Through the expectations hypothesis and the liquidity preference theory of the term structure of interest rates, liquidity must be zero for the forward rate to be equal to the expectations of future short rates.
<h3 /><h3>What is expectation theory?</h3>
Corresponds to a forecast of short-term interest rates by analyzing them against current long-term interest rates.
Therefore, it is a theory used to assist in better understanding and forecasting short-term securities trading in the future.
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Answer:
Keep-or-drop decision
Explanation:
Keep-or-drop decision is taken when a manager is in a dilemma whether to continue a product line or segment or shut it down. The manager needs to analyse income statement related to the product line to understand the major issue with product line. If costs are more than revenue, then the product line needs to be shut down. If the reasons for incurring losses can be addressed and that revenue from the product line is more, then it is not dropped.
Therefore, manager takes a keep-or-drop decision.
Answer: $726,957.60
Explanation:
The debit to Lease Receivable is the present value of the payments to be made by B Corp. for the 8 years.
Payments are made twice a year so period is 16 periods.
Rate = 8% /2
= 4%
Present value = Payments * Present value of an annuity due factor, 16 periods, 4%
= 59,980 * 12.12
= $726,957.60
Answer:
The solution and the calculation is shown on the first , second , third and fourth uploaded image
Explanation:
Answer:
c. consumption and leisure are both normal goods and that the consumer likes diversity in his or her consumption bundles.
Explanation:
- A consumer's preference can determine the consumer utility properties between the different periods and can be measured by the tastes and preference by comparing the opportunity costs of that one item when every you buy an item.
- The consumption and the leisure are both the normal goods hat the consumer likes to have diversity in his consumption patterns and have a utility related to them.
