Answer:
c. An account that pays 0.5 %0.5% per month for three years.
Explanation:
We can evaluate all the option using following formula:
EAR = ( 1 + ( r / m ) )^m -1
a.
2.5% every six months for three years
r= 2.5% = 0.025 / 6 =
m = 12/6 = 2
EAR = ( 1 + 0.025 )^2 -1
EAR = 0.050625 = 5.06%
7.5% every 18 months for three years
r= 7.5% for 1.5 years = 7.5% / 18 = 0.4167% per month = 0.004167 per month
EAR = ( 1 + 0.004167 )^12 -1
EAR = 0.051166 = 5.12%
0.5% every month for three years
r= 0.5% = 0.005
EAR = ( 1 + 0.005 )^12 -1
EAR = 0.0616778 = 6.17%
We will prefer an account that pays 0.5 %0.5% per month for three years, it pays the highest return.
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Answer:
If RUS > RUK, then E < F ( C )
Explanation:
RUS = annual risk free rate in united states
RUK = annual risk free rate in United kingdom
F = futures price of $/BP for 1 year
E = spot exchange rate for $/BP
To get a higher the future price
this conditions must be met
The annual risk free rate of the united states must be higher than the annual risk free rate of the united kingdom. if this condition is met then the the British pound will have a forward premium ( F ) > ( E )
Israel kirzner believes entrepreneurs have a unique capability, which he calls entrepreneurial alertness, to spot existing opportunities for businesses.
Israel<span> Meir </span>Kirzner<span> is a British-born American economist. we can define the unique ability of </span>Entrepreneurial alertness that some people have as to recognize competitive limitations or imperfections in markets.
<span>the trading of votes by members of congress to obtain passage of projects that are of interest to one another is referred to as: Logrolling
In logrolling, two or more Congress could create an agreement that each of them will give their vote to support the bills that pushed by each of them, so they collectively gained more power in the office.</span>
