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abruzzese [7]
3 years ago
11

Which of the following is a common risk of using credit to make purchases

Business
1 answer:
DochEvi [55]3 years ago
6 0

Answer:

overspending

Explanation:

Credit purchases encourage one to spend more than they can afford. The fact that the sellers do not demand cash when goods change hands entices people to buy more. In credit purchases, cash is not required, only a commitment to pay later, which leads to overspending.

Overspending increases the probability of defaulting on credit payments. When the debt to income level rises too much, the borrower may be forced to miss some installment payments and cater to basic needs.

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Which of the following possible provisions of a bond indenture is designed to ease the burden of principal repayment by spreadin
Kazeer [188]

Answer:

d. sinking fund.

Explanation:

A bond refers to a debt or fixed investment security, in which a bondholder (creditor or investor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time.

Generally, the bond issuer is expected to return the principal at maturity with an agreed upon interest to the bondholder, which is payable at fixed intervals.

A sinking fund is a provision of a bond indenture which is designed to ease the burden of principal repayment by spreading it out over several years.

<em>Hence, a sinking fund is generally viewed or assumed to protect the bondholders such as creditors or investors because the fund set aside would serve as a collateral incase the bond issuer can't pay in the future. </em>

8 0
3 years ago
Consider the following balance sheet for TD. Assets Liabilities Reserves 493 Deposits 2900 Loans 2407 4. Suppose that TD is a ty
anzhelika [568]

Answer:

what is the money multiplier?

  • 5.88

what is the total change in the M1 Money Supply?

  • Just because a client deposits money into a bank it does not increase M1, it just changes its composition. The immediate effect of the deposit in the total money supply is nothing. If the bank loans the money to other clients ($581 in total loans are possible), and other clients deposit the funds in the same bank or other banks, then the money supply could increase up to $3,416.

what is the minimum amount by which the money supply will increase?

  • If the bank loans the disposable funds, the money supply should increase by $581 at least.

Explanation:

The bank's required reserve ratio = reserves / deposits = $493 / $2,900 = 0.17 or 17%.

the money multiplier = 1 / required reserve ratio = 1 / 0.17 = 5.88

if a client deposits $700, the minimum amount by which the money supply will increase = $700 x (1 - required reserve) = $700 x (1 - 0.17) = $700 x 0.83 = $581

the maximum amount by which the money supply could increase = ($700 x 5.88) - $700 = $4,116 - $700 = $3,416

6 0
3 years ago
In an e-business innovation cycle, after an organization scans the environment for new emerging and enabling technologies, the n
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Answer:

In an e-business innovation cycle, after an organization scans the environment for new emerging and enabling technologies, the next step is to match the most promising new technologies with current economic opportunities.

6 0
3 years ago
Read 2 more answers
Which organization requires a 90 day supply of oil (links to an external site.)links to an external site. (known as the strategi
lora16 [44]
<span>The organization that requires a 90-day supply of oil is the International Energy Agency (IEA). Each country in the organization must stock an amount of petroleum equivalent to this amount because of the organization's obligations.</span>
8 0
3 years ago
_______________ ensures that all relevant financial information is reported. (select an option)
Wewaii [24]

Answer:

B. Full disclosure principle

Explanation:

Full disclosure principle ensures that all relevant financial information is reported

7 0
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