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grandymaker [24]
3 years ago
8

Assume market interest rates have risen substantially in the 5 years since an investor purchased Treasury bonds that were offeri

ng a 3% return over their 15-year life. If the investor sells now, he or she is likely to realize a total return that is:__________
A. greater than 6%.
B. less than 6%.
C. equal to 2%.
D. equal to 6%.
Business
1 answer:
Gnesinka [82]3 years ago
7 0

Answer: B. less than 6%.

Explanation:

Market interest rates have risen since the investor purchased the treasury bonds which means that the treasury bonds will be less sought after now because they offer a lower return than can be found in the market even if risk adjusted.

The investor will therefore only be able to sell it for a lower price which means that they will receive a lower rate for it. As we cannot say for certain what this rate will be, it is best to say that it will be under 6%.

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The process by which management evaluates long-term investment decisions involving long-term operational assets is called?
GalinKa [24]

The process by which management evaluates long-term investment decisions involving long-term operational assets is called capital investment analysis.

Companies and governmental organisations use capital investment analysis as a budgeting technique to evaluate the prospective profitability of a long-term investment. Long-term investments, such as those in fixed assets like machinery, equipment, or real estate, are evaluated using capital investment analysis. Finding the choice that can provide the maximum return on investment is the aim of this approach. Businesses may employ a variety of approaches to conduct capital investment analysis, which entails computing the cost of financing, the risk-return of the project, and the expected value of projected future cash flows from the project.

Investments in capital are risky since they entail sizable upfront costs for assets meant to last for many years and that will take a long time to pay for themselves. A capital project must meet a number of fundamental criteria, one of which is an investment return that exceeds the hurdle rate, or needed rate of return, for the firm's shareholders.

Learn more about investment here brainly.com/question/17252319

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8 0
1 year ago
What is the purpose of the fibers in grease? A. It's the actual lubricating element in the grease. B. It prevents the lubricant
Fudgin [204]
What is the purpose of the fibers in grease?

The wrong answer is A. It's the actual lubricating element in the grease. Next B. It prevents the lubricant from evaporating. Then C. It traps the lubricant and holds it in suspension. 

Finally And the correct Answer is D. It thinks the grease.

It will help you :)
8 0
3 years ago
Read 2 more answers
Merchandise accounts and computations LO C2. Kleiner Merchandising Company Accumulated depreciation $700 Beginning inventory 11,
Assoli18 [71]

Answer:

(A) Kleiner Merchandising Company:

Goods available for sale = $24,500

Cost of goods sold = $17,900

Gross profit = $3,600

Net income = $1,550

(B) Krug Service Company:

Net income = $16,300

Explanation:

(A) Kleiner Merchandising Company:

Goods available for sale:

= Beginning inventory + Net purchases

= $11,000 + $13,500

= $24,500

Cost of goods sold:

= Goods available for sale - Ending inventory

= $24,500 - $6,600

= $17,900

Gross profit = Net sales - Cost of goods sold

                    = $21,500 - $17,900

                    = $3,600

(b) Kleiner Merchandising Company:

Gross profit = $3,600

Net income = Gross profit - Expenses

                   = $3,600 - 2,050

                   = $1,550

Krug Service Company:

Net income = Revenues - Expenses

                   = $26,000 - $9,700

                   = $16,300

4 0
3 years ago
The prices of a certain security followa geometric Brownian motion with parameters μ = .12 and σ = .24. If the security’s price
Mazyrski [523]

Answer:

Probability = 45%

Explanation:

The stock is above 42 after 4 months. Well the distribution of the stock after 4 months (1/3 of a year) satisfies.

ln(S/40) = a normal distribution with mean μt - 0.5σ^{2t} and

std dev σsqrt(t) => a normal distribution with mean 0.03 and std dev 0.1385

ln(S/40) => ln( 42 / 40 ) => 0.049.

Convert to standard normal => (0.049-0.03)/0.1385 => 0.133

The answer is the area of the normal distribution above 0.133 which is about 45%

Hope this helps!

7 0
3 years ago
As a graphic artist, Randy has just finished a new calendar. The calendar cost him $1.00 for the glossy paper, $3.00 for the six
Yanka [14]

Answer:

Break-even units = 66.67 units

Explanation:

<em>Break-even point is the level of activity that achieves no profit or loss. At this level profit is zero because the the total revenue is equal to total cost.</em>

<em>The break-even point is calculated as </em>

<em>Units to achieve target profit = (Total general fixed cost for the period + target profit)/ contribution per unit</em>

Contribution per unit = Selling Price - Variable cost

Contribution per unit = 15- (1+3+0.50) = 10.5

Fixed cost = 500 +( 50× 4) = 700

So the units requited to achieve break-even point:

Break-even point =  700/10.5

                            = 66.67 units

4 0
4 years ago
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