Answer:
The rate of return on the investment if the price fall by 7% next year is -22% which is shown below.
The price of Telecom would have to fall by $71.43($250-$178.57), before a margin call could be placed.
Lastly,if the price fall immediately,the margin price would $178.57 as shown below
Explanation:
Total shares bought=$40000/$250=160 shares
Interest on amount borrowed=8%*$20000=$1600
When the price falls by 7% the new price =$250(1-0.07)=$232.50
Hence rate of return=(New price*number of shares-Interest-total investment)/initial investor's funds
=($232.50*160-$40000-$1600)/$20000=-22%
Initial margin=investor's money/total investment=$20000/$40000=50%
maintenance margin=30%
Margin call price=Current price x (1- initial margin)/ (1- maintenance margin)
=$250*(1-0.5)/(1-0.3)
=$178.57
Answer:
Either the price level or real GDP must increase
Explanation:
Gross Domestic Product (GDP) is used to measure the economic growth, purchasing power, and overall economic health of a country. nominal Gross Domestic Product, measures the value of all final goods and services produced within a country’s borders at current market prices. It takes change in prices and interest rates, inflation and money supply into account when calculating a country’s gross domestic product. Real GDP takes nominal GDP and adjusts for inflation or deflation by comparing and converting prices to a base year’s prices. For nominal GDP to rise there must be increase on either the price level or real GDP.
Answer:
The correct answer is:
$17 trillion.
Explanation:
The Gross Domestic Product or GDP represents the overall market value of all the goods and services a country produces and it measures the size of the economy. The GDP is determined with the following formula:
GDP = C + G + I + NX
where:
- C: private consumption or consumer spending
- G: government spending
- I: businesses' capital spending
- NX: net exports (exports - imports)
In the example:
GDP = $3 trillion + $10 trillion + $4 trillion = $17 trillion
<h2>Answer</h2>
B. adds up all the income collected by all the sellers.
<h3>Explanation</h3>
Calculating GDP via the income approach of the established approaches, the income generated by all factors of production is the most accurate answer for the Gross Domestic Product (GDP) of a country. This therefore establishes that the income generated by factors in the household in exchange of the services or products they have provided to consumers, represent the value of the total goods and services sold in the economy.
Answer:
Present value of investment X = $41,225.37
Present value of investment Y = $37,233.50
Explanation:
The present value of the cash flows can be found by discounting the cash flows at the discount rate.
This can be found using a financial calculator
Cash flow each year from year 1 to 9 for investment X = $5,800
Discount rate = 5%
Present value = $41,225.37
Cash flow each year from year one to year 5 for investment Y = $8,600
Discount rate = 5%
Present value = $37,233.50
I hope my answer helps you
