purchasing process.

These may include:

the physical environment: physical characteristics that influence purchase such as the organization and size of space.
the social environment: influence of consumption by other people.
the task: convenience of purchase for some reason.
the time: time the person has to make a purchase.
antecedent psychological states: spirit and psychological states that influence people to buy.

4 0

3 years ago

To calculate your return on a stock: If you bought a stock at $80 and earned a $3.00 dividend over the year and at the end of th

grandymaker [24]

New value: $87
new-orig= $7
7/80= 0.0875=87.5%

7 0

3 years ago

In a market economy, a high price is a signal for:___________.1. Producers to supply more and consumers to buy less. 2. Producer

shepuryov [24]

Answer: Answer is 1

Explanation:

In a market economy, a high price is a signal for producers to supply more and consumers to buy less.

3 0

3 years ago

Read 2 more answers

b. Merchandise purchases were $53,000 and $86,000 for March and April, respectively. Typically, 20% of total purchases are paid

Evgen [1.6K]

Answer:

$58,740

Explanation:

The computation of the cash paid is shown below:

For March month

= March purchase × remaining percentage

= $53,000 × 80%

= $42,400

For April month

= April purchase × given percentage × after applying cash discount

= $86,000 × 20% × 95%

= $16,340

So, the total amount of cash paid would be

= $42,400 + $16,340

= $58,740

Simply we multiply the monthly percentage with their percentage criteria

6 0

3 years ago