Answer:
1) The account will be worth $328,983 after 45 years.
Explanation:
If we make 9.75% annually for 45 years our account will be worth 5000 compounded at 9.75% for 45 years. So account worth after 45 years =
5000*1.0975^45=328,983
Answer:
$90.15
Explanation:
Calculation to determine the current share price
Current share price=$15/(.12− .06)/(1+0.12)^9
Current share price=$250/1.12^9
Current share price=$90.15
Therefore The current share price will be $90.15
Answer:
When interest rate are higher than coupon rate the company may want to purchase the bond in the open market
Explanation:
As the market value of the bond is considered as the present value of the coupon and maturity discounted at market rate a higher rate will make the present value of the bond to decrease therefore, below par. this makes the company a better option to purchase the bond rather than calling if it wants to retire the bonds.
Answer:
The correct answer is option c.
Explanation:
A consumer price index measures the change in the price level of weighted average of a basket of goods and services purchased by the consumers.
GDP deflator measures the change in the price of all domestically produced goods and services.
A change in the price of domestically produced industrial robots will be included in the GDP deflator as it includes the prices of all domestically produced goods and services.
But it will not be included in the CPI as the industrial robots are not purchased by consumers in households, they are not consumer goods.
Answer:
for those who have fixed nominal wages than for those who have nominal wages that adjust with inflation.
Explanation:
Inflation can be described as a situation where there is continuous rise in the general price level of commodities in a country over a period of time.
One of the categories of people are affect most during high and unexpected inflation are those who have fixed nominal wages. The reason is that during high and unexpected inflation, their nominal wages now worth less than it was before the high and unexpected inflation. In order to avoid this, some workers now negotiate nominal wages that adjust with inflation so that the real value or worth of their wages will not be seriously affected whenever there is a high and unexpected inflation.
Therefore, high and unexpected inflation has a greater cost those who have fixed nominal wages than for those who have nominal wages that adjust with inflation.