If the fed sells $5 billion of u. S. Bonds in the open market and the reserve requirement is 5 percent, m1 will eventually decrease by $100 billion.
<h3>What is the effect of the sale of bonds on M1?</h3>
M1 is comprised of the most liquid money supply e.g. currency, demand deposits. When the Fed sells bonds they are conducting a contractionary monetary policy. The aim of this policy is to reduce the supply of money in the economy.
Reduction in the value of money = value of bonds sold / reserve requirement
$5 billion /0.05 = $100 billion.
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Answer:
The financial advantage over option 2 is $ 20 000 and $ 60 000 in total sales value.
Explanation:
The company has 2 options for the obsolete desk calculators. They can either upgrade them or sell them as they are. We need to compare the 2 options to evaluate their advantage or disadvantage.
To upgrade the calculators we need to spend $200000. However we will then be able to sell the calculators for $260000. This equates to a $60 000 gain
Under option 2 we will just sell the calculators as is for $ 40 000.
Option 1 is the better option. The financial advantage over option 2 is thus $ 20 000 and $ 60 000 in total.
Workplaces offering advancement options would give employees more of a goal and further influence them to try harder at their job. Every employee deserves the chance to be rewarded for their hard effort and anything against that is inhumane.
How can unpaid volunteer work help you choose a career? By volunteering you are able to observe a career from the inside, you gain experience and work skills, you develop helpful contacts, and you learn what employers want out of an employee.
Answer:
Expected return is: 7.37% and the Standard deviation is: 24.96%
Explanation:
Correlation between fund S&B=0,0667
Standard Deviation of Fund S=41%
Standard Deviation of Fund(B)=30%
E(R) of Stock Fund S=12%
E(R) of Stock Fund B=5%
Covariance between the funds = Standard Deviation of Fund(B) × Standard Deviation of Fund S × correlation between these funds
Cov = 0.41 × 0.30 × 0.0667 = 0.008204
Now minimum variance portfolio is found by applying:
W min(S)=(SDB)^2-Cov(B,S) / ((SDS)^2+(SDB)^2-2Cov(B,S)
W min(S) = 0.338431
W min(B) = 1-0.338431=0.661569
1) E(r)min= 0.338431 × 12% + 0.661569 × 5% = 7.37%
2) Standard Deviation:
SD Min = (Ws^2XSDs^2+Wb^2XSDb^2+2XWsWb*Cov(s,B)^1/2
SDmin=(0.338431^2 × 0.41^2 + 0.661569^2 × 0.3^2 + 2 × 0.338431 × 0.661569 × 0.008204)^1/2
SDmin=24.96%
