Providing the customer a choice between a refund or a replacement
Answer:
£15 - £3 = £12 (contribution per unit)
£25,000/ £12 = 2,083.33 (round up to 2,084 as the business doesn’t technically break even at 2,083)
Explanation:
Hope you have a great day! c:
As the dollar becomes stronger relative to a foreign currency for a given face value of bond holdings it will yield more home currency to the foreigners so that the assets will be worth more to the foreign investors
Explanation:
The value of the debt increases as the dollar value fluctuates because the debt that is held by the foreigners by changing the value of the money debtors will be repaid by the government
The bonds that are paid off in dollars will be of the lesser value and hence there will be a decrease in the value of the dollars and in the value of what they owe
Answer:
(a) $18,000
(b) $3,600
Explanation:
(a) Profit would be:
= (No. of shares × Undervalued) - (No. of shares × Overvalued)
= (1,800 × $16) - (1,800 × $6)
= $28,800 - $10,800
= $18,000
(b) Only half your order will be filled.
With rationing (and being an uninformed investor) we expect our profits:
= (No. of shares × Undervalued) - (No. of shares × Overvalued)
= (900 × $16) - (1,800 × $6)
= $14,400 - $10,800
= $3,600
The first point is (-1, 6)
The second point is (0, -6)