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N76 [4]
3 years ago
9

4. Analyze the overall financial situation from a cross-sectional viewpoint. Compare each company’s ratios with the industry ave

rage. What are the strengths and weaknesses of each company? Which company is best to invest in and why? (3 marks)

Business
1 answer:
Ksenya-84 [330]3 years ago
4 0
02928474728181938473
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goods (like foods or necessities)

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Your friend has just started a savings account that is currently paying 5% interest. If inflation is expected to be 7% this next
kumpel [21]

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If inflation is expected to be 7% this next year, your friend will be earning a -2% interest.

Step-by-step explanation:

Real interest rate is the interest rate that takes inflation into account. To calculate for the real interest rate, we have:

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<em>Real interest rate = -2%</em>

In this case, the borrower will get paid and your friend will be the one penalized.

Negative interest rates occur infrequently and usually only when a country's central bankers are forced to utilize the monetary policy tool -- where the interest rates are set below zero -- during harsh economic times.


4 0
3 years ago
Read 2 more answers
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