Answer:
The correct answer is letter "C": The effective annual rate equals the annual percentage rate when interest is compounded annually.
Explanation:
Interest Rate is the cost of borrowing money, expressed as a percentage of the loan amount. Interest rates are the primary yardsticks for measuring how much return lenders will get.
The effective annual interest rate is a way of restating the annual interest rate so that it takes into account the effects of compounding. Using the effective annual interest rate helps us understand how differently a loan or investment performs if it compounds annually, semiannually, monthly, or in any other time frame. If compounded annually, the effective interest rate equals the annual percentage rate.
Answer:
A loss of 69%
Explanation:
Price per share $100
Equity invested $10,000
Funds taken from broker $10,000 at an Interest rate 9.00%
Total investment $20,000
Price change 30.00% less
Margin required 30.00%
Total shares purchased from investing = 200 shares
The shares decrease in value by 30%: $20,000 * 0.30 = $6,000.
You pay interest of = $10,000 * 0.09 = $900.
The rate of return will be:
"$6,000 － $900" /"$10,000" = - 0.69 = - 69%
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Answer:
III. when marginal cost is above average cost, average cost is constant.
Explanation:
Marginal Cost (MC) is the addition to total cost , when an additional variable factor is employed. MC = TCn - TCn-1
Average Total Cost AC is the Total (Fixed &Variable Cost) per unit variable factor employed. AC = TC / Q
MC AC relationship : <u>MC > AC - AC rise</u> ; MC < AC - AC fall ; MC = AC - AC minimum. '3rd' is opposite to the 1st underlined MC AC relationship.
2nd & 4th are other right components of MC AC relationship. MC < AC - AC fall ; MC = AC - AC minimum (MC cuts AC at its minimum)
1st is also correct as when more variable factors are employed - total cost first increases at a decreasing rate (MC falls) & then it increases at an increasing rate (MC rises). MC curve cuts AC curve at its minimum (MC = AC - AC minimum)
Answer: $223,000 long-term capital gain.
Explanation:
LEGALLY MARRIED couples who file a JOINT TAX RETURN, selling their Place of PRIMARY RESIDENCE are allowed to reduce by $500,000, their Long-term capital gain.
That means that Mr. and Mrs. Frazier, bless their souls, are allowed to remove $500,000 from the total $723,000 and as such recognize only $223,000 as tax consequence on long-term capital gain.
I guess Uncle Sam likes marriages.
If you need any clarification do react or comment.
