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Nuetrik [128]
2 years ago
8

8. Problems and Applications Q8 Social Security benefits are increased each year in proportion to the increase in the CPI, even

though most economists believe that the CPI overstates actual inflation. True or False: If the elderly consume the same market basket as other people, then Social Security would provide an increase in their standard of living.
Business
1 answer:
qaws [65]2 years ago
5 0

Answer:

Social Security benefits are increased each year in proportion to the increase in the CPI, even though most economists believe that the CPI overstates actual inflation.

True

Explanation:

We realize that the elderly who receive Social Security do not consume the same market basket of goods and services as other people in the economy.  Assuming that the elderly do consume the same market basket as others, Social Security would provide the elderly with an improved standard of living each year since the Consumer Price Index (CPI), which represents a weighted average of a basket of goods and services, overstates inflation and Social Security payments are tied to the CPI.

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You are holding a stock that has a beta of 1.39 and is currently in equilibrium. The required return on the stock is 20.47%, and
r-ruslan [8.4K]

Answer: 26.73%

Explanation:

You can calculate the expected return using the Capital Asset Pricing Model (CAPM).

Formula is:

Expected return = Risk free rate + beta * (Market return - risk free rate)

Use the previous figures to solve for the risk free rate:

20.47% = Rf + 1.39 * (16.50% - Rf)

20.47% = Rf + 22.935% - 1.39R

20.47% - 22.935% = Rf - 1.39Rf

-2.465% = -0.39Rf

Rf = -2.465% / -0.39

= 6.32%

New expected return is:

= 6.32% + 1.39 * (21% - 6.32%)

= 26.73%

7 0
3 years ago
A finance lease agreement calls for quarterly lease payments of $4,625 over a 15-year lease term, with the first payment on July
love history [14]

Answer:

The Lease amortization schedule is attached in pdf format with this answer please find.

Explanation:

Lease payments, includes the payment of interest and principal as well. The interest is calculated for the period opening balance of lease and the residual amount of lease payment and interest is settled against the lease amount.

Download pdf
3 0
3 years ago
27. DORIS PURCHASED A NEW AUTOMOBILE ON CREDIT WHEN SHE WAS SIXTEEN YEARS OLD. TWO DAYS AFTER HER NINETEENTH BIRTHDAY SHE SOUGHT
likoan [24]

Answer: Sorry bruh, cant help u with them all.

Explanation:

I dont got the time. But i will answer one. 27. the answer is A I think.

4 0
3 years ago
What is savings?, How can you save in a bank? And why is it important?
Strike441 [17]

Explanation:

Savings are the money one has saved, especially through a bank or official scheme.

You can save in a bank by frequently depositing money into a bank account.

Savings are important for the availability of money during emergencies or to avoid going into debt to pay for your necessities.

3 0
3 years ago
On its first day of trading, Twitter closed at $41.57 per share. Two years later and the price was $26.85, what was the annual r
Mkey [24]

Answer:

B. -21.85%.

Explanation:

Calculation for the annual return on the stock

First step is to calculate the Number of periods

Number of periods = 2 * 365 days in a year

Number of periods= 730

Second Step is to calculate the Daily return using this formula

Daily return = (Future value / initial value)^1/n - 1

Let plug in the formula

Daily return = (26.85 / 41.57)^1/730 - 1

Daily return = (0.645898)^1/730 - 1

Daily return = 0.999401 - 1

Daily return = -0.00059861*100

Daily return = -0.059861%

Last step is to calculate annual return

Using this formula

Annual return=Daily return/ Numbers of days in a year

Annual return = -0.059861% * 365

Annual return = -21.85%

Therefore the annual return on the stock if returns are compounded daily will be 21.85%

8 0
3 years ago
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