Answer:
............................................ NICE
Answer:
0.00125
Explanation:
In order to determine the spread of the dealer's quote, there is a need to undertstand that the first price quoted is known as bid price, which is the price the dealer is willing to purchase the securities while the second one is the ask price, the dealer's selling price.
From a conventional point of view(norm), the spread is the ask minus the bid price divided by 32 as shown thus:
spread=(89.16-89.12)/32=0.00125
Answer: In times of crisis or economic boom, changes such as the substitution effect and income effect may occur; in this case, Daniel suffers a variation in his work in the increase in the value of the hours worked and the decrease in hours worked per week; this can generate, or positive changes such as spending more time with his family and the appreciation of its workforce, as adverse effects, in which it stands out to be forced to respond to higher expenses due to the increase in the cost of living.
Answer: This rate setting scheme creates an adverse selection problem: Homeowners with houses on unstable soil are more likely to purchase insurance than homeowners with houses that rest on bedrock
Explanation:
California has its own earthquake insurance program for homeowners and the rates vary by the ZIP code, which depends on the proximity of nearest fault line.
However, critics claim that the people who set the rates ignored soil type. Some houses rest on bedrock while others sit on unstable soil. If the soil type is used, rate setting scheme creates an adverse selection problem.
An adverse selection problem is tendency of those in high-risk areas to purchase the insurance claim because there are higher chances they may get affected. Therefore, the homeowners with houses on unstable soil will more like buy insurance than the homeowners with houses that rest on bedrock.
Answer:
Initial outlay = $250,000
Annual cash inflow = 25% x $250,000 = $62,500 per annum
Payback period = <u>Initial outlay</u>
Annual cash inflow
= <u>$250,000</u>
$62,500
= 4 years
Explanation:
In this respect, there is need to calculate the annual cash inflow, which is 25% of initial outlay. Then, we will divide the initial outlay by the annual cashflow. This gives the payback period of the machine.