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Nikolay [14]
3 years ago
10

You note the following yield curve in The Wall Street Journal. According to the unbiased expectations theory, what is the one-ye

ar forward rate for the period beginning two years from today, 3f1? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Maturity Yield One day 1.58 % One year 2.10 Two years 2.34 Three years 2.45
Business
1 answer:
svetoff [14.1K]3 years ago
8 0

Answer:

2.58%

Explanation:

Mathematically, the relationship between the different interest rates using the equation is shown below:

(1+S2)^2=(1+S1)^1*(1+2y1y)

The spot rate in year 2 is the same as the spot rate in year 1 multiplied by the 1-year forward rate beginning in year 2.

S2=2-year rate =2.34%

S1=1-year rate =2.10%

2y1y=one-year interest rate 2 years from now=the unknown

(1+2.34%)^2=(1+2.10%)^1*(1+2y1y)

(1+2y1y)=(1+2.34%)^2/(1+2.10%)^1

2y1y)=(((1+2.34%)^2/(1+2.10%)^1)-1

2y1y=1.025805642-1

2y1y= 2.58%

The formula shows that borrowing or lending for 2 years at 2.34% is the same as borrowing or lending at 2.10% in year and 2.58% forward rate in year 2

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For each of the following types of indirect expenses and service department expenses, identify one allocation basis that could b
hodyreva [135]

Answer: (A) Computer service expenses of production scheduling for operating departments

Explanation:

 The computer services expenses of the production scheduling is one of the type of indirect expenses and also the type of service department expenses type in the operating department.

 The indirect expenses is one of the type of expenses that cannot be directly contribute with the cost object or services in the business department expenses.

 According to the given question, the computer service expenses is one of the allocation basis that is used as the indirect expenses in an organization or firm and the indirect expenses are categorized into two main parts that is:

 1) Fixed

 2) Recurring

Therefore Option (A) is correct answer.          

5 0
3 years ago
Leonardo, who is married but files separately, earns $90,000 of taxable income. He also has $8,750 in city of Tulsa bonds. His w
UkoKoshka [18]

Answer: 17.56%

Explanation:

Given that,

Leonardo taxable income = $90,000

Tulsa bonds = $8,750

Theresa taxable income = $50,000

Computation of Leonardo's Tax:

According to the tax rate schedule,

Total Tax = Tax + 24% of taxable income over $82,500

                = $14,089.50 + 24% × $7,500

                = $14,089.50 + $1,800

                = $15,889.5

Computation of Theresa's Tax:

According to the tax rate schedule,

Total Tax = Tax + 22% of taxable income over $38,700

                = $4453.50 + 22% × $11,300

                = $4453.50 + $2,486

                = $6939.5

Total tax on Leonardo's income and Theresa's income:

= $15,889.5 + $6939.5

= $22,829

Effective tax rate = \frac{Total\ Tax}{Total\ Taxable\ Income}\times100

                              = \frac{22,829}{130,000}\times100

                              = 17.56%

5 0
3 years ago
What are five foundations of economics? increasing trade between two countries makes everyone in those countries better off.
geniusboy [140]

The five foundations of trade are:

  • incentives
  • tradeoffs
  • opportunity cost
  • marginal thinking,
  • principle that trade creates value.

<h3>Why do we engage in trade?</h3>

There are five main foundations of trade that are the reason why people engage in trade. One of them is the profit incentive to make money from trade. Another is the tradeoffs that people are forced to make to survive.

Opportunity cost also leads to trade because people give up one thing for another and so may have to sell the thing they gave up to receive the thing they want. There is also the principle which posits that when we trade, value is created. Finally, there is marginal thinking which is thinking along the lines of the benefit of one additional unit.

Find out more on the foundations of trade at brainly.com/question/2710473

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5 0
1 year ago
Suppose that when disposable income decreases by $2,000, consumption spending increases by $1500. Given this information, we kno
sdas [7]

Answer:

the marginal propensity to consume is 0.75

Explanation:

The computation of the marginal propensity to consume is shown below:

MPC = Change in consumption ÷Change in disposable income

where,

The Change  in consumption is 1500

ANd, the Change in disposable income is 2000

So,

MPC is

= $1,500 ÷ $2,000

= 0.75

hence, the marginal propensity to consume is 0.75

4 0
3 years ago
________ means the supply curve has shifted to the right, while ________ refers to a movement along a given supply curve in resp
Flauer [41]

<u>An increase in supply</u><u> means the supply curve has shifted to the right, while </u><u>an increase in quantity supplied </u><u>refers to a movement along a given supply curve in response to an increase in price.</u>

What would shift a supply curve down and to the right?

  • In contrast, a drop in input costs will cause the supply curve to move to the right. Technology.
  • An increase in technology will shift the supply curve to the right. Conversely, a decrease in technology will shift the supply curve to the left.

What does it mean when the supply curve shifts to the right?

  • When demand is constant and supply is increasing, the supply curve moves to the right, creating an intersection where quantity and prices are lower.
  • On the other hand, a negative change in supply causes the curve to move to the left, raising prices and lowering quantity.

Which would cause a shift in the supply curve ?

  • When a change is brought about by a source other than price, the supply curve shifts.

Learn more about supply curve

brainly.com/question/14925184

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5 0
2 years ago
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