Answer:
3.18 years
Explanation:
The formula to compute the payback period is shown below:
= Initial investment ÷ Net cash flow
where,
The Initial investment is $1,750
And, the net cash flow for 9 consecutive years is $550
Now put these values to the above formula
So, the value would equal to
= ($1,750) ÷ ($550)
= 3.18 years
All other information which is given in the question is not relevant. Hence, ignore it
Answer:
D. a low-load variable annuity separate account with a growth objective
Explanation:
The customer plans to retire in 20 years, and even though his earnings are relatively high, his assets and net value are not. Before his father died, he only had $10,000 to invest, so he cannot afford to take high risks.
A low load investment is one whose managers charge low management fees. A variable annuity is a type of investment that yields a variable return depending on how the investment portfolio performs. In order to be able to have a larger future return, the growth objective would be to have a portfolio that grows, and not necessarily yields annual returns, e.g. zero coupon securities or stocks that pay low dividends or even no dividends at all but have a higher growth rate.
Answer:
The number of year needed to save the amount = 36.2739
Explanation:
The annual deposit amount (A) = $2000
Annual interest rate (r ) = 12 %
The retirement amount or the expected amount at the time of retirement (FV) = $1000000
Number of years = n
So if the Jughead want the retirement amount $1000000 that has interest rate 12 percent then we need to calculate the number of years.
Below is the calculation of number of years.
Answer:
1. This would increase the reserves account and<u> increase</u> the <u>debt</u> account.
Borrowing refers to debt and so it will increase the debt account.
2. This would also bring the leverage ratio from its initial value of<u> 13.33</u> to a new value of <u>14</u>.
The bank leverage ratio refers to its Assets divided by Capital (Owners equity).
Before the $100 was borrowed, the leverage ratio was;
= (Reserves + loans + securities)/Capital
= ( 200 + 800 + 1,000) / 150
= 13.33
After the $100 was borrowed
= ( 200 + 800 + 1,000 + 100) /150
= 14.
3. a. The higher the percentage of assets a bank holds as loans, the higher the capital requirement.
The capital requirement is meant to protect depositors in case the loans are defaulted on as the loans are created from the funds depositors bring in. Should the loans be defaulted on, they will be paid from the capital therefore if the bank holds more loans, it will have to hold more capital to ensure it can cover those loans.