Answer:
E. High manufacturing cost
Explanation:
Export involves the sales of goods and services to another country. It is part of the international trade whereby goods produced in a country are sold to other countries. Just like all business activities, there are risk involved. Risk of exporting is the likelihood that there will be a loss in the sales of goods and services to another country. Various risk factors includes tariff barriers, cost of transportation and so on.
However, high manufacturing cost is not a risk of exporting. High manufacturing cost is the increase in the cost of producing and manufacturing a certain good. When this increases or rather when it's high, the prices of the products manufactured also increases. So there is no potential loss posed by high manufacturing cost.
The statement that holds true for the American Option is (A) Put-call parity provides an upper and lower bound for the difference between call and put prices
Explanation:
According to the Put-call parity concept when we hold the short European put and long European call of similar class the return delivered is same as holding one forward contract of the same underlying asset, that has the same expiration, forward price and which is equal to the strike price of the option
In financial management put–call parity concept is used to define the relationship that exist between the price of a European call option and European put option, and both of them have identical strike price and expiry
The formula used for calculating put call parity is
c + k = f +p
where (c) call price plus the (k) strike price of both options is equal to the futures price(f) plus the put price(p)
Answer: The correct answer is "firms offer different levels of service".
Explanation: Firms might charge different prices for the same product even when transactions costs are zero and the product can be resold if the <u>firms offer different levels of service. </u>Because depending on the level and quality of the service offered they may charge a higher or lower price.
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Answer:
D. Aggregate demand curve would shift to the right
Given Information:
P = $14,500
r = 8 %
Period = 12 years
Required Information:
Equivalent annual cost = ?
Answer:
Equivalent annual cost = $1,924
Explanation:
The equivalent annual cost EAC is often used to compare assets which have unequal useful life spans in order to make more cost effective decisions.
The equivalent annual cost can be found by using the following equation:
Equivalent annual cost = Present value*r / 1 - (1 + r)⁻ⁿ
Equivalent annual cost = 14,500*0.08/1 - (1+0.08)⁻¹²
Equivalent annual cost = $1,924
