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saw5 [17]
3 years ago
13

The inflation rate in Great Britain is expected to be 4% per year, and the inflation rate in Switzerland France is expected to b

e 6% per year. If the current spot rate is £1 = SF 12.50, what is the expected spot rate in two years? A) SF12.99 B) SF 10.25 C) SF 11.44 D) SF 8.50 E) None of the above
Business
1 answer:
VladimirAG [237]3 years ago
5 0

Answer:

The spot rate in two years time = SF 12.99

Explanation:

The purchasing power parity states that the relationship between the current and future spot rate between two currencies can be linked to the differences in the expected inflation rate between the currency.

This relationship can be expressed as follows:

S1=  So× (1 + hc)/(1 + hb)

So= Current spot rate, Hc- inflation rate in Switzerland, Inflation rate in Britain

Spot rate in a year's time

S1= 12.50, Hc=6%, Hc=4%

S1= 12.50× (1.06/1.04)

S1=12.74

Spot rate in two year's time

S1= 12.74× (1.06/1.04)

S1= 12.99

The spot rate in two years time = SF 12.99

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The following information pertains to the West Division of Burger Company:
GenaCL600 [577]

Answer:

D) $4,550

Explanation:

Contribution margin = Net Sales - Total Variable cost

Net sales                             $6,000

Les: Variable costs:

Cost of merchandise sold  $1,000

Operating expenses          <u> $450  </u>

Contribution Margin            $4,550

All other costs are fixed cost which are not used in contribution margin calculation.

So the correct answer is D) $4,550.

3 0
3 years ago
When you are applying for a job, it’s fine to post this kind of personal information on websites? A) Your personal security numb
Katen [24]

Answer:

C

Explanation:

you don't want to do A or b so with that it can't be D

6 0
3 years ago
Which of the following is true?a. It is possible for total utility to rise as marginal utility falls. b. Marginal utility is the
Serga [27]

Answer:

The correct answer is letter "D": A and C.

Explanation:

Utility is the satisfaction or joy an individual perceives by consuming a given good or service. Marginal utility is the satisfaction perceived by consuming one more unit of a good or receiving a service one more time. Total utility is the aggregate utility as a result of adding the number of goods or services consumed.

<em>When marginal utility starts falling, total utility could still be rising since even if the consumer is not enjoying the same way the consumption of a good the individual is still adding more units to the consumption. However, there will a point in which the consumption of the good will not represent any satisfaction to the individual not adding more units anymore, thus, total utility starts dropping.</em>

6 0
3 years ago
A government bond issued in France has a coupon rate of 5% (paid annually) and a face value of 100 euros, and it matures in 5 ye
Nina [5.8K]

Answer:

Bond Price​= 106.77

Explanation:

Giving the following information:

Face value= 100

Coupon= 100*0.05= 5

Yield To Maturity= 0.035

Years to maturity= 5 years

<u>To calculate the price of the bond, we need to use the following formula:</u>

Bond Price​= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

Bond Price​= 5*{[1 - (1.035^-5)] / 0.035} + [100/(1.035^5)]

Bond Price​= 22.57 + 84.2

Bond Price​= 106.77

8 0
3 years ago
If you are going to receive $70,000 for 20 years starting 5 years from now, what is the present value of the cash flows discount
schepotkina [342]

Answer:

336,405.28

Explanation:

Present value can be found by discounting the cash flows at the discount rate.

Present value can be found using a financial calculator:

Cash flow from year 1 to 4 = 0

Cash flow from year 5 -25 = $70,000

Discount rate = 12%

Present value = $336,405.28

I hope my answer helps you

4 0
3 years ago
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