All categories

3 years ago

When comparing a Variable Rate Demand Obligation (VRDO) to an Auction Rate Security (ARS), which statement is FALSE?

Business

1 answer:

lozanna [386]3 years ago

5 0

Answer:

Both have tender options.

Explanation:

Variable rate demand obligation and Auction rate securities both are long term bonds which have interest rate that reset weekly or monthly. This advantages the issuer with lower short term rates despite of long term security. Both of these securities are subject to credit risk of the issuer and they are marketed by broker dealers.

You might be interested in

Assume an economy is currently engaged in free trade but considering implementing a tariff on its main import, athletic shoes. W

UNO [17]

Answer:

Price - increase

Domestic production- increase

Import- reduces

Producer surplus- increase

Explanation:

A tariff is a form of tax on import or export.

When a tariff is imposed on a good , the price of the good increases.

As a result of the tariff , the amount of the goods imported falls as the imported good is now more expensive. The quantity produced by domestic producers increases as consumers would now start demanding for the domestic good. Tariffs are sometimes enacted to discourage importation and encourage domestic production.

As a result of the price increase, producer surplus increases. The increase in price also increases output. The producer surplus is the difference between the price of a product and the least amount the producer is willing to sell his product.

I hope my answer helps you.

7 0

3 years ago

A credit card had an Apr of 12.87% all of last year and compounded interest daily. What was the credit card's effective interest

alisha [4.7K]

Answer:

13.73%

Explanation:

Effective annual rate = (1 + APR / m ) ^m - 1

M = number of compounding = 365

$(1 + \frac{0.1287}{365} )^{365} - 1$

$(1.000353)^{365} - 1$ = 0.1373 = 13.73%

7 0

3 years ago

Which of the following is an example of a variable cost?

kifflom [539]

Answer:

Utilities

Explanation:

Variable costs are expenses that vary proportionately with the changes in production level. Should production level rise, variable costs increases. Variable costs form the majority of the direct cost of production.

Unlike fixed costs, the monthly bill for variable costs will keep fluctuating. In this scenario, utilities represent the variable cost. Expenses on electricity, water and other consumables will vary from time to time. With a high level of production, consumption of power and water will be high.

Rent and insurance cost will remain the same regardless of production level. A professional fee is an overhead expense. It is not an input in the production process.

8 0

3 years ago

Read 2 more answers

The following are the typical classifications used in a balance sheet:

goldfiish [28.3K]

Answer:

a. Current assets

Allowance for uncollectable accounts

Inventories

Prepaid rent for next 9 months

Cash

b. Investments and funds

Investment in xyz corporation

c. Property, plant, and equipment

Equipment

Land in use

Building in use

d. Intangible assets

Patents

e. Other assets

Land held for investment

f. Current liabilities

Accounts payable

Deferred rent revenue for the next 12 months

Notes payable due in 6 months

Accrued liabilities

Taxes payable

g. Long-term liabilities

Notes payable due in 5 years

h. Paid-in-capital

Common stock

i. Retained earnings

Income less dividend accumulated

Explanation:

A Balance Sheet shows the balances of Assets, Liabilities and Equity as at the reporting date.

Assets

There are two major asset categories which are Current Assets and Non- Current Assets. Current Assets are assets not exceeding 12 months examples are Inventories and Cash. Whilst Non-Current Assets are assets exceeding a period of 12 months examples are Property, Plant and Equipment items such as Land, Investments and Intangible Assets

Liabilities

There are two major asset categories which are Current Liabilities and Non- Current Liabilities. Current Liabilities are liabilities due to be paid within a period not exceeding 12 months examples are Accrued liabilities and Accounts payable. Whilst Non-Current Liabilities are assets liabilities payable in a period exceeding 12 months examples are Notes payable due in 5 years.

Equity

We have Paid In Capital such as Common Stock and Retained Earnings comprising of Profits and dividends.

Classification of items as will be shown in the balance sheet will be done as above.

3 0

3 years ago

Joe must pay liabilities of 1,000 due one year from now and another 2,000 due three years from now. There are two available inve

kari74 [83]

Answer:

1. 2,584

Explanation:

future payments: $1,000 in 1 year and $2,000 in 3 years

the present value of alternative I (one year bond):

$1,000 / 1.06 = $943.40

the present value of alternative II (first 2 years and then 1 year):

$2,000 / 1.065 = $1,877.93 ⇒ PV at year 2

PV at year 0 = $1,877.93 / 1.07² = $1,640.26

the total present value of both options = $943.40 + $1,640.26 = $2,583.66 ≈ $2,584

4 0

3 years ago