If people refused to use banks to create checkable deposits, the banking system would not be able to create new money.
Checkable deposits include all accounts on which checks can be drawn. These deposits allow the owner of bank account to write checks to third parties. Also, they are very liquid assets that allow depositors to have an easy access to their funds.
For these reason, checkable deposits generally are important but also one of the lowest-cost source of bank funds, covering a large share of bank liabilities. Thus, banks create money by lending excess reserves to consumers and businesses.
Hence, if people refused to use banks to create checkable deposits, the money multiplier decreases.
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Answer:
The amount of investment income is $52,000
Explanation:
Assets of $690,000
Liabilities of $230,000
Spoon's assets were equal except for land, which had a fair value $108,000 more than book value, and equipment, which had a fair value $80,000 more than book value.
Net income of $68,000
Paid dividends of $34,000
Proportionate share of reported income
Share in income from investment = 68000 × 100% = $68,000
Depreciation on equipment = (80,000 ÷ 5) = ($16,000)
Amount of investment income = $68,000 - $16,000
= $52,000
Answer:
The annual YTM will be = 0.07518796992 or 7.518796992% rounded off to 7.52%
Explanation:
The yield to maturity or YTM is the yield or return that an investor can earn on the bond if the bond is purchased today and is held till the bond matures. The formula to calculate the Yield to maturity of a bond is as follows,
YTM = [ ( C + (F - P / n)) / (F + P / 2) ]
Where,
C is the coupon payment
F is the Face value of the bond
P is the current value of the bond
n is the number of years to maturity
Lets assume the par value is 1000.
Current value = 1000 * 109% = 1090
Coupon payment = 1000 * 0.085 * 6/12 = 42.5
Number of periods remaining till maturity = 14 * 2 = 28
semi annual YTM = [ (42.5 + (1000 - 1090 / 28)) / (1000 + 1090 / 2)
semi annual YTM = 0.03759398496 or 3.759398496% rounded off to 3.76%
The annual YTM will be = 0.03759398496 * 2 = 0.07518796992 or 7.518796992% rounded off to 7.52%
Answer:
"$52,000" is the correct answer.
Explanation:
Given:
This year income,
= $40,000
Next year income,
= $60,000
Market interest rate,
= 10%
or,
= 0.1
Now,
The next year consumption will be:
= ![[40,000 - 30,000 - 50,000]\times 1.1 + (60,000 + 36,000)](https://tex.z-dn.net/?f=%5B40%2C000%20-%2030%2C000%20-%2050%2C000%5D%5Ctimes%201.1%20%2B%20%2860%2C000%20%2B%2036%2C000%29)
= 
= 
= 
($)
Answer:
focus on what its asking
Explanation:
and make it fun to read don't make it boring
