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3 years ago

The present value of an expected future payment ________ as the interest rate increases.

Business

1 answer:

LekaFEV [45]3 years ago

6 0

The present value of an expected future payment "falls" as the interest rate increases.

This is based on the idea that the bond is paid at a fixed interest rate. Thus as the interest rate increases, the value of the bond decreases or falls because investors would certainly stay away from such bonds, therefore, making its value reduce or fall.

Similarly, if the interest falls, a bond with a fixed interest rate becomes more attractive to investors.

Hence, in this case, it is concluded that the interest rates determine the value of the bond.

Learn more here: brainly.com/question/17175565

You might be interested in

An option trader buys 1 ABC April 25 put. A few months later, the trader exercises the option. The trader's net sales proceeds e

Lina20 [59]

Answer:

[C] Strike price minus the premium

Explanation:

A put buyer refers to the one who purchases a right (and not the obligation) to sell(put) the underlying asset at a pre determined strike price/exercise price at a future date.

A put buyer is under no obligation to exercise his right of selling the underlying asset. He will exercise his right only when his strike price is greater than the current market price upon expiry of the contract.

Put Buyer's profit is expressed as;

= Strike price - Option premium paid - Current market price upon expiry

Thus, his NET sales proceeds are equal to his Strike Price as reduced by Option premium paid.

6 0

3 years ago

Short-term price reductions that can be used to retaliate against a competitor's actions like introducing a new product are call

vlada-n [284]

Short-term price reductions that can be used to retaliate against a competitor's actions like introducing a new product are called deals.

Instead of considering an asset's long-term fundamentals, short-term trading mostly concentrates on price action. This trading strategy looks for market volatility around significant economic data releases, corporate earnings, and political events in an effort to profit from sudden changes in market prices.

A mutual agreement or communication between two or more parties that intend to conduct business is referred to as a business deal. The transaction is typically carried out between a seller and a buyer to exchange valuable assets including money, products, services, and information.

Learn more about Short-term price here brainly.com/question/16968866

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4 0

2 years ago

How can a firm increase the life of a product without involving product changes? a. reintroduction b. product extension c. new p

Vitek1552 [10]

When a firm is experiencing lesser profit it can come up with different strategy to improve its present product rather than developing new product because improving present product involves lesser cost therefore more profit. The answer is B. Product Extension and C. New product placement.

Reintroduction is one way, it is launching the product using more creative sales and marketing strategy. It can target a new market segment, provide more information about the product and use more appealing advertisements. The product’s packaging can also be changed to make it look more attractive and fresh.

Product extension can be use as it is targeting a new market. It can involve exporting the products. This strategy may be costly but when successful will level up your product’s quality as it passed exporting quality. It is changing the market NOT the product.

New product Placement is a strategy where in the products are advertised by placing it in media. The products are shown for example in movies, the character uses the products that way it can give awareness to the viewers how the products can be used and also the brand and name of the products are advertised without direct reference to the product. It doesn’t involve changing the product’s feature only the product placement is changed to a new one.

Rebranding can also be used. It is introducing your product with a new name, changing the product’s name not only its packaging but the total appearance. It gives the product a whole new image to target new image audience or expand its audience.

3 0

3 years ago

Doug Datner had an eclectic background. He completed his law degree from the University of Virginia, then went to work for a tec

const2013 [10]

Answer: b. Access to additional knowledge and expertise.

Explanation:

One of the advantages of opening a limited company be it private or public, is the additional knowledge that the other shareholders would bring on board.

In the case of a private company, the new shareholders would be from various backgrounds and would have knowledge on how to grow the business and in the case of a public company, the Board of Directors are usually drawn from various industries and so will put their experience from those industries into the company thereby giving it an edge.

3 0

2 years ago

An outside supplier has offered to provide the annual requirement of 7,200 of the parts for only $13 each. The company estimates

schepotkina [342]

Super corporation produces a part in the manufactures of its product. The unit cost is $21 computed as follows:

An outside supplier has offered to provide the annual requirement of 7,200 of the parts for only $13 each. The company estimates that 60% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:

Direct material 6

Direct labour 8

Variable manufacturing overhead 2

Fixed manufacturing overhead 5

Total cost 21

Answer:

Total financial advantage of buying from the supplier $43,200

Explanation:

Unit relevant variable cost of making= 6+8 +2 = 16

Variable cost of making ( 16× 7200) = 115,200

Variable of buying (13 ×7200) 93,600

Savings in variable cost 21,600

Savings in fixed cost (60%*72300 × 5) 21600

Total savings from buying 43,200

Total financial advantage of buying from the supplier $43,200

3 0

3 years ago