Answer:
Changes in the equilibrium interest rate
- affects both the size of the domestic output and the allocation of capital goods among industries.
Explanation:
Changes in interest rates affects the demand for goods and services and, thus, aggregate investment spending. A decrease in interest rates lowers the cost of borrowing, which encourages industries to increase investment spending.
The aggregate demand is determined by consumption demand and investment demand. When the rate of interest falls the level of investment increases and vice versa
An increase in the equilibrium interest rate affects demand for money. This increase in demand raises the equilibrium interest rate.
Households and businesses then try to decrease their cash holdings by purchasing bonds affecting both the size of the domestic output and the allocation of capital goods among industries.
The equilibrium interest rate changes with the economy and monetary policy.
Answer:
Answer is explained in the explanation section below.
Explanation:
Data Given:
Material Cost Per Trailer = $500
Material Cost plus Profit Per Trailer (15%) = $500 + 75 = $575
Selling Price = $1000
Labor Cost Remaining Per Trailer = $425
Formula to Calculate the number of Trailers:
X = X1 (
)
Where,
N = number of Trailers
S = Slope Parameter
X = $425
X1 = $700
So, First we need to find the slope parameter, in order to calculate the number of trailers to be built.
S = 
where, α = 0.85 rate of improvement.
Plugging in the values into the formula, we get:
S = 
S = -0.234
Now, we can easily find the number of trailers.
X = X1 ()
Plugging in the values,
425 = 700 x (
)
Solving For N, we get:
N = 8.4 Trailers
N = 9 Trailers.
Hence, 9 Trailers must be built in order to realize this rate of profit.
Answer: External secondary data
Explanation:
External secondary data are data gathered and saved by someone or a body that is not part of one's organization. Sources of External secondary data includes published materials, computerised databases and syndicated services.
Note that how difficult or easier it will be getting a secondary data will depend on the methods used in storing and indexing it.
Answer: 10 years to call
Explanation:
Maturity period = 25 years
Coupon rate = 7%
6.25% basis is,
- Callable in 10 years at 103
- Callable in 15 years at 102
- Callable in 20 years at par
This bond is considered as premium bond. Therefore, in case of premium bonds, Yield to call will be lower than the yield to maturity. Here, the question is which call date should be utilized. According to the rule of thumb, it states that always use the term that is nearest to the whole call date.
Hence, on the customer's confirmation, the dollar price quoted must be based on 10 years to call.
Answer:
The correct answer is d. risk aversion.
Explanation:
Risk aversion is an investor's preference for avoiding uncertainty in their financial investments.
Due to this attitude towards risk, this type of individuals directs their investment portfolio to safer financial assets even though they are less profitable.
The phenomenon of risk aversion implies by definition a certain level of risk rejection by a person who invests in financial markets. A person may face a risk aversion situation, be risk neutral or be risk prone.
