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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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Chavez Corporation reported the following data for the month of July: Inventories: Beginning Ending Raw materials $46,000 $39,50
Archy [21]

Answer:

Cost of goods manufactured= $228,700

Explanation:

<u>To calculate the cost of goods manufactured, we need to use the following formula:</u>

cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured= 25,500 + (46,000 + 75,500 - 39,500) + 100,500 + (68,500 - 11,800) - 36,000

cost of goods manufactured= $228,700

We deduct the indirect material from overhead because it is already incorporated into direct materials.

6 0
3 years ago
Managers in international businesses will need to evaluate the attractiveness of a country as a market or location for a facilit
ludmilkaskok [199]

Answer: Please refer to Explanation

Explanation:

When Evaluating a country's attractiveness for investment, there are several factors that should be evaluated. Key amongst them are, Benefits, Costs and Risks.

Under Benefits, the economy is evaluated based on the benefits it brings to the table. It's strengths and Opportunities. The goal is to see if these benefits present the company with adequate enough incentives to want to invest.

Under Costs, the cost of setting up and thriving is evaluated. What does the company have to pay and who do they have to pay it to in order to set up properly.

Under Threats, the factors that could adversely affect the company as a result of Investing in the country are evaluated. This is very important to know so that if need be, contingencies can be established.

Classifying the above.

1. Middle-class population growth potential. EVALUATE BENEFITS.

The middle class are the main purchasers of goods and services in the economy. In evaluating benefits the potential growth rate of the middle class should be evaluated.

2. First-mover advantages. EVALUATE BENEFITS.

Evaluating the potential benefits to be had from investing first in a country is part of Benefits Evaluation.

3. Bribe payments. EVALUATE COSTS.

Bribery payments are a cost when it comes to setting up in corrupt nations. They need to be evaluated as costs.

4. Unexpected political change. EVALUATE RISKS.

Under the evaluation of risks, this should be evaluated because a new Political leadership could have a different attitude to the company and this is a threat.

5. Infrastructure issues. EVALUATE COSTS.

Under the evaluation of cost there must be an evaluation of infrastructural issues in the country. If there are infrastructural challenges, the cost of setting up will be higher because depending on the infrastructure you'd have to bring in infrastructure from other areas and that would be expensive.

6. Resolving contract disputes. EVALUATE COSTS.

What are the costs of resolving contract disputes in the country. If they are favourable then the country is fine.

7. Free market economy. EVALUATE BENEFITS.

A free Market Economy is very useful to Entreprise. The type of economy needs to be evaluated therefore to see if it is a Free Market Economy that can benefit the company.

8. Economic uncertainty. EVALUATE RISKS.

How stable is the economy of the country in question. A country with an unstable Economy is one with a lot of Uncertainty and any company going in there will have to risk suffering losses if the Economy goes through peril.

7 0
3 years ago
you sell 300 laptops per week at $690 per laptop. You sell 432 tablets per week at $590 per tablet. Which generates more dollars
vitfil [10]
300 X $690 = $207,000

432 X $590 = $254,880

Hope this helps!
STSN
4 0
3 years ago
Read 2 more answers
To decide how much an insurance policy should cost a customer, underwriters use ________, such as historical industry trends and
alekssr [168]

When deciding the cost of an insurance policy being applied to the customer, then the underwriting experts used the concept of data analytics.

Option C is the correct answer.

<h3>What is underwriting?</h3>

Underwriting is the act where the underwriters confirm the loan approval after analyzing the debt, income, and assets of the borrower.

The concept of data analytics is one of the processes applied to analyze the data along with collection and modeling. it helps the underwriters to figure out the conclusions based on the trends and patterns of the data.

Therefore, data analytics is the tool that underwriters used to compute the cost of insurance policy for the customer.

Learn more about the underwriting in the related link:

brainly.com/question/24988092

#SPJ1

6 0
2 years ago
Suppose that the Dallas School District wants to achieve Six Sigma quality levels of performance in delivering students to schoo
Kay [80]

Answer:

a) 1.66 minutes

b) 3.4 out of million deliveries

Explanation:

So, it is a six sigma quality question, we first need to understand little bit about six sigma and how it is to achieve six sigma level.

<u>Six Sigma:</u>

It is the process or technique used by many organizations through out the world to achieve maximum quality in a product or in a service they are providing. It helps to indicate root causes of the process or you can say waste steps which first need to be identified then rectified to bring that top-notch quality in the system. So in this case, in order to calculate part a) we will calculate six sigma control limits.

a) So, for six sigma control limits, the maximum allowable standard deviation is 12 or you can say +6 + (-6) = ±6 = 12. It means all deviations must lie in all 12 standard deviations.

<em>Please refer to the table shown in the attachment.</em> This bell curve represent six sigma concept. In this <em>3 sigma quality level means all deviations must lie in 6 standard deviations.</em>

So, here we have been given that mean = 20, so with mean we can calculate standard deviation in six sigma control limits.

Maximum Allowable Standard Deviation for 6 sigma = Mean/12

                                                                                        = 20/12

                                                                                       = 1.66

So, 1.66 is the maximum allowable standard deviation of arrival times required in order to achieve 6 sigma quality level.

b) In this part, we are asked that, out of million deliveries about how many times bus deliver students too early or too late at this 6 sigma quality level.

<em>For this answer, please refer to attachment again</em>. and notice at the left bottom with the arrow of 6 sigma, we have a number 3.4 ppm means 3.4 part per million.

<em>So, it 3.4 times in a million deliveries bus will deliver students either too early or too late. </em>

8 0
3 years ago
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