Answer:
(a) 7.5%
(b) 8.5%
(c) 9.5%
Explanation:
(a) Foreign country inflation rate - US inflation rate = Foreign country risk free rate - US risk free rate
Lets foreign country inflation rate = X
X - 1.5 = 8 - 2
X - 1.5 = 6
X = 6 + 1.5
= 7.5%
(b)
Lets foreign country infllation rate = X
X - 1.5 = 9 - 2
X - 1.5 = 7
X = 7 + 1.5
= 8.5%
(c)
Lets foreign country inflation rate = X
X - 1.5 = 10 - 2
X - 1.5 = 8
X = 7 + 1.5
= 9.5%
Answer: $14,426.43
Explanation:
At the end of 4 months and assuming a 12 months and 365 days in a year, the formula to be used to calculate how much Rahul owes is;
We use the formula:
Amount owed = Present Value ( 1 + rate/365 ) ^ 365 * time period
Amount owed = 14,000 * ( 1 + 0.09/365 ) ^ (365 *4/12 )
Amount owed = $14,426.43
The state of competition may be affected by the structure of the market, regulations, ownership, the nature of products, and the behaviours of certain economic agents. Central concepts to describe the state of competition include: Market power, or the ability of firms to charge prices above competitive levels.