Answer:
Investors will have to pay tax on the interest income received from the bonds.
Explanation:
Interest earned from corporate bonds and capital gained through corporate bond transactions is taxable income. The interest earned from a corporate bond is subject to taxation by both the federal and state governments.
The government will not sell sin Qua corporation bonds as it is a public company. Bonds do not pay interest quarterly but rather semi-annually or annually. Again, the maturity of the bond is determined at the time they are issued. Creditworthiness will only affect the bond price but not its maturity period.
Investors will have to pay tax on the interest income received from the bonds is thus the correct statement.
Answer:
consumer surplus will decrease.
Explanation:
Consumer surplus is defined as the difference between the price customers are willing to pay for a product and what they actually pay.
On the demand and supply curve it is indicated by the shaded area between equillibrum and demand curve as illustrated in the attached diagram.
For example let's assume the price a customer was willing to pay for a product was $50 and market price was $30
Initial consumer surplus= 50- 30= $20
Assume bmarket price increase to $40
The new consumer surplus is= 50- 40
Present consumer surplus= $10
So a price increase causes a decrease in the consumer surplus.
Answer:
The correct answer is (C)
Explanation:
Negative externalities occur when an individual or firm making a choice negatively affect other parties. A driver who recklessly drives a car on a busy highway is a negative externality because the amusement of the driver is negatively affecting other people. A negative externality arises when the benefit of a decision is less than the negative outcomes of that decision.
Answer:
Demand relationship is the relationship between the dominant prices of a good and the quantity that will be bought at that price.
Explanation:
Demand can be defined as the quantity of a good that consumers are ready to purchase at different prices at a given period of time.
The basic demand relationship is between potential prices of a good and the quantities that would be bought at those prices. The relationship is always a negative one, this implies that an increase in price will lead to a decrease in the quantity demanded. This negative relationship is represented in the downward slope of the consumer demand curve. Take for instance, if the price of a bag of rice rises from $10 to a price of $20, this is a huge price increase. This increase forces the consumer to demand less of that product at the price of $20 because the new price is more expensive and also very unreasonable for a bag of rice.
Answer:
Efficient market school.
Explanation:
Efficient market school is the market school which argues that forward exchange rates do the best possible job for forecasting future spot exchange rates, so investing in exchange rate forecasting services would be a waste of time because it is impossible to have a consistent alpha generation on a risk adjusted excess returns basis as market prices are only affected by new informations.
The efficient market school also known as the efficient market hypothesis (EMH) is a hypothesis that states that asset (share) prices reflect all information and it is very much impossible to consistently beat the market.
Also, forward exchange rates are exchange rates controlling foreign exchange transactions at a specific future date or time.
<em>Hence, according to the efficient market school it would be a waste of time investing in exchange rate forecasting services because all the information about an asset or security is already factored into their prices and as a result of the randomness of the market. </em>
