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3 years ago

Deflation is generally considered by economists to be a positive economic situation because it creates strong job growth.

Business

1 answer:

Drupady [299]3 years ago

3 0

Answer:

The correct answer is False.

Explanation:

The disadvantages of deflation are basically the reduction of economic activity, the increase in unemployment, the increase in economic uncertainty, the increase in real interest rates due to falling prices, falling demand.

The danger of this situation comes from how difficult it is to get out of it, since a vicious circle is created by which when demand falls, companies are reduced their profits by having to reduce prices to get sales, as a result , they have to reduce costs, which means they have to cut jobs. In turn, if there are people who run out of work, demand will continue to decrease as they will stop buying as well.

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Consider two stocks, A and B. Stock A has an expected return of 10% and a beta of 1.2. Stock B has an expected return of 14% and

barxatty [35]

Answer:

B; it offers an expected excess return of 1.8%

Explanation:

Here are the options :

A; it offers an expected excess return of .2%A; it offers an expected excess return of 2.2%B; it offers an expected excess return of 1.8%B; it offers an expected return of 2.4%

to determine which stock is the better buy, we have to calculate the expected return of the stocks using CAPM

According to the capital asset price model: Expected rate of return = risk free + beta x (market rate of return - risk free rate of return)

Stock A = 5% + 1.2(9% - 5%) = 9.8%

Stock B = 5% + 1.8(9% - 5%) = 12.20%

The next step is to determine the excess return

stated expected return - calculated expected return = excess return

Stock A's excess return = 10% - 9.8% - 0.2%

Stock B's excess return = 14 - 12.20 = 1.8%

Security B would be considered because it has a higher excess return

8 0

3 years ago

For a business to continue, money must be available to finance future growth. <br> t or f

skelet666 [1.2K]

This is true!
Hope this helps. :)

3 0

3 years ago

Read 2 more answers

How are payroll taxes different from personal income taxes?

marta [7]

D) They pay for specific social programs rather than general government activities.

5 0

3 years ago

Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2018. The manufacturing cost

Llana [10]

Answer:

$89,350

Explanation:

Calculation to determine the outstanding balance of the lease liability in Lone Star's December 31, 2018, balance sheet

First step is to calculate the Balance after first payment

Initial lease liability $130,000

Less: First payment $23,000

Balance after first payment $107,000

Second step is to calculate the Interest expense for June 30,2021

Interest expense for June 30,2021= $107,000*5%

Interest expense for June 30,2021=$5,350

Third step is to calculate the Principal payment for June 30,2021

Principal payment for June 30,2021=$23,000-$5,350

Principal payment for June 30,2021=$17,650

Now let calculate the Outstanding balance on June

Balance after first payment. $107,000

Less: Principal payment for June $17,650

Outstanding balance on June $89,350

Therefore the outstanding balance of the lease liability in Lone Star's December 31, 2018, balance sheet is $89,350

8 0

3 years ago

When Theo complained out loud that the hotel restaurant did not serve breakfast late enough in the morning, a hotel worker overh

11111nata11111 [884]

Answer:

The correct answer is E. respond quickly

Explanation:

Respond quickly is a great strategy to gain customers' fidelity.

7 0

3 years ago