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matrenka [14]
4 years ago
15

An important basic characteristic of common stocks that makes them a suitable type of investment for the separate account of var

iable annuities is
Business
1 answer:
ziro4ka [17]4 years ago
5 0

Complete Question:

An important basic characteristic of common stocks that makes them a suitable type of investment for the separate account of variable annuities is:

Group of answer choices

A) the safety of the principal invested.

B) changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices.

C) the yield is always higher than mortgage yields.

D) the yield is always higher than bond yields.

Answer:

B) changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices.

Explanation:

An important basic characteristic of common stocks that makes them a suitable type of investment for the separate account of variable annuities is changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices.

Generally, common stocks are considered by financial experts or broker-dealers to be a suitable type of investment of variable annuities because the prices of common stocks in the market are not fixed and as such they are affected by economical changes such as inflation or recession.

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The company ABC just paid $2 dividend per share, which will grow at 15% for the next three dividends. Afterwards, the dividends
Vika [28.1K]

Answer:

P0 = $137.2988907 rounded off to $137.30

Explanation:

The two stage growth model of DDM will be used to calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,

P0 = D0 * (1+g1) / (1+r)  +  D0 * (1+g1)^2 / (1+r)^2  +  ...  +  D0 * (1+g1)^n / (1+r)^n  +   [(D0 * (1+g1)^n  *  (1+g2) /  (r - g2))  /  (1+r)^n]

Where,

  • g1 is the initial growth rate
  • g2 is the constant growth rate
  • D0 is the dividend paid today or most recently
  • r is the required rate of return

P0 = 2 * (1+0.15) / (1+0.07)  +  2 * (1+0.15)^2 / (1+0.07)^2  +

2 * (1+0.15)^3 / (1+0.07)^3  +  

[(2 * (1+0.15)^3 * (1+0.05) / (0.07 - 0.05))  /  (1+0.07)^3]

P0 = $137.2988907 rounded off to $137.30

7 0
3 years ago
Without the consumer, what would the overall effect be on the economy?
choli [55]

Answer:

Consumers are basis for any economy to work out.It is the consumers for which the country works and makes sure to fulfil the demand of the market. New businesses come into existence because they create needs in the consumers and fulfil those needs. These businesses become a part of the economy and therefore give an input.

If there are no consumers, there will be o demands and the produces will have no needs or demands to fulfil which would lead to less production and therefore leading towards the fall of the economy.

7 0
3 years ago
Which of the following is true of a stock dividend? Multiple Choice It is a liability on the balance sheet. The decision to decl
ivolga24 [154]

Answer:

Yes it is true that a stock dividend does not affect total equity.

Explanation:

A stock dividend is a non cash payment given to shareholders. Instead of cash, additional shares that is equivalent to the earnings that accrue is given to shareholders.

While this may increase the number of shares held, it does not affect total equity.

One of the benefits of stock dividends tax exemption and retained equity which translates to additional investment.

However, the additional; shares created could dilute the share prices.

4 0
4 years ago
Which category of GDP does each of the following items count in? Enter one of the following letters to correspond to consumption
elena-14-01-66 [18.8K]

Explanation:

-Nissan produces a car at its Tennessee plant in December, but does not intend to sell it until after the end of the year __DNC__ .

<em> This transaction does not count because GDP is measured in one year. Nissan sell will be accounted in the next year GDP. </em>

-An auto parts maker buys an idle textile plant in North Carolina with the intent of converting it to a distribution center_I__.

<em>This is private investment of the auto parts maker. </em>

-The U.S. Army rents a warehouse to store surplus equipment __G__.

<em>This is a expense of the U.S government. </em>

-A state employees' pension fund in California buys $10 million in corporate bonds__G__.

<em>This is a expense of the U.S government. </em>

-A local bakery buys 500 pounds of flour to make bread __I__.

<em>This is private investment of the bakery. </em>

-A doctor buys a painting to hang in his office waiting area from an artist on Etsy __I__

<em>This is private investment because if his office looks better maybe this will attract more clients. </em>

-A family rents a beach house for a week's vacation __C__.

<em>This is household’s consumption. </em>

-A retiree in Chicago receives a Social Security check from the U.S. Treasury__G___  

<em>This is an expense of the U.S government</em>.

-A factory in the U.S. produces chemicals and sells them to a firm in Canada __NX___ .

<em>This fits in the net exports account as an export.  </em>

7 0
3 years ago
In may, the price of a pair of jeans was 250% of its wholesale cost. in june, the price was reduced by 25%. after an additional
Lorico [155]
We have to go backwards:
After the discount in July ( 50 % ), the cost of jeans is $25.50
So the price before this discount was 2 * $22.50 = $45
In June, the price was reduced by 25%.
45 ------------------75%
x --------------------100 %
45 : x = 75 : 100
45 * 100 = 75 x
4,500 = 75 x
x = 4,500 : 75
x = $60
Finally, in May the price was 250% of its wholesale cost.
60 ----------------- 250%
x -------------------100 %
60 : x = 250 : 100
6,000 = 250x
x = 6,000 : 250
x = $24
Answer: The cost of the jeans in the wholesale was $24.

4 0
3 years ago
Read 2 more answers
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