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ddd [48]
2 years ago
15

The ________ of the term structure states the following: the interest rate on a long-term bond will equal an average of short-te

rm interest rates expected to occur over the life of the long-term bond plus a term premium that responds to supply and demand conditions for that bond.
Business
1 answer:
rjkz [21]2 years ago
7 0

Answer:

liquidity premium theory

Explanation:

The liquidity premium theory states that those that invest in bonds do prefer high liquid as well as securities that are short-dated so that it can be sold fast compare to long-dated ones. It states that investors do get compensation for higher default risk when there is change in interest rate.

It should be noted that The liquidity premium theory of the term structure states the following: the interest rate on a long-term bond will equal an average of short-term interest rates expected to occur over the life of the long-term bond plus a term premium that responds to supply and demand conditions for that bond.

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Suppose that both of the events you have just analyzed are partly responsible for the increase in the price of hamburgers. Based
MatroZZZ [7]

It is likely that the increase in the price of hamburgers is related to the fact that demand is greater than supply.

<h3 /><h3>What is the law of supply and demand?</h3>

It is an economic approach to understanding the economic factors that influence the quantity of a product supplied in a market and its price.

Therefore, when there is more demand than supply for a good available in the economy, it means a situation of scarcity, which makes prices rise.

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4 0
2 years ago
Suppose that the price of labor (PL) is $10 and the price of capital (PK) is $20. What is the equation of the isocost line corre
gayaneshka [121]

Answer:

$100 = $10PL + $20PK

Explanation:

Computation for the equation of the isocost line

Using this formula to compute the equation of the isocost line

Total cost=Price of labor (PL)+Price of capital (PK)

Where,

Total cost=$100

Price of labor (PL)=$10

Price of capital (PK)=$20

Now Let plug in the formula to compute the equation of the isocost line

$100 = $10PL + $20PK

Therefore the equation of the isocost line corresponding to a total cost of $100 will be $100 = $10PL + $20PK

8 0
3 years ago
This company became the richest company on earth. british east india company dutch east india company french east india company
Tasya [4]
<span>The company that became the richest company on earth. dutch east india company </span>cuz while all the other european countries were focused on making colonies the Dutch worked on their trade system
6 0
3 years ago
Read 2 more answers
Select all that apply Which of the statements below summarize why a seller would give a sales allowance? (Check all that apply.)
Varvara68 [4.7K]

Answer:

I. In order to entice a customer to keep damaged or defective merchandise, the seller is willing to decrease the selling price.

II. The seller wants to avoid future lost sales.

III. The seller wants to keep a customer happy.

IV. Sold merchandise was defective or unacceptable.

Explanation:

Sales allowance can be defined as a reduction in the price of goods that a seller gives to a customer due to quality issues, incorrect pricing, shipping, etc.

The statements which best summarize why a seller would give a sales allowance are;

I. In order to entice a customer to keep damaged or defective merchandise, the seller is willing to decrease the selling price.

II. The seller wants to avoid future lost sales.

III. The seller wants to keep a customer happy.

IV. Sold merchandise was defective or unacceptable.

5 0
3 years ago
A. how much would the firm’s revenue change if it lowered price from $12 to $10? is demand elastic or inelastic in this range?
Alekssandra [29.7K]
Its InElastic Because It Lowered Hope It Helped :)
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3 years ago
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