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iren [92.7K]
3 years ago
14

Which theory would most likely explain why a commercial bank, which usually focuses on short-term securities, would switch to lo

ng-term securities due to a change in interest rates. pure expectation liquidity premium segmented market preferred habitat
Business
1 answer:
den301095 [7]3 years ago
5 0

Answer:

preferred habitat

Explanation:

According to the preferred habitat theory, if the expected returns from investment of a particular investment maturity is large enough, investors would shift from their preferred maturities.

In this question, there is a shift from the preferred maturity (short-term securities) to a long-term securities when interest rate changes

The pure expectations theory assumes that bonds of any maturity are perfect substitutes for each other. For example, if an investor buys a 10 year bond and holds it for 1 year, the return is the same as buying a 1 year bond. The theory also assumes that risk premium does not exist and a security only earns its risk free rate

Liquidity premium theory states that risk premium increases with the maturity of a bond. The theory predicts that the yield curve is upward sloping due to liquidity premium

According to the segmented market theory, each bond maturity segment can be thought of as a segment market in which yield are a function of the demand and supply for funds in that maturity.

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A marketing company wants to estimate the proportion of consumers in a certain region of the country who would react favorably t
Sindrei [870]

The closest to the minimum number of consumers needed to obtain the estimate with the desired precision is (b) 271

Explanation:

When the prior estimate of population proportion is not given , then the formula to find the sample size is given by :-

n=0.25(\frac{z^{*} }{E} )^{2}

where E = Margin of error.

z* = Critical z-value.

As per given , we have

E = 5%=0.05

Confidence level = 90%

The critical value of z at 90% is 1.645  (By z-table)

Put all values in the formula , we get

n=0.25(1.645/0.05)²

n=0.25(32.9)²

n=270.6025≈271

Thus, the minimum sample size needed = 271

Hence , the correct answer is 271 .

8 0
3 years ago
As utility companies tend to serve a whole market exclusively, they are known as ______ because the governments involved believe
kykrilka [37]

Natural monopoly  tends to serve a whole market exclusively.

<h2>What is Natural Monopoly?</h2>

A natural monopoly is a sort of monopoly that frequently arises as a result of the high start-up costs or considerable economies of scale of operating a business in a particular industry, which can result in significant barriers to entry for potential competitors. In a certain sector or region, a corporation with a natural monopoly might be the exclusive supplier of a given good or service. In industries that need specialized technology, raw materials, or other elements to function, natural monopolies may develop.

<h3>Key Features of Natural Monopoly</h3>
  • A natural monopoly is a special kind of monopoly that develops when there is only one company that can effectively provide the service in a particular area due to high start-up costs and considerable economies of scale.
  • A business with a natural monopoly may be the exclusive supplier of a good or service in a given sector or region.
  • Natural monopolies are permitted when one firm can provide a good or service for less money than any potential rival, but they are frequently very tightly controlled to safeguard consumers.

Learn more about Natural monopoly here:

brainly.com/question/2182872

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7 0
1 year ago
The discount rate is the interest rate charged by:_______.
disa [49]

Answer:

B

Explanation:

I believe it is the interest rate the federal reserve uses for loaning to banks. Its the minimal rate, also.

5 0
3 years ago
True or False: Diminishing returns will occur when investing in the same TQM Initiative round after round. A. True B. False 2. T
kirill115 [55]

Answer:

  1. True
  2. True
  3. True
  4. True
  5. Capstone courier

Explanation:

7 0
3 years ago
Because costs and benefits are both subjective, a person's cost-benefit analysis will always be based on what?
Allisa [31]

Answer: his or her unique values and benefits

Explanation: I just got it right

4 0
2 years ago
Read 2 more answers
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