A firm has an earnings retention ratio of 40%. The stock has a market capitalization rate of 15% and an ROE of 18%. The stock's P/E ratio is P/E= 1-b/k-(ROE*b)= 7.69.
The formal name given to a found naturally organization of people with a particular goal, legally organized, or a mix of the two is a corporation, sometimes known as a co. The employees of the organization collaborate to accomplish definite objectives.
As long as the members of the business satisfy or fail to fulfil their responsibilities under the formation policy or public disclosure, a corporation may be established as a legal entity with limited liability. A company may need to be dissolved if it collapses in order to settle its obligations. When two or more firms join forces and register as a single new company, business combinations take place.
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typically result(s) in the acquiring firm being able to prevent valuable human resources in the acquired firm from leaving. a. financial slack b. private synergy c. high compensation d. friendly acquisitions
Friendly Acquisition is typically result in the acquiring firm being able to prevent valuable human resources in the acquired firm from leaving.
Option D is correct.
What is good Acquisition ?Good acquisitions share value creation on both the buy side and the sell side. Added value can be measured through organizational and cultural change. For example, a hardware company buys a startup and equips its business with a new software lens.
What is an acquisition strategy?The Acquisition Strategy identifies the acquisition approach and key assumptions and the business, technical, product support, security, and supportability strategies that the PM will employ to manage program risks and achieve program objectives. A comprehensive and integrated plan that describes the strategy.
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if the nominal interest rate is 10% and the inflation rate is expected to be about 4%, what is the approximate real interest rate?
If the real interest rate is yearly, then 10% and the anticipated rate of inflation is 4%,The nominal interest rate would be about.14% (10% + 4% = 14%).
What do you mean by interest?Your interests are indeed the things that you like to do and the things that you prefer to learn about. of curiosity. When something is interesting, it keeps your interest and piques your curiosity: There was not much of interest discussed.
What is an example of simple interest?Simple Interest (Innovative capabilities) is a way for figuring out how much interest will accrue on a specific principal sum of money at a certain rate of interest. For instance, if someone borrows Rs. 5000 at the a rate of Ten p.a. for 2 years, they will pay S.I. on the money borrowed for those two years.
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pertains to performance and the quality and quantity of task outputs as defined by team goals. a. commitment b. norm c. productive output d. capacity to adapt e. satisfaction
Productive output pertains to performance and the quality and quantity of task outputs as defined by team goals. option c
What is meant by productive output?The number of units actually produced by a single facility or operation over the course of a single continuous 12-month period is referred to as productive output.
Productivity is the amount of output that can be generated from a given set of inputs. When more output is generated using the same number of inputs or when the same amount of output is produced using fewer inputs, productivity increases. There are two productivity ideas that are frequently employed.
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in december 1994, a man in ohio decided to deposit all of the 8 million pennies he had been saving for nearly 65 years. (his deposit weighed over 48,000 pounds!) with a reserve requirement of 13 percent, how did his deposit change the lending capacity of
His bank's loan capacity changed by $76,000, and the entire banking system's lending capacity changed by $1,600,000.
How does a lender assess your ability?
Capacity. Lenders need to know if you can afford your payments comfortably. Your ability to repay outstanding debt is likely to be best predicted by your income and employment history. Considerations may include income type, level, and stability.
What are the different kinds of lending?
Personal (or "consumer") lending and commercial lending are the two main categories into which lending can be generally divided. Although they are handled differently, several loan kinds are accessible for both personal and commercial financing.
Briefing:
His bank's adjusted lending capability is calculated as follows: (1 - reserve requirement) times the amount deposited in dollars
(1 - 0.05) x (8 million pence x 0.01)
0.95 x 80,000 = $76,000
Supply and aggregate in dollars / bank reserves equals a change with in financial system in order to lend money.
80,000 / 0.05 = $1,600,000
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explain how a currency trader can make a profit from holding a foreign currency as a speculative asset.
Speculation is the practice of investing in a monetary product that entails a substantial risk of loss in value but also holds the potential for a sizable return.
What asset do you refer to?A thing that has current and future value is referred to be an asset. A machine or piece of equipment, a financial product, or a patent are examples of assets that typically provide cash stream in the future. Some examples of personal possessions include houses, automobiles, investments, objects of art, and home furnishings.
Which seven types of assets are included in total?Total assets, capital assets, precious metals, intangible resources, operative assets, and semi assets are six main groups that are frequently referred to in accounting. Your belongings might fit into more least 1 category. An object
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which of the following statements is not correct? group of answer choices the amount of social security tax withheld depends on an employee's gross earnings, marital status, and number of withholding allowances. federal law requires that social security, medicare, and federal income taxes be deducted from the gross pay of most employees. medicare taxes are levied in an equal amount on both employers and employees. once an employee's year-to-date wages reach a certain amount prescribed by law, social security tax is no longer withheld.
The gross income, marital status, and number of withholding allowances of an employee all affect the amount of social security tax withheld.
How Can I Get Rid of Social Security Taxes?You might be required to pay taxes on your Social Security income if you are still working in retirement. You could be required to pay up to 50% in taxes on your Social Security benefits if your annual income as a person is between $25,000 and $34,000. You could be required to pay up to 85% of your income if it exceeds $34,000. You can reduce your income, transfer income-producing assets to an IRA, take fewer withdrawals from retirement plans, and contribute your required minimum distribution to reduce your tax.
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fox autos is known for its affordable and reliable brand of consumer vehicles. because its shareholders expect to see an improved rate of growth in the coming years, fox's executives have decided to diversify the company's range of products so that at least 35 percent of the firm's revenue is generated by new business units. however, the company's resources, capabilities, and competencies are limited to producing other forms of motorized vehicles, such as motorcycles and all-terrain vehicles (atvs). which type of corporate diversification strategy should fox pursue?
Concentric diversification tries to market new items in industries that the company already operates in and that are connected. The objective is the same, but the format is different.
The hamburgers that include toys in their packets serve as an illustration of this. It is a product unrelated to food, but it also more successfully draws a certain demographic of customers. In this instance, the clients are young people. The business that adopts a vertical diversification strategy.
Bets on the development of goods that it previously purchased on the market. It happens, for instance, when a commercial distribution company decides to expand into manufacturing. You can discuss backward integration when retailer integrates with the manufacturer or forward integration, depending.
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after receiving the results of a self-assessment, you learn that you have a very low risk tolerance. with this knowledge, which business approach would be the least stressful for you?
Buy an existing business that is already successful would be the least stressful and also the best approach.
Buying an existing business is exactly what it sounds like.Usually, the buyer assumes total control of the company. The biggest benefit is having a pre-existing plan that might contain crucial elements like a clientele that is established, specified operational costs, and fully trained staff. Almost every form of business may be acquired or sold, regardless of the industry.
Usually, when you acquire an existing company, you have total control over its course. However, without a clear goal, support systems, or outside counsel, your company may struggle as you find out how to manage things.
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kent and lucy enter into a contract for the sale of mountain valley ranch. to be enforceable, this contract must be
If kent and lucy enter into a contract for the sale of mountain valley ranch. to be enforceable, this contract must be in writing or evidenced by a written memorandum.
What is contract?Contract can be defined as the agreement between two people or two or more parties in which the parties involve in the agreement must tend to agreed to the terms and condition of the contract.
For the contract between kent and lucy to be valid or enforceable the contract must be put in writing which will then be sign by the two parties. Based on this the contract between the both parties which is kent and lucy have to be in writing for the contract to be valid.
Therefore we can conclude that this contract must be in writing or evidenced by a written memorandum to be enforceable.
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on january 1, 2020, doone corporation acquired 70 percent of the outstanding voting stock of rockne company for $462,000 consideration. at the acquisition date, the fair value of the 30 percent noncontrolling interest was $198,000, and rockne's assets and liabilities had a collective net fair value of $660,000. doone uses the equity method in its internal records to account for its investment in rockne. rockne reports net income of $220,000 in 2021. since being acquired, rockne has regularly supplied inventory to doone at 25 percent more than cost. sales to doone amounted to $280,000 in 2020 and $380,000 in 2021. approximately 40 percent of the inventory purchased during any one year is not used until the following year. what is the noncontrolling interest's share of rockne's 2021 income? prepare doone's 2021 consolidation entries required by the intra-entity inventory transfers.
The noncontrolling interest's share of Rockne's 2021 income would be $66,000 ($220,000 x 30%).
Doone's 2021 consolidation entries required by the intra-entity inventory transfers would be: Debit Inventory $91,000
Credit Rockne Inventory $91,000
Debit Rockne Inventory $91,000
Credit Investment in Rockne $91,000
Since, intra-entity transactions produce more profits for consolidated financial accounts, intra-entity transactions between parent and subsidiary happen a lot. When compared to transactions with other entities, intra-entity transactions are generally less expensive.
An internal inventory transfer known as an intra-entity transfer results in no net change to the financial position of the business combination as a whole.
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stearns production company has budgeted 150 hours for each of three music videos they are producing and 16,000 hours for a movie they are producing in the month of august. they pay their employees an average of $26 per hour. how much do they need to budget for direct labor costs?
They need to budget for direct labor costs is $427,700
16,000 hours for a movie + (150 hours × 3 music videos) = 16,450 direct labor hours. This will cost the company a total of 16,450 × $26 = $427,700.
Direct labour cost means the wages given to the workers who are directly involved in manufacturing of the garments and the cost that may be traced according to garment.
Direct labor is production or services labor this is assigned to a specific product, fee center, or paintings order. whilst a business manufactures products, direct labor is considered to be the exertions of the manufacturing team that produces goods, inclusive of gadget operators, meeting line operators, painters, and so on.
Direct hard work includes the fee of regular working hours, as well as the overtime hours worked. it's also related payroll taxes and expenses such as social safety, Medicare, unemployment tax, and worker's employment insurance.
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a zero coupon bond has a par value of $1,000 and matures in 6.5 years. the yield to maturity is 5.5%. what is the macaulay duration?
A zero-coupon bond's Macaulay duration is equal to the number of years till maturity. The Macaulay time is 6.5 seconds. The value remains unchanged.
Although there are many different ways to compute Macaulay duration, the basic formula involves adding the coupon payment per period, multiplied by the time to maturity, divided by 1, and the yield per period raised to the time to maturity. However, regardless of the yield to maturity, for zero-coupon bonds, duration is the same as time to maturity.
By multiplying the time period by the periodic coupon payment and dividing the resultant value by 1 plus the periodic yield increased to the time to maturity, the Macaulay duration is determined. The value is then determined for each period and totaled. To determine a bond's yield-to-maturity (YTM), first divide the bond's face value (FV) by its present value (PV). The number of compounding periods is divided by one, and the result is then raised to the power of one.
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metlock corporation has 163,000 shares of $20 par value common stock outstanding when it announces a 4-for- 1 stock split. before the split, the stock had a marketprice of $140 per share. after the split, how many shares of stock will be outstanding? what will be the approximate market price per share? number of shares shares market price
Common Stock Outstanding Shares is 60,000 shares and Market Price Per share is $60
Every shareholder will get an additional share of common stock on each share under a 2-for-1 stock split.
We are given that,
Number of shares=163000 shares
Market price per share=$140
Thus we have to find the value of Common Stock Outstanding and Market Price per share , After splitting of Common Stock Outstanding the shares will be ,
Shares=163000 shares × 2
Common Stock Outstanding Shares=326,000 shares
The share price will be split in half as a result of the split and market price per shares will be,
Market Price per share=$140/2
Market Price Per share= $70
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From the following list, identify the accounts that should be closed to Retained Earnings at the end of the fiscal year: a. Accounts Payable b. Accumulated Depreciation-Equipment c. Depreciation Expense-Equipment d. Equipment e. Common Stock f. Dividends g. Fees Earned h. Land i. Supplies j. Supplies Expense k. Wages Expense I. Wages Payable 6 more Check My Work uses remaining.
A closing entry is a journal entry that is made at the conclusion of an accounting period to move balances from a temporary account to a permanent account.
What is accounting period?A set period of time is referred to as an accounting period and is used to perform, collect, and analyse accounting functions. Weeks, months, quarters, fiscal or calendar years can all make up an accounting period. The accounting period is helpful in investing because prospective shareholders can assess a company's performance by looking at its financial statements, which are based on a set accounting period.
a. Accounts Payable :- Not closed to Retained earnings.
b. Accumulated Depreciation :- Not closed to Retained earnings.
-Equipment
c. Depreciation Expense-Equipment :- closed to Retained earning.
d. Equipment e. Common Stock :- Not closed to Retained earnings.
e. Common Stock :- Not closed to Retained earnings.
f. Dividends :- closed to Retained earning.
g. Fees Earned :- closed to Retained earning.
h. Land :- Not closed to Retained earnings.
i. Supplies :- Not closed to Retained earnings.
j. Supplies Expense :- closed to Retained earning.
k. Wages Expense :- closed to Retained earning.
I. Wages Payable :- Not closed to Retained earnings.
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which type of ad can cigarette companies legally run? group of answer choices magazine ad placard in a baseball stadium tv ad roadside billboard
Cigarette manufacturers are permitted to lawfully run magazine ads. The legal system consists of institutions, procedures, and norms that govern both public and private initiatives.
What does the term "legal difficulties" mean?
An "issue" is a disagreement between the parties to a lawsuit in legal parlance. A set of securities offered for sale or a person's lineal descendants are both examples of legal issues.
What, if any, legal significance?
a way of indicating that there may be no instances or examples of the core notion in inquiries or statements. The usage of the phrase in the sample sentence below demonstrates that the author is aware that there could not even be any reporting requirements.
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your broker requires an initial margin of $4,000 per futures contract on soybeans and a maintenance margin of $3,000 per contract. soybean futures contracts are based on 5,000 bushels and quoted in cents per bushel. yesterday, you bought six soybean futures contracts at the closing settlement price of 1380. today, the settlement quote is 1335. all margin calls restore margin levels to their initial margin level. will you receive a margin call and, if so, for what amount?
Yes, you will receive a margin call and the amount call is $13,500.
What is margin call?Margin is the security that a financial instrument holder must deposit with a counterparty (often their broker or an exchange) to cover all or part of the credit risk the holder poses for the counterparty. The following actions by the holder could put them at risk:
borrowed money from the counterparty to buy securities,
borrowed financial products to be short sold,
a derivative contract was entered into.
A margin account's collateral, which represents the funds available to the account holder for additional share trading, can be either the money deposited in the account or the securities offered. Prior to becoming known as margins, performance bonds were the term used on American futures exchanges. The majority of today's exchanges are in SPAN.
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What are some of the customization options in the Animation Pane? Check all that apply.
add animations
reorder animations
remove animations
set timing of animations
preview animations
With Animation Pane you can:
add animationsreorder animationsremove animationsset timing of animationspreview animationsWhat is Animation Pane?Generally, Animation Pane is a feature in Microsoft PowerPoint that allows users to manage and customize the animations applied to elements in a presentation. It allows users to view, add, modify, and delete animations in a slide.
To access the Animation Pane, you can go to the "Animations" tab in the ribbon and click on the "Animation Pane" button. The Animation Pane will appear on the right side of the PowerPoint window, showing a list of all the animations applied to the current slide.
In the Animation Pane, you can:
Add animations: You can add new animations to an object or text by selecting it and then choosing an animation from the list of available animations.
Reorder animations: You can change the order in which animations play by clicking on an animation in the Animation Pane and dragging it up or down to a new position.
Remove animations: You can remove an animation by clicking on it in the Animation Pane and then clicking the "Remove" button.
Set timing of animations: You can set the timing of an animation by clicking on it in the Animation Pane and then using the options in the "Start" and "Duration" fields to specify when the animation should start and how long it should last.
Preview animations: You can preview the animation by clicking the "Play" button in the Animation Pane. This will play all of the animations in the order that they are listed in the Animation Pane.
Note that these are just some of the customization options available in the Animation Pane. There may be additional options depending on the version of the software you are using and the specific animation you have selected.
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Answer:B, C, D, E
Explanation:
right on edge22
on january 1, 2022, monty corp. had retained earnings of $499,000. during the year, monty had the following selected transactions. 1. declared cash dividends $122,000. 2. earned net income $349,000. 3. declared stock dividends $58,000. determine the retained earnings balance at the end of the year.
The presented statement indicates that the retained profits balance was $678,000 at the conclusion of the fiscal year.
What do transactions go by?An executed contract in between a seller and a buyer to trade products, services, or bank deposits in exchange for money is known as a transaction. The phrase is also frequently used in business accounting.
Briefing:The following is the statement of retained earnings for the year ending December 31, 2022 for Novak Corp.:
Retained Earnings Balance, January 1 = $499,000
Net Income = $349,000
Total amount in ended December 31, 2022 = $499,000 + $349,000
= $848,000
Less:
Cash Dividends: $112,000
Stock Dividends: $58,000
The total less = $112,000 + $58,000 = $170,000
Retained Earnings Balance, December 31 = $848,000 + $170,000
= $678,000
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One consideration in choosing a marketing channel is profitability, which is determined by the margins earned for each channel member and for the channel as a whole. Based on this information, which of the following statements would be most accurate?- The more responsibilities a channel member takes in terms of distribution, advertising, and selling expenses, the greater the potential for manufacturer profitability.- The more responsibilities the manufacturer assumes relative to its channel members, the greater the potential for profitability.- The extent to which channel members share costs determines the margins received by each member and by the channel as a whole.- While channel members can increase profitability by taking on distribution and selling expenses, advertising expenses should always remain with the manufacturer if a firm is looking for the greatest profitability.- Profitability is not related to the length or nature of the distribution chain but determined by the manufacturer.
Option (c), The margins that each channel member and the channel as a whole obtain depend on how much they share costs.
How much money does the channel of distribution make?The channel margin is, to put it simply, the difference between what the client pays and what the supplier must pay at that particular point in the distribution channel. Channel margins can be computed as a percentage of the selling price or as a per-unit sum.
What four types of distribution are used in supply chain management?There are four main distribution channels that a business can choose from when deciding how to advertise its products most effectively. Direct sales, wholesale, brokerage, and dual distribution are some of the options. Choose your distribution partners for your supply chain carefully to follow best practices.
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An upward shift in the consumption function, other things being equal, could be caused by households:
a. becoming optimistic about the state of the economy.
b. becoming pessimistic about the state of the economy.
c. expecting future income and wealth to decline.
d. None of the above are correct.
Answer: a. becoming optimistic about the state of economy
Explanation: In the example given, being upbeat about the state of the economy suggests that it is growing while other factors remain constant. In this scenario, the GDP will increase along with the income, salaries, employment, and investment growth, which will also cause the consumption function to shift upward.
the ordinary rules of agency normally do not apply to the employment of corporate officers. true false
The given statement ''the ordinary rules of agency normally do not apply to the employment of corporate officers'' is false.
Explain the law of agency ?A person, known as the agent, who is permitted to act on behalf of another (known as the principal) to establish legal contacts with a third party is dealt with under a set of contractual, quasi-contractual, and non-contractual fiduciary relationships under the law of agency. In a nutshell, it may be described as the equal connection between a principle and an agent in which the principal, either explicitly or tacitly, gives the agent permission to act on their behalf and under their supervision. Thus, the agent must engage in negotiations on behalf of the principle or establish contractual relationships between the principal and third parties.The ordinary rules of agency normally apply to the employment of corporate officers.
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true or false? common uses for active lists include sending unique marketing emails based on each contact's behavior and properties. true false
Sending customized marketing emails based on the traits and behaviors of each contact is a typical usage for active lists.
which are contained in the active lists? Active lists. Placing outbound calls to contacts based on behavior and property values. sending customized marketing emails depending on each contact's behavior and characteristics.Organize your contacts according to their lifecycle stages to regularly track their behavior and characteristics. You may construct a list of contacts or businesses using HubSpot's lists tool based on factors like property values and other criteria, such as actions.This article contains instructions for using the lists tool to create and edit lists.Learn how to choose criteria or manually add records to static lists to set up your list criteria and update existing lists.Your HubSpot account contains two different kinds of lists: active lists and static lists.Based on its criteria, active lists update their members automatically.Records will be added to the list when they meet the requirements, and removed from the list when the requirements are no longer met.To learn more about HubSpot's lists tool refer
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a corporation issued 120 shares of its $5 par value common stock in payment of a $2,000 charge from its accountant for assistance in filing its charter with the state. the entry to record this transaction will include:
For assistance in submitting its charter to the state through an accountant. This transaction's entry will be included in the journal entry again for transactions.
What are journal entries?Maintaining as well as recording non-economic or economic transactions is known as journal entry. Accounting journals that display the company's credit and debit balances are used to record transactions. Multiple entries, apiece representing a debit or credit, can be included in a journal entry.
What is journal entry format?A journal entry format is a standard format used in bookkeeping to record all business transactions of a company and is primarily based on the double-entry bookkeeping system of accounting to ensure that debits and credits are always the same .
Entries for transaction:The journal entry for the transaction
Common stock- par value (cr) 120 × 5=600
Excess of par value paid in capital (cr) 1400
Legal expense (db) 2000
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describe the options that you have if the goods that you receive as a buyer are nonconforming to the goods described within a written sales contract?
Nonconforming goods are delivered that don't satisfy the specifications (quantities and qualities) of the requested goods defined in a purchase contract.
What are the remedies available to a buyer?1. Lawsuit for Damages for Non-Delivery - If the seller wilfully fails or declines to deliver the products to the buyer, the buyer may bring a lawsuit for damages for non-delivery. Additionally, in the event of non-delivery, the buyer has the right to get their money back, if they have already paid the price.
2. Lawsuit for price - In the event that the buyer has already paid the price but the items are not delivered to him, he may sue to reclaim the money.
3. Suit for specific performance - When the goods are specified or determinable, the buyer may bring legal action against the seller to require him to fulfil the same goods as agreed upon under the terms of the contract. Only in cases where the products are specific or known, does the court issue orders for specific performance and damages.
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u.s. corporation wright air conditions borrows funds to build a factory in the u.s. and a factory in mexico. borrowing for factories in which location(s) is included in the u.s. demand for loanable funds?
Location(s) is included in the U.S. demand for loanable funds.
What is fund?Funds are pools of capital that are managed by financial professionals in order to achieve investment goals. Funds can be invested in different asset classes such as stocks, bonds, commodities and money market instruments. Funds are typically used by investors to diversify their portfolio, reduce their risk and increase their potential return on investment. Funds typically have a minimum investment amount and may charge fees for administration and/or management. Funds may also be tax-advantaged, providing investors with tax benefits for investing in them. Funds are a popular investment choice for many investors, as they provide professional management and diversification with a relatively low cost and low minimum investment amount.
The U.S. demand for loanable funds includes borrowing for factories in both the U.S. and Mexico. When a U.S. corporation borrows funds to build a factory in both countries, the U.S. demand for loanable funds increases as more money is borrowed. As the corporation borrows funds in both countries, the U.S. demand for loanable funds increases due to the need for additional funds to build the factories in both countries. As the U.S. demand for loanable funds increases, loanable funds become more expensive as lenders increase the interest rates to cover the increased demand for funds.
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The hands-off view of the classical school rests on which of the following two simple propositions about markets? a. Demand creates its own supply and markets are basically competitive. b. Industrial policy is inevitable and all prices are flexible. c. Market failure occurs and prices are rigid. d. Wages are sticky downward and market failure is inevitable. e. Markets are basically competitive and prices are flexible.
The hands-off view of the classical school rests on Markets are basically competitive and prices are flexible.
Hence, option E is correct.
How does this occur?
A lClassical economic theory was created not long after western capitalism first emerged. It alludes to the predominant school of economic theory in the eighteenth and nineteenth century. Classical economic theory aided nations in their transition from monarchical to self-regulatory capitalistic democracies.
All marketing efforts that are conducted the conventional method, away from the internet, are referred to as traditional marketing (or classical marketing). It makes use of conventional media, particularly broadcasting, including television, radio, print newspapers and magazines, telephony, and billboards for outdoor advertising.
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what refers to the selection and promotion of government employees on the basis of examinations and qualifications?
The Pendleton Act provided that federal government jobs be awarded on the basis of merit and that government employees be selected through competitive exams.
What inspired the Pendleton Act's creation?On January 16, 1883, the Pendleton Civil Service Act was ratified by President Chester A. Arthur. (1) The legislation was designed to protect everyone's freedom to apply for federal positions without receiving any preference based on their political beliefs, race, religion, or country of origin.
What did President Pendleton's Act entail?In his capacity as president, he surprised his detractors and angered many of his allies in the Stalwart faction of the Republican Party by endorsing the Pendleton Civil Service Act (1883), which allowed for the open appointment and promotion of federal employees based on merit rather than favoritism.
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when one firm responds to a rival's cheating by cheating and to a rival's cooperation by cooperating, that firm is practicing a:
When is the case here, as more businesses enter an oligopolistic market, collaboration becomes more difficult as revenues. The correct response is D.why firms will not cooperate if they behave strategically.
Decline and businesses begin to act more egotistically. Companies will always be looking to cheat in order to make this profit, so in this scenario the cheating firm has an incentive to do so because the profit is so much bigger than sharing. The other businesses would respond by raising prices.
And they would all suffer the prisoner's dilemma is cited or recognised as a game theory example that tends to show why it can be challenging to organise and keep collaboration, even though it could be extremely beneficial to both parties.
Complete question:
when one firm responds to a rival's cheating by cheating and to a rival's cooperation by cooperating, that firm is practicing a
A. why firms have an incentive to cheat on agreements.
B. how oligopolists engage in implicit collusion under strategic situations.
C. how cooperation in strategic situations leads to the economically efficient market outcome.
D. why firms will not cooperate if they behave strategically.
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which of the following would cause an increase in aggregate demand? i. congress cuts personal income taxes. ii. the degree of excess capacity increases. iii. the quantity demanded of imports increases.
The correct option is A, Congress cuts personal income taxes causing an increase in aggregate demand.
Aggregate demand is an economic concept used to describe the total demand for goods and services in an economy at a given time. It is the sum of all the individual demands for goods and services in the economy, including both consumer and business spending. Aggregate demand is an important concept in macroeconomics, as it is an important determinant of a nation’s overall economic health.
When aggregate demand is high, it indicates that the economy is doing well and that people are spending money. When aggregate demand is low, it indicates that people are not spending as much money, which can lead to an economic downturn. Aggregate demand is affected by a number of factors, including changes in the money supply, interest rates, and government spending.
It is also affected by changes in consumer confidence, which can lead to changes in consumer spending. In order to maintain a healthy economy, it is important for aggregate demand to be kept in balance with aggregate supply.
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what is the impact on economic capital of a 25 basis point decrease in interest rates if the fi is holding a 20-year, fixed-rate, 11 percent annual coupon bond selling at a par value of $100,000?
Positive $2,024 shows that bond value increased by $2,024 due to decrease in interest rates by 25 basis point as impact on economic capital.
What is interest rate?
The interest rate formula aids in determining the loan repayment amount as well as the interest on investments made in fixed deposits, mutual funds, etc. Calculating the interest on credit cards is made easier by using the interest rate formula.
Decrease of 25 basis point decrease in interest rates ,means 0.25% decrease in YTM yield to maturity or market interest rates , 100 basis points means 1% .
By calculating bond value at a lower YTM or market interest rate and contrasting new bond value with existing bond value, the impact on economic capital will be determined.
Since the bond in the example was sold for par value, the yearly coupon rate, which was previously 11%, has now been cut by 0.25% to 11%-0.25%, or 10.75%, but since the coupon has not changed in our case, it will still be 11%.
Annual coupon = Face value of bond x Coupon Rate = 100,000 x 11% = $11,000
YTM is 10.75% p.a (annual) reduced YTM or interest rate
n= no. of coupon = No. Of years left = 20
bond price = $11000 x 8.09529899 + 100000 x 0.12975535
= $102,024
Impact on economic capital = New Bond value - old Bond value
= $102,024 - $100,000
= $2,024
positive $2,024 shows that bond value increased by $2,024 due to decrease in interest rates by 25 basis point as impact on economic capital.
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