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mixer [17]
3 years ago
12

Classify each of the following in terms of their effect on interest rates (increase or decrease):_____

Business
1 answer:
SCORPION-xisa [38]3 years ago
3 0

Answer:

(I) Covenants on borrowing become more restrictive

This will decrease the demand for money as companies will have to bear more covenants which will restrict their business plans and because of this the demand curve of money will shift to the left which will decrease the interest rates

(II) The Federal Reserve increases the money supply

Increases in the money supply will shift the supply curve of money to the left which will in turn decrease the interest rates.

(III) Total household wealth increases

This will also shift the supply curve to the left as people will have more idol money that they would want to lend and earn an interest on, so this will also decrease the interest rates.

Explanation:

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The risk-free rate is 4.5 percent and the market expected return is 10.8 percent. What is the expected return of a stock that ha
GarryVolchara [31]

For this question you can use the CAPM formula:

E(rs) = risk free + (market return - risk free rate)*(beta)

=4.5% + (10.8% - 4.5%) * 1.3

= 4.5% + 8.19%

= 12.69%

----------------

6 0
3 years ago
Assume initially that market interest rates are 7% and the bondholder is receiving a $70 coupon payment per year on a bond with
Dominik [7]

Answer:

$875

Explanation:

Generally, the relationship can be expressed as interest rate = Coupon Payment / Face Value.

Initially a 7% market rate a investor gets 7% which gives a coupon payment of  $70 because the face value of 1000.

Hence 70/1000 = 7%

Subsequently with the interest rate change, we can look for the bond price.

Substitute 8% for the interest rate and find the revised bond value which will fall as rate increases

$70/bond price = 8%

Then $70/ bond price = 0.08

0.08 x bond price = $70

bond price = $70 / 0.08 = $875

6 0
4 years ago
Ellen and george work for the same company. ellen, a gen xer, really appreciates the flextime opportunities, while george, a bab
nataly862011 [7]

These policies are examples of <u><em>"work-life balance".</em></u>

Employees always want to balance work with rest of the activities they wish to seek after throughout everyday life. Work balance is particularly essential to your millennial representatives who are accustomed to packing their days with differing exercises and hours of electronic correspondence.  

Work-life balance is an idea that portrays the ideal of splitting one's time and energy among work and other critical parts of their life. Accomplishing work-life balance is a day by day challenge. It can be difficult to set aside a few minutes for family, companions, network cooperation, self-improvement, self-care, and other individual exercises, notwithstanding the requests of the working environment.  

4 0
3 years ago
In a small, closed economy national income (GDP) is $750.00 million for the current month. Individuals have spent $300.00 millio
Gwar [14]

Answer:

Investment is $50 million as shown below.

The national savings is -$150m as government spent more than it received in taxes.

The national savings and the investment moving in different directions shows that the economy is running a deficit budget

Explanation:

The formula for computing GDP is given as:

GDP = C + I + G + (Ex - Im)

Where C=Consumption

I=investment

G=Government expenditure

Ex=Export

Im=Import

In this case,neither export nor import is applicable

The formula becomes:

GDP=G+I+C

Rewritten I=GDP-C-G

I=750-300-400

I=$50m

National savings is the difference between what government in taxes and government exenditure.

National savings =T-G

National savings=250-400

National savings=-150m

3 0
3 years ago
A marketing manager for a small laptop manufacturer is analyzing the potential effects of political, legal, sociocultural, and e
ss7ja [257]

Answer:

marketing environment

Explanation:

Marketing environment -

It refers to all the external as well as the internal factors , which is present in the surrounding of the business and alters or influences the marketing process of the goods and services , is referred to as the marketing environment .

  • The internal factors are - distributors , retials , shareholders , employees , consumers etc.

And ,

  • The external factors are economic , technological , social , legal and political aspects .

Hence , from the given information of the question,

The correct term is marketing environment .

3 0
3 years ago
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