A purpose of government regulation in a mixed-market economy is to protect A) Property rights
Answer: 9.7%
Explanation:
Given Data
Rf = Risk free return = 6%,
Rpm = Risk premium = 4%,
Beta = 0.9
Wd = Debt = 20%
rd = cost of debt = 8%
We = equity = 80%
Re = Rf + Beta (Rpm)
= 0.06 +0.9 (0.04)
= 0.096 * 100
= 9.6%
Unlevered Equity Cost ;
ReU= Wd × rd + We × re
= 0.20 × 8% + 0.80 × 9.6%
= 9.28%
Levered Equity Cost:
New Debt = 60%,
New Equity = 40%,
New rd = 9%
ReL = ReU + (ReU - rd) (D ÷ E)
= 9.28% + (9.28% - 9%) (0.60 ÷ 0.40)
= 0.097 * 100
= 9.7%
You reply that "OMOs are the purchase and sale of government securities. To increase the money supply we will buy government securities which increases the amount of reserves in the banking system and fuels deposit expansion".
<u>Option: A</u>
<u>Explanation:</u>
The action of central bank to offer or take liquidity from or into a bank or a collection of banks in its exchange rate currencies is understood as an open market operation or OMO. The central bank is the only origin of such policy which may either purchase or sell the bonds of government on the open market or in what is now often the acceptable option, engage into a repo or protected lending agreement with a commercial bank: the central bank lend the monetary as a reserve over a given period of time and concurrently selects the qualified asset as security.
Here the Chair of the Federal Reserve Board explained OMO for the purpose of their use in the scenario of increasing money supply, by purchasing or selling the bonds or securities of public authorities to eligible bodies for the increment of assets in banking sector to drive the expansion of deposits.
Answer:
B) inside director
Explanation:
An inside director is a member of the board of directors that is also an employee of the company. Usually inside directors should be part of the top management of the company, but in some particular cases that may not apply (e.g. in European cooperatives unions are represented by one member in the board).
It doesn't matter if the directors are inside or outside directors (don't work in the company), they all have a duty of care to the company.
Answer:
c. Exchange creates value by moving goods from parties who value them less to parties who value them more.
Explanation:
Exchange is described as the process of changing some goods for some other goods.
Exchange clearly provides you with the goods you value for, and in exchange for those goods you pay the goods you do not value.
This, results in adding value to the goods acquired by you, and adds value to the goods given by you for the person to whom it is exchanges.
As for example when a cloth is purchased by me for $100 then such adds the value to cloth and because it was worth less than $100 for the seller it has added value to the cloth.
