Consider an extended IS-LM model in which investment depends on the 'borrowing rate' i - + x, where i is the nominal policy interest rate, ne is the expected inflation rate and x the risk premium on corporate bonds. Let Y C T = = = C+I+G co+=(Y – T) 110 bo - 1000(i – Te + x) 125 0.03 0.05 0.01 G į = = = = Te (a) Suppose that co = 50, bo = 150. Find the equilibrium solution for output, consumption and investment.
(b) A natural disaster hits the economy. The level of potential output declines, and the natural disaster also affects consumer confidence and firms' animal spirits: autonomous consumption and investment fall to the values co = 40 and bo = 130.
i. Calculate the new equilibrium solution for output and explain the economic intuition behind the change in output. ii. Some groups of people have been hit hard by the natural dis- aster. Suppose that disaster relief to these groups has reduced taxes net of transfers to T = 90 and raised government con- sumption to G = 135. Taking into account these changes to government consumption and taxes, what are the equilibrium values of output, consumption and investment? iii. Would you recommend any additional economic policy interven- tion if policy makers want to make output equal to the new level of potential output? Consider two cases: in case one the new level of potential output is Yn = 390; in case two it is Yn = 370. Explain your answer and - if you recommend additional inter- vention - describe the policies that you would suggest and their implications for consumption and investment in each of the two cases. iv. Arguably the natural disaster will also affect the risk premium 2. Briefly discuss how the risk premium might be affected and describe the implications for the short run equilibrium value of output. (c) Discuss the relevance of the analysis under (b) to the policy issues posed by COVID-19.
Answers
The equilibrium solution for output, consumption, and investment when co = 50 and bo = 150 is: Y = 320 - 1000i + G; C = Y - I - G; I = 110 - 1000(i - Te + x).
Given the extended IS-LM model, where \(Y = C + I + G\) and investment depends on the borrowing rate, \(i + x\), the equilibrium values for output (Y), consumption (C), and investment (I) can be found by setting savings equal to investment, and solving for Y, C, and I.
The savings function is given by:
\(S = Y - C - T = bo - 1000(i - Te + x)\)
Since investment depends on i + x, we can write:
\(I = 110 - 1000(i - Te + x)\)
Using the government budget constraint, G = T - net transfers, we get:
\(Y = C + I + G\)
\(Y = C + 110 - 1000(i - Te + x) + G\)
Substituting S into the Y equation gives:
\(Y = bo + S + G\)
\(Y = bo + [bo - 1000(i - Te + x)] + G\)
\(Y = 2bo - 1000i + 1000Te - 1000x + G\)
Plugging in the values \(co = 50\), \(bo = 150\), \(Te = 0.03\), and \(x = 0.01\), we get:
\(Y = 2(150) - 1000i + 1000(0.03) - 1000(0.01) + G\)
\(Y = 300 - 1000i + 30 - 10 + G\)
\(Y = 320 - 1000i + G\)
Therefore, the equilibrium solution for output, consumption, and investment when co = 50 and bo = 150 is:
\(Y = 320 - 1000i + G\)
\(C = Y - I - G\)
\(I = 110 - 1000(i - Te + x)\)
In the event of a natural disaster, the level of potential output declines, and autonomous consumption and investment fall to the values co = 40 and bo = 130. This means that the equilibrium level of output will also decline.
Plugging in the new values of co = 40, bo = 130, and Te = 0.03, and x = 0.01 into the equilibrium equation for Y gives:
\(Y = 2(130) - 1000i + 1000(0.03) - 1000(0.01) + G\)
\(Y = 260 - 1000i + 30 - 10 + G\)
\(Y = 280 - 1000i + G\)
Therefore, the new equilibrium solution for output is \(Y = 280 - 1000i + G\).
The economic intuition behind the change in output is that the natural disaster has reduced the capacity of the economy to produce goods and services, which reduces potential output. This, in turn, leads to a decline in autonomous consumption and investment, which lowers the equilibrium level of output.
Suppose that disaster relief to the affected groups reduces taxes net of transfers to T = 90 and raises government consumption to G = 135. This means that the government budget constraint has changed to G = T - net transfers + 45.
Plugging in the new values of T = 90 and G = 135 into the equilibrium equation for Y gives:
\(Y = 2(130) - 1000i + 1000(0.03) - 1000(0.01) + 135\)
\(Y = 260 - 1000i + 30 - 10 + 135\)
\(Y = 415 - 1000i\)
Therefore, the new equilibrium solution for output is Y = 415 - 1000i.
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Related Questions
Gretchen is preparing a sales presentation for the executive team. What organizational structure is she MOST likely to use?
A)keynote
B)myth-buster
C)theme by theme
D)problem to solution
Answers
Answer: D)problem to solution
Explanation:
Which part, sentence, or phrase in the passage suggests that the respective entrepreneur is a transformational leader? Four best friends from high school—Erwin, Harry, Mick, and Gary—have gone on to become entrepreneurs. They have very different personalities, and thereby, leadership styles. Erwin A(seems to concern himself with the processes rather than forward-thinking ideas.) Harry is B(finicky about minute details, but always gets the job done). C(Mick seeks advice from others and has great concern for his employees). Gary D(rewards effective behavior of his employees, and corrects them when the expectations are not met.)
Answers
Answer:
Garry
Explanation:
Brainliest please! :)
Answer:
(D) "rewards effective behavior of his employees, and corrects them when the expectations are not met."
Explanation:
one focus of strategic trade policy is to help domestic companies gain Multiple Choicemore competition to lower prices. a first-mover advantage. monopoly status. less competition to raise prices. exclusive intellectual property rights.
Answers
The correct option is A. One focus of strategic trade policy is to help domestic companies gain a first-mover advantage.
Strategic trade policy refers to that trade policy that affects the outcome of strategic interactions between firms in an actual or potential international oligopoly.
Strategic trade policies are implemented by the government in order to increase national income through the strategic use of export subsidies. The main idea behind this is to raise the economy by shifting profits from the foreign market to domestic markets.
Governments can aid domestic companies in establishing a presence in developing markets or industries by enacting strategic trade policies like subsidies, tariffs, and other types of protectionism. They may be able to establish a dominant position as a result, making it challenging for later entrants to compete successfully.
Helping domestic businesses gain a first-mover advantage is one of the main goals of strategic trade policy because it can give them a significant competitive edge in the international market. The advantages that a business can get by being the first to enter a market or introduce a new product or technology are referred to as first-mover advantages.
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the net effect of most of franklin roosevelt's early foreign policy moves was that
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The net effect of most of Franklin Roosevelt's early foreign policy moves was to remove the United States from a position of isolationism and to actively intervene in global affairs.
Franklin D. Roosevelt was the United States' thirty-second president. Before he became president in 1933, the United States had chosen to isolate itself from global events after World War I. Roosevelt was elected to three presidential terms and, with his New Deal and foreign policy interventions, transformed the role of the federal government during the Great Depression.
Roosevelt started taking a number of actions on foreign policy very early in his presidency. In 1933, he announced that the United States would cease participation in the London Economic Conference and seek to increase trade outside of Europe. He also recognized the Soviet Union in 1933 and extended diplomatic recognition to the Communist government.The United States would no longer be a country of isolationism as a result of Roosevelt's early foreign policy actions. As a result of Roosevelt's actions, the US would become increasingly engaged in global affairs, with Roosevelt at the helm.
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you recently finished an essay on the milky way galaxy in google docs, but you can’t locate the file anywhere on your Google Drive. What should you do?
Answers
Answer:
Google docs
Explanation:
Have you checked your files on your google docs or if they aren't there try searching for them on your phone.
Answer:
In Google Drive, enter a keyword in the search bar and press Enter. A list of files and folders matching your keyword search appears.
Select a folder or any type of file. ...
You can also select a folder or a Google file, right-click and select Show file location
Which are the roles of a bank? Check all that apply.
Storing and holding money
Making purchases to create profits
Lending money
Investing in the economy
Creating money for the economy
Answers
Main purpose of banks
Keep money safe for customers.
Offer customers interest on deposits, helping to protect against money losing value against inflation.
Lending money to firms, customers and homebuyers.
Offering financial advice and related financial services, such as insurance.
The roles a bank plays includes:
Storing and holding moneyLending moneyWhat are banks?A bank is a financial institution that accepts deposits, lends money, stores valuables from customers. The activites of banks are guided by the Central Bank. The Central Bank is responsible for creating money in the economy.
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Josh began his career as the front desk clerk of a large hotel. He enjoys working in the Lodging pathway of the Hospitality and Tourism career cluster. He wants to stay along this career path so Josh decides to get some further education. What types of classes would help Josh advance along his career pathway? After finishing his education, what positions might be available to Josh along his career path?
Answers
Answer: Classes that might help Josh advance along his career path would to be a sub/standby when important hospitalization acts are taken place. After Josh finishes his education a position that might be available to him along his career path would be a nurse or someone who is authorized to help people.
Answer: Classes that would be good for Josh would be a sub/standby education When Josh finishes his education a job that might be available to him with his career path would be a nurse or someone who is trained to help other people.
Explanation: I just hope this helps :)
Brenda Smith operates her own farm raising chickens and producing eggs. She sells her eggs at the local farmers market, where there are several other egg producers also selling eggs by the dozen. (Brenda operates in a perfectly competitive market in which she is a "price taker.") To make sure she does not lose money on selling eggs, she does an analysis of her costs for producing eggs as shown on Table 3.
What kind of table is this and what is it doing?
Answers
The cost-benefit analysis is a tool used in the decision-making process to determine the feasibility of a project or plan. It involves examining the costs of taking a specific action and the benefits that will result from it.
In this case, Brenda Smith is conducting a cost-benefit analysis of her egg production to ensure she doesn't incur losses. The cost table provided lists the total variable cost of producing eggs, which includes expenses such as chicken feed, egg cartons, and labor.
Based on the cost table, Brenda can calculate her total variable cost for producing a dozen eggs, which is $0.75. To ensure she makes a profit from selling eggs, Brenda needs to charge a price higher than her total variable cost.
The cost-benefit analysis will help Brenda evaluate whether the potential benefits of selling eggs at a certain price outweigh the costs associated with production. By considering the costs and benefits, Brenda can make an informed decision about her egg production and set a price that allows her to cover her costs and generate a profit.
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The _____ perspective identifies the infrastructure and skills needed to carry out business processes, interact with customers, and achieve long-term financial growth.
a.
customer
b.
learning and growth
c.
financial
d.
business process
Answers
The learning and growth perspective is one of the four perspectives in the Balanced Scorecard framework, which is a strategic management tool used by organizations to measure and manage their performance. The learning and growth perspective focuses on the organization's ability to develop and enhance its capabilities, including its infrastructure and skills, in order to support the achievement of its strategic objectives. The correct answer is (b). Learning and growth
In the context of the given sentence, the learning and growth perspective would be relevant because it pertains to the infrastructure and skills needed to carry out business processes, interact with customers, and achieve long-term financial growth. This perspective recognizes that an organization's success is not solely dependent on its financial performance, but also on its ability to continuously learn, improve, and innovate in order to sustain its competitive advantage and meet the evolving needs of its customers and stakeholders.
Overall, the learning and growth perspective emphasizes the importance of investing in human capital, technology, organizational culture, and other intangible assets that contribute to the organization's ability to effectively execute its business operations, communicate with consumers, and achieve long-term financial success.
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what is the role of doctors in our society?
Answers
exercise 4-34 (algo) target costing and pricing (lo 4-3) whitmore glassware makes a variety of drinking glasses and mugs. the company's designers have discovered a market for a
Answers
The highest acceptable manufacturing cost for which Domingo would be willing to produce the headphones is $31.68.
To calculate the highest acceptable manufacturing cost for which Domingo would be willing to produce the headphones, we need to first determine the desired profit margin and then subtract it from the target selling price.
The desired operating profit of Domingo is 20% of costs, which means that the profit margin is 20% of the selling price. We can calculate the profit margin as:
Profit Margin = 20% of Selling Price
= 20% x $39.60
= $7.92
The target selling price of the headphones is $39.60, so the manufacturing cost that Domingo can afford would be:
Manufacturing Cost = Target Selling Price - Desired Profit Margin
= $39.60 - $7.92
= $31.68
Therefore, the highest acceptable manufacturing cost for which Domingo would be willing to produce the headphones is $31.68.
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Domingo Corporation makes a variety of headphones with logos. The company has discovered a new market for wireless headphones with logos Market research indicates that these headphones would sell well in the market priced at $39 60 each Domingo desires an operating profit of 20 percent of costs.
Required:
What is the highest acceptable manufacturing cost for which Domingo would be willing to produce the headphones?
Two benefits of self employment
Answers
Self-employment provides strong earning potential as people have more control over their own progression. Going hand-in-hand with the flexible lifestyle, individuals who work for themselves can go over and above to work long hours on some days, network, and reap the benefits of their hard work.
How geography and culture might influence the creation of free trade agreements
Answers
Answer:
This 'natural' geography of RTAs can be gauged against the actual one to provide an estimation of the economic consequences of a different geography of trade costs, closer to the predicted one. Among the economic determinants of an RTA, one should not miss the presence of global value chains (GVCs).
The primary obstacles to the expansion of international commerce are language and cultural barriers. The expenses of commerce will increase as differences grow.
What is culture?A culture is referred to as a set of beliefs, traditions, values, customs, and rituals, followed by an individual in a community in order to preserve their ancestor's belongings.
An agreement to establish a free-trade zone between the collaborating governments is known as a free-trade agreement under international law.
It aspires to create deeper trade and commercial connections between member nations and to lower or remove some barriers to investment and commerce.
Generally, trade agreements should benefit consumers by lowering trade barriers on foreign goods, increasing product diversity, granting access to higher-quality goods, and lowering prices.
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Means that the purchase and consumption of a good makes the purchase and consumption of that good unavailable to another person.
Answers
Rivalry means that the purchase and consumption of a good make the purchase and consumption of that good unavailable to another person.
A good is said to be rivalrous or in a rival state if its consumption by any particular consumer will prevent simultaneous consumption by many other consumers, or if the primary consumption by one person makes a reduction in the ability of another party for consuming it.
Most tangible goods are considered as both durable as well as non-durable ones and are called rival goods. When we take the case of the hammer, it is considered as a durable type of rival good. The use of the hammer by one person presents a specific barrier to others who desire to use at the same time that particular hammer. Generally, the first user does not want to "use up" the hammer, which means that some rival types of goods can also still be shared according to time.
In economics, a particular good is once said to be a rival one if its consumption by any one consumer makes prevention in simultaneous consumption which is done by other consumers or it is considered as if consumption by one party makes a reduction in the ability of another party for the consuming purpose. A good is said to be non-rivalrous if, for any special level of production, the cost of providing it to an additional individual will be zero. A good is in an "inclusive" state if each person can benefit more from it when other people start to consume it.
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5. Summarize the importance of identifying weaknesses
and motivation for attacks early in the development or
implementation process in ecommerce
Answers
Customers and organisations can benefit from a safer and more secure ecommerce environment via early detection of holes and attack motivation.
Cyber-attacks must be avoided by spotting vulnerabilities and attack motive early on in the development or implementation phase in e-commerce. It enables the development of strong security controls to guard against the intrusion of sensitive data, preventing data breaches, monetary losses, and reputational damage. Additionally, it enables companies to anticipate threats before they materialise and to act rapidly to reduce risks. Businesses can protect themselves from potential risks by implementing steps like two-factor authentication and regular backups by understanding the motive behind attacks.
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What kind of promotional activity is a gala dinner in support of cancer patients? A. advertising B. group sales C. personal selling D. public relations E. sales promotion
Answers
The kind of promotional activity used when a gala dinner is used to support the cancer patients is known as public relations. The Option D is correct.
What is public relations as promotional activity?Basically, a promotional activities refers to those techniques that marketing teams use to increase an awareness of their brand, products and services. This helps company to attract new customers, retain current customers and increase their company's revenue.
A public relations, as part of these activities include dialog as we must listen to the others, to see things through their perspective. This is made with the purpose to be useful for every organization, not for the sensational promotion of its achievements, but to become more critical towards its work.
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An architect’s functions may include which of the following? (SELECT ALL THAT APPLY.)
-planning and designing houses, commercial buildings, and other structures
-ensuring worksite safety
-collaborating with engineers
-acting as a construction manager and supervising contractors
Answers
Answer:
the answer is planning, ensuring, and acting
What is globalization?
Answers
Allie is single, has an adjusted gross income of $25,005 and one exemption of $12400.
Answers
The amount subtracted from Allie's taxable income is the amount of tax due.
The tax due from Allie is $1427.
How do you calculate the tax?
The parameters are as follows:
$25,005 = adjusted gross income.
$12400 = exemption.
Determine the taxable income first using
Adjusted gross income - exemptions = taxable income.
We thus have:
$25,005 - $12400 is the taxable income.
Analyze the variations
$12605 is the taxable income
The question is unfinished.
Therefore, I'll refer to the 2016 breakdown of single taxable income tax brackets and rates.
Using the table, the tax due on $12605 in income is as follows:
(Amount - $9275) Tax = $927.50 + 15%
We thus have:
Tax = $927.50 + 15% * ($12605 - $9275)
Evaluate
Tax = $1427
As a result, Allie's tax is $1427.
The given question is incomplete. Below mentioned is the complete question.
"Allie is single, has an adjusted gross income of $25,005 and one exemption of $12400. How much is his tax according to the table? Hint: find taxable income first. $1246 $1263 $1318 $1324 "
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1. If you know that Diane holds the highlighted position in the organizational chart shown here, she is probably a ____ (first-line, top, administrative, middle) manager. A job title associated with that level of management is ________ (plant manager, staff accountant, chief executive officer, coordinator)
2. [CHECK ALL THAT APPLY]
Which of the following activities is most likely part of a typical workday for Diane?
A) Teaching a new employee how to use the company’s workflow management system
B) Reviewing departmental performance to determine whether managers are meeting their goals
C). Assisting customers with general questions about the company’s products
D). Monitoring long-term business trends that may have an impact on the organization
PLS HELPPPPPPPPPPPPP
Answers
1) If you know that Diane holds the highlighted position in the organizational chart shown here, she is probably a middle manager. A job title associated with that level of management is plant manager.
2) The activities that is most likely part of a typical workday for Diane is "Teaching a new employee how to use the company’s workflow management system" (Option A)
What is an Organizational Chart?An organizational chart, also known as an organigram, organogram, or organizational breakdown structure, is a diagram that depicts an organization's structure as well as the relationships and relative rankings of its parts and positions/jobs.
Org charts illustrate the structure of an organization and may clearly highlight seniority and lines of authority that should be followed. It can also indicate which roles are in charge of specific duties, divisions, departments, or areas. This can help to eliminate uncertainty and increase communication.
Note that Middle management is the intermediate management level of a hierarchical organization that reports to executive management and is responsible for 'team leading' and/or'specialist' line managers.
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Aiden has not received the foot spa that he paid for months ago. When thinking about his rights as a consumer, Aiden is most likely concerned about _____.
A.
purchase satisfaction

B.
unfair business practices

C.
credit card protection

D.
product safety
Answers
Aiden exists most likely concerned regarding credit card protection.
What is credit card payment protection?Credit card payment protection exists as an optional insurance program that permits you to set your card's lowest payments and fees on storage following specific life circumstances. Payment protection may enable your credit card account to stay in a good place - even when something incredible happens. The (truth) in lending act, is even comprehended as the consumer credit protection act. Therefore, the correct answer is option C. credit card protection
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Kasravi co. Had net income for 2013 of shs 400,000.The average number of shares outstanding for the period was 200,000 shares
Answers
Answer:
$1.98
Explanation:
Calculation for should Kasravi Co. report for diluted earnings per share for the year ended 2013
First step is to calculate the Proceeds amount
Proceeds = 12000 × $30
Proceeds = $36,000
Second step is to calculate the Shares assumed purchased
Shares assumed purchased= ($36,000 ÷ $36)
Shares assumed purchased = 10000 shares.
Third step is to calculate the Incremental share issued
Incremental share issued (12000 - 10000)
Incremental share issued = 2000 shares
Now let calculate the diluted earnings per share for the year ended 2013 using this formula
Diluted earnings per share = (Net income ÷ Average Weighted shares + incremental share issued))
Let plug in the formula
Diluted earnings per share = ($400,000 ÷ (200,000 shares +2000 shares))
Diluted earnings per share= $400,000 ÷ 202,000 shares
Diluted earnings per share= $1.98
Therefore The amount that Kasravi Co. Should report for diluted earnings per share for the year ended 2013 is $1.98
If you’re good at mechanical or athletic jobs, part of your personality is likely ___________.
• investigation
• realistic
• artistic
• social
Answers
Answer:
I think artistic I could be wrong so really sorry if I am
These personality types are confident when using their body to relate to the physical world. Mechanical and athletic abilities are a strong suit and they are usually strong and well-coordinated.
A model that shows the trade-offs and opportunity costs of producing an additional unit of a good relative to what must be given up in the production of another good.
Answers
Answer:
production possibilities curve (PPC)
Explanation:
The PPC is used to explain the tradeoffs that producers face when having to choose between 2 different alternative products or services. The more they choose of one product, the less they will be able to produce of the other product. Opportunity costs are the associated costs or benefits lost resulting from choosing one activity or investment over another alternative.
One point charge has a magnitude of 5.4 x 10-7 C. A second charge that is 0.25 m away has a magnitude of 1.1 x 10-17 C. What is the electric force magnitude of one charge on the other?
Answers
The electric force magnitude between the two charges is 2.574 x 10^(-19) N.
To calculate the electric force magnitude between two charges, we can use Coulomb's Law:
Electric Force = (k * |q1| * |q2|) / r^2
where k is the electrostatic constant (k = 9 x 10^9 N m^2/C^2), |q1| and |q2| are the magnitudes of the charges, and r is the distance between the charges.
Plugging these values into the formula:
Electric Force = (9 x 10^9 N m^2/C^2 * 5.4 x 10^(-7) C * 1.1 x 10^(-17) C) / (0.25 m)^2
Calculating this expression:
Electric Force = 2.574 x 10^(-19) N
Therefore, the electric force magnitude between the two charges is 2.574 x 10^(-19) N.
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why irs warns millions across us to hold off on filing taxes
Answers
Millions of people in more than 20 states, including California, Colorado, and Florida, who got tax refunds the previous year are being urged by the IRS to postpone filing their taxes.
Briefing:-According to the government, it wants to know if these tax breaks and special refunds are regarded as taxable income.
Can a firm be closed down by the IRS?If you owe taxes and are unable to pay them, the IRS may shut down your company. The IRS has the right to take legal action to enforce a lien. The business might be forced to close its doors and all of its assets might be taken.
What causes a business audit by the IRS?An IRS audit may result from excessive spending or significantly different expenses from one year to the next. Even though you could have a company credit card, you shouldn't make a lot of purchases. For instance, it may be suspicious to claim all of your meals throughout the working day as business costs.
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On march 1 the price of gold is $1,000 and the december futures price is $1,015. on november 1 the price of gold is $980 and the december futures price is $981. a gold producer entered into a december futures contracts on march 1 to hedge the sale of gold on november 1. it closed out its position on november 1. after taking account of the cost of hedging, what is the effective price received by the company for the gold? is this a perfect hedge? please explain why or why not.
Answers
The effective price received by the company for the gold would be $992.50. This is calculated as:
$980 (price of gold on November 1) - $15 (cost of hedging) = $965
$965 + $27.50 (difference between December futures price on March 1 and November 1) = $992.50
This is not a perfect hedge because there is still some residual risk of price movements in between March and November. Also, the cost of hedging would have to be factored in, and the actual amount of gold hedged would have to be taken into account.
Hedge is to take a position in an asset or investment that offsets another position's position and lowers its price risk. Therefore, a trade performed as a hedge serves the objective of lowering the risk of unfavourable price changes in another asset.
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A Bank with the following capital levels: common equity of 47,000, Tier 1 of 38,000, Tier 2 of 17,000. If total assets are 850,000 and risk adjusted assets are 650,000, the capital classification of the bank is
Answers
The capital classification of the bank would be "Adequately Capitalized" as its Tier 1 capital ratio.
To determine the capital classification of the bank, we need to compare its capital levels to the risk-adjusted assets. The capital classification is typically based on regulatory requirements and ratios set by the relevant financial authorities.
One common capital adequacy ratio used for classification is the Tier 1 capital ratio.
The Tier 1 capital ratio is calculated by dividing Tier 1 capital (including common equity) by risk-adjusted assets. Let's calculate the Tier 1 capital ratio:
Tier 1 capital ratio = (Tier 1 capital / Risk-adjusted assets) * 100
In this case:
Tier 1 capital = 38,000
Risk-adjusted assets = 650,000
Tier 1 capital ratio = (38,000 / 650,000) * 100
= 5.846%
Now, let's determine the capital classification based on the Tier 1 capital ratio:
Well-Capitalized: Tier 1 capital ratio ≥ 6%
Since the calculated Tier 1 capital ratio is 5.846%, it does not meet the well-capitalized threshold.
Adequately Capitalized: Tier 1 capital ratio ≥ 4%
The calculated Tier 1 capital ratio is above the adequately capitalized threshold, which is 4%.
Undercapitalized: Tier 1 capital ratio < 4%
Since the calculated Tier 1 capital ratio is above 4%, the bank is not classified as undercapitalized.
Therefore, based on the given information, the capital classification of the bank would be "Adequately Capitalized" as its Tier 1 capital ratio exceeds the minimum regulatory requirement of 4%.
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a. a single-stock futures contract on a non-dividend-paying stock with current price $130 has a maturity of 1 year. if the t-bill rate is 6%, what should the futures price be?
Answers
A single-stock futures contract on a non-dividend-paying stock with current price $130 has a maturity of 1 year. if the t-bill rate is 6%, the futures price for this single-stock futures contract should be $137.80.
In order to calculate the futures price of the single-stock futures contract on a non-dividend-paying stock with a current price of $130 and a maturity of 1 year, we need to consider the impact of the T-bill rate of 6%. The futures price is determined by adding the cost of carrying the underlying asset, in this case, the non-dividend-paying stock, to the current spot price.
The cost of carrying the stock is determined by the T-bill rate, which is the risk-free interest rate in this case. The formula for calculating the futures price is:
Futures price = Spot price x (1 + r)^T
Where r is the risk-free interest rate, T is the time to maturity, and the carrot symbol (^) denotes exponentiation.
Using this formula, we can calculate the futures price as follows:
Futures price = $130 x (1 + 0.06)^1
Futures price = $137.80
Therefore, the futures price of the single-stock futures contract on a non-dividend-paying stock with a current price of $130 and a maturity of 1 year, given a T-bill rate of 6%, should be $137.80.
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If the price level rose in three consecutive years from 100 to 120 to 140, then the annual inflation rate over those years would
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We see a continuous fall in percentage the annual inflation rate over those years would decrease.
Annual inflation rate over yearsQuestion Parameters:
if the price level rose in three consecutive years from 100 to 120 to 140,
Generally the equation for the is mathematically given as
So, annual inflation rate is
x=[(120-100)/100]*100
x= 20%
In the year 3, price level was 140, hence, the inflation rate
y= [(140-120)/120]*100
y= 16.67%.
Since, we see a continuous fall in percentage the annual inflation rate over those years would decrease.
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