Saving is called a leak because money is not used in the economy in a particular way it is leaked out of the economy.
Explanation:
A planned investment is called an injection because capital investments are moved into the existing economy. This method is used to expand a business.
To avoid savings leakage savings must be equivalent to planned GDP equilibrium investment in the private closed economy. The leakage is the non-consumption use of income, that includes savings,taxes and imports.
At equilibrium GDP there will not be any changes in unplanned inventories because the expenditures will exactly equal the planned output levels that include consumer goods and services and planned investment. Hence, There is no unplanned investment and no unplanned inventory changes.
Answer:
The current portfolio has three stocks X, Y and Z and expected returns are are 6 percent, 19 percent, and 15 percent respectively.
Explanation:
The formula to calculate expected returns of the portfolio is:
Weighted return = Probability * Expected Return
The sum of weighted return is the expected return of the portfolio
Weighted return = (32% x 6% = 1.9%) + (20% x 19% = 3.8%) + (48% x 15% = 7.2%)
Expected return on portfolio = (1.9% + 3.8% + 7.2% = 12.9%)
The expected return of the portfolio is 12.9%
Net income
What is net income?
Net income can either be added to retained earnings by the company or given as a dividend to ordinary stockholders. Net earnings and net profit are frequently used as synonyms for net income because profit and earnings are used interchangeably for income (depending on usage in the UK and the US as well). Net income is frequently substituted with the word income, but this is not preferred owing to potential ambiguity. Because net income is often located on the last line of a company's financial statement, it is colloquially known as the bottom line (a related term is top line, meaning revenue, which forms the first line of the account statement).
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Answer:
C) 19 years
Explanation:
We must determine the net present value of the annual payments in a similar way to calculating the present value of annuities. We can use an excel spreadsheet and the present value formula with a 5.9% interest rate and then subtract the lifetime fee ($7,000):
Present value 14 years = $6,079 - $7,000 = -$921
Present value 16 years = $6,614 - $7,000 = -$386
Present value 19 years = $7,310 - $7,000 = $310
Present value 21 years = $7,711 - $7,000 = $711
<u>*present value 18 years = $7,091 - $7,000 = $91, but 18 years was not an option.</u>
