Answer:
This is an example of price leadership.
Explanation:
Price leadership is a type of practice where a firm, most likely a dominant one, sets the price and other firms follow it. It is commonly seen in an oligopoly market.
In an oligopoly market, there are a few firms, these firms are interdependent. A price change by one firm affects its rivals.
Price leadership is of different types.
- Barometric
- Collusive
- Dominant
So when a dominant firm changes its price, the followers have to follow it if we they want to retain their market share.
Answer:
1.5%
Explanation:
Below is the given values:
The expected inflation rate in Switzerland = 2.2%
The expected inflation rate in the U.S. = 1.6%
The risk-free yielding = 3.7%
The real rate of return on Swiss security = Risk-free yielding - Expected inflation in Switzerland
The real rate of return on Swiss security = 3.7% - 2.2%
The real rate of return on Swiss security = 1.5%
Answer:
a. are willing to lend to riskier customers than commercial banks.
Explanation:
Financial companies are those companies which loan funds to individuals and businesses.
Unlike commercial banks who lend funds only to highly credit worthy customers, financial companies are liberal in their lending and are willing to finance riskier projects and extend credit to individuals with low credit rating.
As a consequence of assuming higher risk than banks, such companies also charge a higher rate of interest than banks.
Owing to above, finance companies enjoy higher rate of growth.
