Complete Question:
A. According to census data, the percentage of Southville's population that lives in rural areas has gradually been shrinking.
B. The standards for obtaining a mortgage loan in Southville have been more stringent compared to many other countries.
C. Prior to the crisis, the prices of existing homes also increased in proportion to the prices of new homes in Southville.
D. A large proportion of home buyers in Southville were individuals who already owned one or more houses.
E. The inflation-adjusted real wage in the construction industry increased by 10 percent prior to the crisis.
Answer and Explanation:
Options A and D would weaken Bob's argument. The reason why option A would weaken Bob's argument would be because Bob said that the population is increasing whereas the according to the census data, the population has gradually been shrinking.
The reason for option D is that the individuals who already owned houses were buying new houses. So what was the need for them to buy additional new houses?
Answer:
B. Portfolio B with E(R)=13% and STD=18%
Explanation:
The computation is shown below;
Reward to risk ratio = (15% - 5%) ÷ 20% = 0.5
The porfolio should be in line i.e.
= 0.05 + 0.5 × standard deviation
For portfolio A
= 0.05 + 0.5 × 25
= 17.5%
For portfolio C
= 0.05 + 0.5 × 1
= 5.5%
Portfolio B, the std is 18%
So,
= 0.05 + 0.5 × 18%
= 14%
More loans because with lower interest rates the people pulling out the loans will have to pay the bank less money for bigger loans.
Answer:
$120 per unit
Explanation:
The computation of minimum acceptable transfer price is shown below:-
If the division of the transferor does not have spare capacity, the minimum transfer price is equal to variable cost per unit and the contribution margin per unit
Minimum transfer price = Variable cost per unit + (Selling price to outside customers - Variable cost per unit)
= $72 + ($120 - $72)
= $72 + $48
= $120 per unit
Therefore for computing the minimum transfer price we simply applied the above formula.
