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Grace [21]
3 years ago
9

Individuals may find it more advantageous to purchase claims from a financial intermediary rather than directly purchasing claim

s in capital markets because
I. intermediaries are better diversified than most individuals
II. intermediaries can exploit economies of scale in investing that individual investors cannot
III. intermediated investments usually offer higher rates of return than direct capital market claims
Business
1 answer:
SSSSS [86.1K]3 years ago
8 0

Answer:

The correct answer is I and II.

Explanation:

Individuals may find it more advantageous to purchase claims from a financial intermediary rather than directly purchasing claims in capital markets because of several reasons.  

The financial intermediaries such as commercial banks, mutual funds, insurance companies, pension funds, etc. are more diversified than individual investors. They provide a number of options for borrowing and lending.  

These intermediaries work on a larger scale than an individual investor. They are thus able to reap the advantages of economies of scale which an individual investor cannot.

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When a company invests in a foreign firm, and holds active ownership of the firm, then the company is said to be in a joint vent
Irina18 [472]

Answer: TRUE

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8 0
3 years ago
The nominal exchange rate is .80 euros per dollar and the real exchange rate is 4/3. Which of the following prices for a particu
Svetach [21]

Answer:

option (C) $5 in the U.S. and 3 euros in Italy

Explanation:

Data provided in the question:

Nominal exchange rate, E = 0.80 euros per dollar

Real exchange rate = \frac{4}{3}

Now,

Real exchange rate = [ Price of good in US ] ÷ [ Price of Good in Italy ]

= \frac{EPU}{PI}

Here,

PU = Price of US in dollars

PI = Price of Italy in Euros

Thus,

Real exchange in rate

\frac{4}{3} = \frac{0.8PU}{PI}

or

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hence,

we get

Ratio of Price of a good in US to Price of a Good in Italy = \frac{5}{3}

or

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4 0
3 years ago
A company has two divisions and evaluates management using return on investment. Division 1 currently makes a part that it sells
Anton [14]

Answer:

c. Division 1 should continue to do business with Division 2 because Division 1's variable cost per part is only $18.

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Since the variable cost per part is only $18 and Division 1  sells to Division 2 at $25, it is in the company's overall interest that business should continue between the two divisions.

The cost of getting the part from outside is $26.  This will incur more cost to the company and create excess capacity for Division 1.

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7 0
3 years ago
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