Answer:
d. The cost of producing blue jeans will fall, and the supply curve for blue jeans will shift to the right
Explanation:
If the price of cotton falls, the cost of producing blue jeans would fall. As a result of the fall in the cost of production, more producers would be attracted to the industry and production would increase. Increase in supply of blue jeans would shift the supply curve to the right.
I hope my answer helps you
A 4% S/A coupon bond with 4 coupons remaining has a BEY of 8.00%, is mathematically given as
DP=95.696. Option D is correct
<h3>What is the dirty price of this bond?</h3>
Generally, dirty price is simply defined as It's important to note that a "dirty price" is simply a bond pricing quotation that takes into account both the coupon rate and any interest that has already accumulated on the bond.
In conclusion, Dirty price
DP = (Clean price + interest Accrued)
Therefore
DP=0.80*(4%*100/2)+2*(1-(1+4%)^(-3.20))/(4%)+100/(1+4%)^(3.20)
DP=95.696
CQ
A4% S/A coupon bond with 4 coupons remaining has a BEY of 8.00%. You buy the bond a little over a month before you get the first coupon. Specifically, the fraction of the 6-month period that has already elapsed is 0.80.
Calculate the dirty price of this bond.
O 81.370
85.216
93.471
o 95.696
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This is what i found Answer 1
Risk-Adjusted Asset Base
The calculation of the risk-adjusted asset base for a bank is as below-
Risk-adjusted asset = (Cash × 0%) + (municipal security × 20%) + (home mortgages × 50%) + (Commercial loans × 100%)
= (20 × 0%) + (100 × 20%) + (500 × 50%) + (300$ × 100%)
= 0 + 20 + 250 + 300
= $570 million
The outcome shows that the risk-adjusted or weighted asset based for the bank will be $570 million.
Tier1 and Tier 2 Capital:
If the bank has no off-balance sheet activity then minimum required level of Tier 1 and Tier 2 capital will be-
Tier 1 capital = Risk-weighted asset × 4%
= $570 × 4%
= $22.8 million
Tier 2 capital = Maximum of 1.25% of risk-weighted asset
= $570 × 1.25%
= $7.125 million
Total capital = $22.8 + $7.125 => $29.925 million
The outcomes indicate that the minimum required level of Tier1 and Tier
2 capital is $22.8 million and $7.125 million for the bank.
Bank Comply with Capital Requirements:
If the bank has Tier 1 capital of $25 million and Tier 2 capital of $15
million then it will comply with its capital requirements of $29.925
million. It is because in this situation, total capital of bank is $37
million that is higher than the above calculated capital of $29.925
million.
Impact of off-Balance Sheet Activities on Capital Requirements
The addition of off-balance sheet activities might increase the capital
requirement of the bank. It is because an off-balance sheet items is a
financial contract that can create credit loss for the company due to
credit risk. So, in case of adding off-balance sheet activities, a bank
will require more capital to cover credit loss. Along with this, it can
also increase the minimum ratio of capital to risk-weighted assets from
8% and in that situation; the bank will need more capital (Carmichael
& Graham, 2012).
Answer 2
Probability of Repayment and Risk Premium
A).
If the rate on a one-year treasury bill is 6% and in case of loan
default, no payments are expected on financial securities then the
probability of repayment and the risk premium on 1 year AA-rated loan
yielding 9 percent will be-
Probability of Repayment:
The following formula can be useful to determine probability of repayment.
P = (1 + I) / (1 + k)
Where,
I = 6%
k = 9%
Then, ...you have $2.19 left :D
Answer:
Dennis, age 25, needs lifetime life insurance protection. His agent showed him a chart displaying yearly renewable term premiums and level-premiums for the next ten years. The level premiums were always higher than the yearly renewable term premiums. Based on this chart, Dennis is convinced he should purchase yearly renewable term insurance. What is Dennis overlooking?
"Age" and "Amount of coverage" is the important factor that is being overlooked.
Explanation:
"Age" and "Amount of coverage" is the important factor that is being overlooked.
In level premium insurance, premium prices remain unchanged throughout the term whereas, in yearly renewable term premiums, premium rates rise as the policies age.
Additionally, in level premium, the amount of coverage offered increases over time at no additional expense.
A costumer-oriented organization places customer satisfaction at the core of each of its business decisions, it focuses on helping customers to meet their long-term needs and wants. An organization that uses this is Chron