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marysya [2.9K]
3 years ago
6

You are the beneficiary of a life insurance policy. the insurance company offers two options for receiving the proceeds: a lump

sum of $50,000 today or payments of $550 a month for ten years. if you can earn 6 percent, compounded monthly, which option should you take and why?
Business
1 answer:
r-ruslan [8.4K]3 years ago
8 0
Take the $550 per month for monthly income as after ten years it would reach the same amount just in a longer period of time
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horrorfan [7]

Answer:

The expected excess return will be 11.4%

Explanation:

The S&P 500's excess return is the market return (rM). Using the CAPM model or the SML approach, we can calculate the required/expected rate of return on the stock we are investing in.

The expected rate of return is,

r = rRF + β * (rM - rRF)

Thus, return on the invested stock will be:

r = 0.03 + 1.2 * (0.1 - 0.03)

r = 0.114 or 11.4%

7 0
3 years ago
1. If the price of the share grows as the company grows, how does buying 25 points
Simora [160]

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Explanation:

Capital gains are a way to earn a return from owning stock in a company. They involve buying stock at a certain price and then selling the stock when the price increases. The difference between the selling and the buying prices is your capital gain.

This is the benefit to the investor here. If they buy a stock that grows with the company. They will be able to sell at a higher price eventually such that they will make a capital gain.

6 0
3 years ago
_____________ are sunk costs because the company will have to pay the cost no matter production or other variables in operations
Lina20 [59]

Answer:

E. Fixed Costs

Explanation:

Here are the options to this question :

A. Variable Costs

B. Labor Costs

C. Total Costs

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E. Fixed Costs

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Most companies pay rent per year. if due to unforeseen contingencies, sales and profit of the company declines and the company decides to shut down production, the company has already paid for rent, this amount cannot be recovered even though the company would not be using the space for sometime. So, rent is an example of sunk cost

6 0
3 years ago
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kifflom [539]

Answer:

Answer is D

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d. Construct a 95% confidence interval estimate of the population proportion of the users of this allergy drug who experience drowsiness.

5 0
2 years ago
The owners of hotels whose services are produced and consumed at the same time know that consumers do not have the opportunity t
mixer [17]

Answer:

<em>E) Satisfaction Guarantees</em>

Explanation:

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This term is widely used in advertisements or commercials advertising a product or service and has been used for a long time as a marketing strategy.

8 0
3 years ago
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