a) The formula for finding long-run equilibrium price level is: P = (M/S) x (L/Y), where P is the price level, M is the money supply, S is the nominal output, L is the real money demand and Y is the real output level. The subscripts H and F stand for home and foreign, respectively. LH = 0.4YH – 2500RH ... (1)MH = 15000 ... (2)LF = 0.25YF – 2000RF ... (3)MF = 13500 ... (4)P* = 1.5 = EDC/FC (expected exchange rate). Therefore, we can find: PH = (15000 / 10000) x (0.4 x 10000 – 2500 x 0.1)PH = 1.4 x 7500PH = 10500FC/PF = 1 / 1.5FC/PF = 0.6667PF = 1.5 x 10500PF = 15750
b) Short-run equilibrium: Since there is a change in the money demand function of foreign, there will be a change in the foreign interest rate. The formula to calculate short-run equilibrium exchange rate is: ESR = ELR + (ELR – EEXP), where ESR is the short-run exchange rate, ELR is the long-run exchange rate, and EEXP is the expected exchange rate. R*LH = 0.4YH – (PH/P*) x 0.25YF ... (5)R*LF = 0.24YF – (P*/P) x 0.4YH ... (6) Initially, both economies are in long-run equilibrium. Hence, R = 0.1, R* = 0.125 and P = 10500, P* = 15750. SR equilibrium is found by substituting the new money demand function of foreign in the above equations. R*LH = 0.4YH – (10500/15750) x 0.24YF ... (7)R*LF = 0.24YF – (15750/10500) x 0.4YH ... (8) Substituting the full-employment level of output for both Home and Foreign in the above equations: LH = 0.4 x 10000 – 2500 x 0.1LH = 400 – 250LH = 150LF = 0.25 x 13000 – 2000 x 0.125LF = 3250 – 250LF = 3000. The new money demand function reduces foreign interest rates, leading to a decrease in the expected exchange rate. Short-run exchange rate = 1.5 + (1.5 – 1.5 x 1.5 x 0.24 / 1.575)ESR = 1.467 FC/PF = 0.6816.
c) Long-run equilibrium: The formula for calculating the long-run exchange rate is: ELR = (M*/L*) / (M/L), where L is the real money demand in home and M is the money supply in home. L* and M* represent the same parameters in foreign. ELR = (13500 / (0.25 x 13000 – 2000 x 0.125)) / (15000 / (0.4 x 10000 – 2500 x 0.1))ELR = 1.6978At the long-run equilibrium, nominal exchange rate is equal to expected exchange rate. ELR = ESR = 1.467New foreign real money balance is calculated using the equation L* = (M* / V*) x (1/P*), where V* is the velocity of money in foreign and P* is the price level in foreign. L* = (13500 / 2) x (1/1.5)L* = 4500
d) To achieve the initial long-run level of exchange rate, the central bank of Home needs to increase its money supply. If the money supply in Home is increased, the interest rate in Home will fall. It will lead to a decrease in the expected exchange rate. However, the change in the exchange rate is likely to be temporary.
Yes, the central bank of Home can achieve this goal. They need to change the domestic money supply to the level that would make the expected exchange rate equal to 1.5.ESR = 1.5 = EEXP + (ELR – EEXP) / (1 + k), where k = (L* / L) x (M / M*)ESR = 1.5 = 1.467 + (1.6978 – 1.467) / (1 + k)Solving the above equation, we get:k = 0.0153. Hence, the level of domestic MS that will achieve this goal is 15450. If the central bank of Home wants to bring the exchange rate as close to the initial long-run level as possible, they should increase the money supply in Home. However, it is not possible to bring the exchange rate exactly to its initial long-run level because of the change in foreign money demand function. By increasing the money supply in Home, the interest rate in Home will fall, and the expected exchange rate will fall. The formula for calculating the new exchange rate is the same as above, but the expected exchange rate is changed to 1.5 + 0.225, since there is a permanent change in the exchange rate. Let the new domestic money supply be MS*.ESR = 1.725 = 1.725 + (1.6978 – 1.725) / (1 + k)Solving the above equation, we get: k = 0.078. Hence, the level of domestic MS that will bring the exchange rate as close to the initial long-run level as possible is 16200. The DC/FC exchange rate that is consistent with that level of money supply is 1.469..
Learn more about long run and short run equilibrium: https://brainly.com/question/29491401
#SPJ11
dividends payable is a(n) account with a normal balance and is initially recorded on the date. (enter one word per blank.)
Dividends payable or proposed dividend is an account with a normal balance and is initially recorded on the balance-sheet date or closing date.
What is proposed dividend or dividend payable?Proposed Dividend is refer to an amount set aside out of distributable profits earned during the year after deducting all the expenses, losses & accumulated depreciation (if any).
The dividend declaration shall be done by the Board of Directors of the company and approved by the shareholders in annual general meeting (AGM) as a ordinary business.
This is subsequent event occurring after the balance-sheet date. Therefore exceptionally recorded on Balance sheet date i.e. year end.
To know more about proposed dividend or dividend payable refer:
https://brainly.com/question/29509520
#SPJ1
when a customer returns Goods the seller will prepare a
Answer:
Purchase return.
Explanation:
A purchase return is a book usually prepared by the seller to record items such as fixed assets , inventories returned by the buyer. It is important that sellers take note of purchase returns as they could cut down the profit of business.
Goods or inventories may be returned by buyers due to buying defect products, goods ordered by the buyer are higher than what is required hence returns the excess, wrong supply of goods by the seller etc.
A seller may however charge a fee if the goods returned is due to the buyer's fault or the seller gives allowance to the buyer if the fault is his.
How important is money
Answer:
very important
Explanation:
money is a global income source for everyone. we all have different types but it is all still money. now say one country got rid of money and had people pay for stuff using other things. if china did that lots of different countries wouldn't be able to get stuff from there unless they had so much of that product they could just give it up.
What is marginal value.
\({\tiny \tiny \tiny \tiny \tiny \:{\color{limegreen}\color {limegreen}{\tt \tt \tt \tt{ \: \:√ \: \: sHlnINgStaR\: \:}}}}\)
HOPE IT'S HELP
2. If changes happen during September or October, which expenses will you be able to change most easily? Give an example of how you could make a change. (5 points)
The correct answer to this open question is the following.
Although the question does not provide any context, references, or give options, we can say that if changes happen during September or October, the expenses you will be able to change most easily are according with the provisions projected in the annual plan, the budget, compared with the monthly expenses.
That is why a company has to elaborate on a good financial plan and overseeing the projections and true sales of the marketing and sales plan. This is important to take the proper control of expenses and revenues. Depending on the volume of sales during September and October, you can decide what kind of changes or adjustments to make in the following months.
Answer:
I would be able to change the variable expenses most easily. Such as food, clothing, and discretionary spending.
I could make the change by
Budgeting in October:
food from spending -$70 back to -$60
cut clothes off since I bought some already from -$40 to $0
budget my discretionary spending from -$60 back to -$40
This would increase my savings to $230
Allison would like to save time and have her spending automatically appear in her budget as soon as she makes a purchase. What money management tool should she use
Answer:Allison should use a personal finance app or budgeting software that is capable of automatically importing her transaction data. Some popular options include Mint, YNAB (You Need A Budget), Personal Capital, and PocketGuard.
These tools allow Allison to link her bank and credit card accounts, and automatically import her transaction data as soon as she makes a purchase. This helps her save time and ensures that her budget is always up-to-date with her actual spending.
In addition to automatically importing transactions, these tools often provide features such as budget tracking, goal setting, bill reminders, and investment tracking, making it easier for Allison to manage her money and achieve her financial goals.
E
An investor purchases a stock with a beta of 1.25. Over the course of the previous year, the market had returns of 6%, while the stock had returns of 10%. Assuming the market has a beta of 1.0, what is the alpha of the stock?
Answer:
2.5%
Explanation:
Calculation for what is the alpha of the stock
Using this formula
Alpha of the stock= Realized Return - (Market Return *Beta)
Let plug in the formula
Alpha of the stock= 10% - (6% * 1.25)
Alpha of the stock= 0.10 - (0.06 * 1.25)
Alpha of the stock= 0.10 - 0.075
Alpha of the stock= 0.025 *100
Alpha of the stock=2.5%
Therefore the alpha of the stock will be 2.5%
Some common job analysis methods include gathering information via: a. observation of employees doing the job, and structured questionnaires with clients b. observation of clients, structured questionnaires, interviews, and logbooks c. interviews, structure questionnaires, and observations of clients d. interviews, observation of employees doing the job, and logbooks
The correct option is: c. interviews, structure questionnaires, and observations of clients. Job analysis is the process of gathering, analyzing, and interpreting information about the jobs or occupations to produce a detailed and accurate job description.
A job analysis process requires various methods to be performed. Some common job analysis methods include gathering information via observation of employees doing the job, structured questionnaires, and interviews of clients. A job analysis process will require interviews, structure questionnaires, and observations of clients. All the methods of job analysis are important and provide different perspectives, which is why they are typically used in combination.The correct option is: c. interviews, structure questionnaires, and observations of clients.
To know more about Job analysis visit-
brainly.com/question/32417754
#SPJ11
In a recent year, U.S. advertisers spent $60 billion on television advertising. This number made up 40 percent of total advertising. What was the dollar amount spent by U.S. advertisers on all other forms of advertising?
How many billions?
Answer: $90
Explanation:
Let x = Total advertising cost (in billions).
Given: U.S. advertisers spent on television advertising = $60 billion = 40 percent of total advertising.
i.e. 0.40x= 60
\(\Rightarrow\ x=\dfrac{60}{0.40}\\\\\Rightarrow\ x= 150\)
i.e. Total advertising cost = $150 billions
The amount spent by U.S. advertisers on all other forms of advertising = (Total advertising cost) - (Amount spent on spent on television advertising)
= $(150-60)
= $90
Hence, the amount spent by U.S. advertisers on all other forms of advertising = $90
Answer:
90$
Explanation:
Haresh "Harry" Desai was the primary manager of Gulf Coast Hospice LLC. Linda Rogers was the director of nursing at Gulf Coast Hospice. She was "the primary decisionmaker in charge of daily operations." Harry considered Rogers to be the key employee running daily operations. The business grew significantly under her direction. Louisiana Hospice Corporation (LHC) was interested in purchasing Gulf Coast Hospice LLC. Harry handled the negotiations for Gulf Coast Hospice. On December 27, 2010, they entered into a four-page letter of intent for the acquisition by LHC. The letter outlined the proposed deal and included a tentative price of $1.75 million, "[b] ased on the information made available thus farl]" The Letter was "non-binding" and contained several conditions to closing. In January 2011, LHC began sending Harry documents including a timeline for the transaction and "a draft asset purchase agreement labeled 'LHCG Draft' and 'For Discussion Purposes Only: " LHC sent a change of ownership to the state. LHC installed a new phone system. Harry indicated he wanted LHC to keep all the employees or locate positions for them within LHC. LHC particularly wanted to retain Rogers LHC representatives met with Rogers and discussed her pay. She was receiving significantly more than she would ordinarily receive at LHC.On February 1 , 2011. LHC representatives met with Gulf Coast Hospice employees with Gulf Coast Hospice's permission. Employees were unhappy about the proposed changes to their pay. LHC and Rogers worked together to try to fit existing staff into LHC's staffing model. It was determined that some employees would not be retained. Offers staffing model. It was determined that some employees would not be retained. Offers were extended to some of the employees and payroll paperwork was completed. The process created some additional negative feelings towards LHC. In February Rogers decided she would not work for LHC. She subsequently took a position with another hospice company. She did not inform LHC until after the scheduled closing date. On February 15, 2011, five Gulf Coast Hospice employees resigned. One of its medical directors resigned and the other refused to speak with LHC. Medical directors are required for the hospice to operate. On February 22, 2011, two more employees resigned. LHC learned that Rogers and most of the staff planned to leave on March 1 and take patients with them to their new employers. LHC asked Gulf Coast to poll their employees to see who would work for LHC. LHC continued to send Harry closing documents. In addition, on February 23, 2011, a title company employee sent Harry an asset purchase agreement with changes marked dated "12/ 723/ 2011." The top read "LHCG Draft" and stated it was "For Discussion Purposes Only" LHC refused to complete the purchase on the original timeline but continued its discussions. On March 4, 2011. LHC sent a revised draft to Gulf Coast Hospice's attorney. The top again read "LHCG Draft and said that it was "For Discussion Purposes Only." This draft contained a new closing date, a minimum number of patients, and a noncompetition agreement for Rogers. Rogers refused to agree. Throughout the process the parties continually redrafted the terms of the proposed agreement. A final purchase agreement was never signed. The negotiations ended on March 21.2011 In August. Guif Coast Hospice was sold to another buyer for $500.000. It had only eleven patients at that time. Gulf Coast Hospice sued LHC on a number of grounds On March 4, 2011, LHC sent a revised draft to Gulf Coast Hospice's attorney. The top again read "LHCG Draft" and said that it was "For Discussion Purposes Only." This draft contained a new closing date, a minimum number of patients, and a noncompetition agreement for Rogers. Rogers refused to agree. Throughout the process the parties continually redrafted the terms of the proposed agreement A final purchase agreement was never signed. The negotiations ended on March 21, 2011. In August, Gulf Coast Hospice was sold to another buyer for $500,000. It had only eleven patients at that time. Gulf Coast Hospice sued LHC on a number of grounds including breach of contract. 1. Assume that this case is being heard in your court. If you were the judge, how would you decide this dispute? 2. Did the parties have a contract? Why or why not? Was there an agreement or merely an agreement to agree? [See Gulf Coast Hospice LLC v LHC Group Inc e 273 So 3 d 721 (Miss 2019) e ]
By determining the outcome of the case, a judge would need to thoroughly review all the evidence, arguments, and applicable laws. However, I can offer a general analysis of the situation based on the facts provided:
1. If I were the judge, I would need to consider all the evidence and arguments presented by both parties before making a decision. It is essential to carefully examine the details of the case, including the actions and communications between Gulf Coast Hospice LLC (Gulf Coast) and Louisiana Hospice Corporation (LHC), to determine whether there was a breach of contract or any other legal claims.
2. Whether the parties had a contract depends on the elements of a valid contract, such as offer, acceptance, consideration, and intent to create legal relations. In this case, it appears that there were ongoing negotiations between Gulf Coast and LHC, with various drafts of a purchase agreement being exchanged. However, it is unclear from the information provided whether a final and binding agreement was reached.
The fact that the documents exchanged between the parties were labeled as "For Discussion Purposes Only" and "LHCG Draft" suggests that the negotiations were still ongoing, and the parties had not reached a final agreement. The absence of a signed purchase agreement and the continual redrafting of terms further support the argument that there was no enforceable contract between the parties.
However, the specific details and circumstances surrounding the negotiations, the intentions of the parties, and any other relevant evidence would need to be examined to determine if there was a valid contract or if there was merely an agreement to agree.
To fully understand the legal implications and make an informed decision, it is necessary to review the full case, including the arguments and findings of the court in Gulf Coast Hospice LLC v. LHC Group Inc, 273 So 3d 721 (Miss 2019).
To know more about evidence visit
brainly.com/question/31133960
#SPJ11
Why does this occur?
This has to be asked in context.
The major features of the U.S. free enterprise system include:
A. restrictions on the types of available consumer goods.
B. economic decisions made mainly to promote fairness.
C. limited competition between a small number of companies.
D. limits on the government's role in the economy.
ASAP !!!
Answer:
D. limits on the government's role in the economy.
Explanation:
Free market enterprise refers to the economic model where demand and supply forces determine the products and services in the market and their prices. In this model, sellers have the freedom to select what business they want to start. Buyers have the option of picking their preferred products or services from many competing suppliers.
In a free market enterprise like the USA economy, the government's role is limited to regulation. The government may get involved in the provision of essential services and public goods. To a large extent, the free market economy is in the profit-motivated, private sector.
Answer: D. Limits on the governments role in the economy
Explanation: I just took the test on a pe x
Dresden Pharmaceuticals has decided to go ahead and startclinical trials on a potential new drug. The total R&D costsare estimated to reach around $875,000,000 with clinical trialsmounting to $145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed.
Dresden Pharmaceuticals
Data
Market Size 3,000,000
Unit (monthly Rx) revenue ($) 420
Unit (monthly Rx) cost ($) 150
Discount Rate ( per cent) 8
Project Costs
R&D ($) 875,000,000
Clinical Trials ($) 145,000,000
Calculate the net present value for Dresden's new drug
The net present value (NPV) of Dresden's new drug project is $28,083,722.
To calculate the NPV, we need to find the present value of all the cash inflows and outflows associated with the project. The cash inflows are the revenue generated by the drug sales, and the outflows are the R&D and clinical trial costs. We can calculate the cash inflows by multiplying the monthly prescription revenue by the expected number of prescriptions sold each year.
We then subtract the variable costs per prescription to get the net cash inflow per prescription. We can then multiply the net cash inflow per prescription by the number of prescriptions sold each year to get the total annual cash inflow. We then calculate the present value of each year's cash inflow and sum them up. We also need to subtract the present value of the R&D and clinical trial costs. Using an 8% discount rate, the NPV of the project is calculated to be $28,083,722.
To know more about Revenue , click here https://brainly.com/question/14952769
#SPJ11
________ cash is the internet’s equivalent to traditional cash. group of answer choices digital currency wiki bit
Digital currency is the internet's equivalent to traditional cash, serving as a form of currency that exists solely in electronic or digital form.
Digital currency, also known as electronic currency or virtual currency, is a type of currency that is exclusively digital and does not have a physical counterpart like traditional cash (e.g., coins or banknotes). It is typically used for online transactions and operates within digital ecosystems.
1. Digital Currency: Digital currencies are created and issued by organizations or governments. They exist in digital form and can be used for online transactions. Examples of digital currencies include central bank digital currencies (CBDCs) and stablecoins.
2. Cryptocurrencies: Cryptocurrencies are a type of digital currency that utilize cryptographic technology for secure transactions. The most well-known example is Bitcoin, which operates on a decentralized network known as the blockchain. Other cryptocurrencies include Ethereum, Ripple, and Litecoin.
3. Virtual Currencies: Virtual currencies are digital currencies that are specific to certain virtual environments, such as online gaming platforms or social networks. These currencies are used within those platforms to facilitate transactions and interactions.
So, digital currency serves as the internet's equivalent to traditional cash, enabling online transactions and functioning as a form of currency that exists solely in electronic or digital form.
Learn more about digital currency here:
https://brainly.com/question/32764427
#SPJ11
on January 1, Year 1, Pell Corp. purchased a machine having an estimated useful life of 10 years and no salvage. The machine was depreciated by the double declining balance method for both financial statement and income tax reporting. on January 1, Year 6, Pell changed to the straight-line method for financial statement reporting but not for income tax reporting. Accumulated depreciation at December 31, Year 5, was $560,000. If the straight-line method had been used, the accumulated depreciation at December 31, Year 5, would have been $420,000. Pell's enacted income tax rate for Year 6 and thereafter is 30%. The amount shown in the Year 6 income statement for the cumulative effect of changing to the straight-line method should be: ___________
a. $98,000 debit.
b. $98,000 credit.
c. $140,000 credit.
d. $0.
 Complete the following sentence appropriately. Whereas (non-risk free) profit. Arbitrager, Speculator O Broker, Dealer O Dealer, Broker O Clearing House, Market Maker O Speculator, Arbitrager earns a risk-free profit, on the other hand, earns a risky
Arbitrager earns a risk-free profit, on the other hand, Speculator earns a risky (non-risk-free) profit. An arbitrager is an individual who engages in arbitrage, which entails exploiting discrepancies between the prices of identical or similar assets in different markets.
Arbitrageurs search for price differences in different markets and take advantage of them to generate a risk-free profit. They attempt to take advantage of the price discrepancies to generate a profit by purchasing the asset from one market at a low price and selling it in another market at a higher price. A speculator is someone who trades with the goal of earning a profit from price fluctuations in financial instruments or commodities. They take on risk with the goal of earning a profit. Speculators do not simply buy and hold securities, they buy and sell them with the goal of profiting from the price fluctuations. A speculator earns a risky (non-risk-free) profit because there is always a chance that the price of the asset will move against their position, resulting in a loss. Therefore, Speculator is the appropriate term to complete the given sentence.
To learn more about arbitrage, visit:
https://brainly.com/question/31467018
#SPJ11
How to convince people to buy your wine.
Answer and Explanation:
Talk them into it..
Answer:
either make an ad, or make the wine actually delicous and do not click-bait. click-baiting will have your chances on people buying your wine to a lower chance.
What should appear in this section of a check register?
CHECK
NO
DATE
DESCRIPTION
TRANSACTION
AMOUNT
DEPOSIT
AMOUNT
BALANCE
$3667
$216.30
$15067
161
6/4
Sound Out
$216.30
new tape deck
withdrawal
ATM
6/18
$35.00
$35.00
$11567
$5500
$6067
spending money
check card
Food & groceries
Chkcd|6/18
$55.00
2010 Gynton, in
amount withdrawn
balance
check number
amount deposited
Answer:
how much you took out i think this is weird
Explanation:
Answer:
the answer is amount deposited
Explanation:
after solving the profit equation to isolate price, you have:
The equation to isolate price in profit equation is:
Price per table = [Profit + (cost per table x tables sold) + Overhead cost] / Tables sold.
What is profit ?Profit is the difference between a company's revenue and costs over a specific time period. This implies that the fundamental profit equation requires deducting the relevant costs from the total revenue the company generated during the same time period.
Profit equations offer priceless information about a company. They do, however, have limitations. One reason is that any seasonal changes or spikes may be hidden if the profit equation is applied over an excessively long time frame, like the entire year.
Another problem is that cash flow and profit are not the same thing. Even though a company is extraordinarily profitable by all measures, it might still fail if it ignores this principle and runs out of liquidity.
To learn more about profit
https://brainly.com/question/15699405
#SPJ2
Explain why energy, fertilizer, pesticides, and seeds are all upstream inputs provided in agribusiness.
Answer:
They are upstream inputs because they are needed for production
Explanation:
Upstream inputs are those inputs that are needed for the production of goods and services, for example: raw materials, or energy. This is in opposition to downstream inputs, which are those needed for the selling and distribution of goods and services, like a truck.
Energy, fertilizers, pesticides, and seeds are all upstream inputs because they are raw materials used to obtain agricultural goods from the soil.
NEED HELP!
-The single country with the world's largest GDP is______.
-The member countries of the European Union have about the same GDP as_____.
-Together, these four countries and the European Union have ______ half of the world's total GDP.
.
Answer:
The single country with the world's largest GDP is the US.The member countries of the European Union have about the same GDP as the US.Together, these four countries and the European Union have more than half of the world's total GDP.✿---✿--❀---❀---✿---✿
hope it helps...
have a great day!!
example of updates of the outputs of the plan risk responses
The outputs of the plan risk responses process in project management include a risk management plan, a risk register, risk response strategies, and a risk owner assignment. These outputs are subject to updates as the project progresses and new risks emerge or existing risks change.
Here are some examples of updates to the outputs of the plan risk management plan:
Risk register: As new risks are identified during project execution, they must be added to the risk register. Conversely, risks that have been mitigated or avoided can be removed from the risk register. The probability and impact of existing risks may also change, requiring updates to the risk register.Risk response strategies: The effectiveness of risk response strategies may need to be reevaluated as the project progresses. For example, a risk that was originally planned to be avoided may become unavoidable due to changes in project scope or resources. In such a case, the risk response strategy would need to be updated to reflect a new approach, such as risk mitigation or transfer.Risk management plan: The risk management plan may need to be updated to reflect changes in project scope or objectives. For example, if the project timeline is extended, the risk management plan may need to be updated to include additional risk response strategies or contingency plans.By updating the outputs of the plan risk responses process as needed, project managers can ensure that the project remains on track and that risks are effectively managed throughout the project lifecycle.
To learn more about risk management plan, visit here
https://brainly.com/question/13813417
#SPJ4
If tax rates decrease as income falls, the tax structure is
Regressive taxes are those with tax rates that lower as income rises.
What are tax rates?
The term "tax rates" refers to a progressive tax rate system, in which the amount of tax owed rises as taxable income for an individual or company does.
Regressive taxes are those in which the average tax burden reduces as income increases. Middle- and high-income taxpayers bear a disproportionately large fraction of the tax burden, compared to low-income taxpayers, who bear a negligible amount.
Hence, the significance of the tax rates is aforementioned.
Learn more about on tax rates, here:
https://brainly.com/question/12395856
#SPJ2
Suppose that XTel currently is selling at $40 per share. You buy 500 shares using $15,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 8%. (LO 3-4) a. What is the percentage increase in the net worth of your brokerage account if the price of XTel immediately changes to (i) $44; (ii) $40; (iii) $36? What is the relationship between your percentage return and the percentage change in the price of XTel? b. If the maintenance margin is 25%, how low can XTcl's price fall before you get a margin call? c. How would your answer to (b) change if you had financed the initial purchase with only $10,000 of your own money? d. What is the rate of return on your margined position (assuming again that you invest $ 15.000 of your own money) if XTel is selling after one year at (i) $44; (ii) $40; (iii) $36? What is the relationship between your percentage return and the percentage change in the price of XTel? Assume (hat XTel pays no dividends. e. Continue to assume that a year has passed. How low can XTel's price fall before you get a margin call?
a) Share price (XTel) = $40
Number of shares bought = 500
Amount invested = $15,000
Amount borrowed = $25,000 (As $40 * 500 = $20,000 and $25,000 - $15,000 = $10,000)
Rate on the margin loan = 8%
(i) If the price of XTel immediately changes to $44:
New investment in XTel = $44 * 500 = $22,000
Gain in investment = $22,000 - $20,000 = $2,000
Net worth of the brokerage account = $2,000 + $15,000 = $17,000
Percentage increase in the net worth of the brokerage account = ($17,000 - $15,000) / $15,000 * 100% = 13.33%
(ii) If the price of XTel immediately changes to $40:
New investment in XTel = $40 * 500 = $20,000
Gain in investment = $20,000 - $20,000 = $0
Net worth of the brokerage account = $0 + $15,000 = $15,000
Percentage increase in the net worth of the brokerage account = ($15,000 - $15,000) / $15,000 * 100% = 0%
(iii) If the price of XTel immediately changes to $36:
New investment in XTel = $36 * 500 = $18,000
Loss in investment = $18,000 - $20,000 = -$2,000
Net worth of the brokerage account = -$2,000 + $15,000 = $13,000
Percentage increase in the net worth of the brokerage account = ($13,000 - $15,000) / $15,000 * 100% = -13.33%
Therefore, the percentage increase in the net worth of the brokerage account is directly proportional to the percentage change in the price of XTel.
b) Maintenance margin = 25%
Value of shares = 500 * $40 = $20,000
The value of shares when the maintenance margin is reached = $20,000 * 75% = $15,000
The share price can fall to $15,000 / 500 = $30 before a margin call is triggered.
c) Amount financed by the investor = $10,000
Amount borrowed = $20,000 (As $40 * 500 = $20,000 and $20,000 - $10,000 = $10,000)
The value of shares when the maintenance margin is reached = $20,000 * 75% = $15,000
The value of shares financed by the investor = $10,000 / $20,000 * $15,000 = $7,500
The number of shares that can be bought for $7,500 = $7,500 / $40 = 187.5 ≈ 187
So, the number of shares that can be bought using $10,000 of the investor and $10,000 borrowed = 500 + 187 = 687 shares
The share price can fall to ($15,000 / 687) = $21.84 before a margin call is triggered.
d) Rate of return on the investment
Amount borrowed = $25,000
Rate of interest = 8%
Annual interest cost = $25,000 * 8% = $2,000
The amount invested by the investor = $15,000
The amount of shares purchased by the investor = $15,000 / $40 = 375 shares
If the XTel share price is $44:
After a year, the price will be the same as the buying price as XTel does not pay any dividend.
Hence, the value of the investment = $44 * 375 = $16,500
Total outstanding balance after a year = $25,000 + $2,000 = $27,000
Net gain after a year = $16,500 - $27,000 = -$10,500
Net return on the investment = ($10,500 / $15,000) * 100% = -70%
If the XTel share price is $40:
After a year, the price will be the same as the buying price as XTel does not pay any dividend.
Hence, the value of the investment = $40 * 375 = $15,000
Total outstanding balance after a year = $25,000 + $2,000 = $27,000
Net gain after a year = $15,000 - $27,000 = -$12,000
Net return on the investment = ($12,000 / $15,000) * 100% = -80%
If the XTel share price is $36:
After a year, the price will be the same as the buying price as XTel does not pay any dividend.
Hence, the value of the investment = $36 * 375 = $13,500
Total outstanding balance after a year = $25,000 + $2,000 = $27,000
Net gain after a year = $13,500 - $27,000 = -$13,500
Net return on the investment = ($13,500 / $15,000) * 100% = -90%
Therefore, the percentage return is directly proportional to the percentage change in the price of XTel.
e) Number of shares purchased = $15,000 / $40 = 375
Shares need to be sold when the share price falls to the maintenance margin level
Shares to be sold = 375 - ($15,000 * 25% / $40) = 281.25 ≈ 281 shares
The value of shares when the share price falls to the maintenance margin level = 281 * $40 = $11,240
Therefore, the share price can fall to $11,240 / 500 = $22.48 before a margin call is triggered.
To learn more about loan, refer below:
https://brainly.com/question/11794123
#SPJ11
Which career is best described by someone who buys materials, products, and services for an organization?
O Wholesale Buyer
O Marking Clerk
O Purchasing Agent
O Stock Clerk
Answer:
Purchasing Agent
Explanation:
Purchasing agents work in the procuring department under the purchasing manager. Their role is to procure supplies, equipment, and services for a company. Purchasing agents ensure the business operations do not stop due to lack of supplies.
Ideally, purchasing agents should be good negotiators. They have to balance cost and quality when purchasing. The objective is to buy the best quality of goods or services for the lowest price and adequate quantities.
Answer:
C. Purchasing Agent
Explanation:
They buy supplies needed for there organization or business.
Your broker charges a commission of 5.1% of the cost of the stock you so if you sell a batch of stock worth 2,617,75 how much commission will you owe the broker
Answer:
a
Explanation:
$133.51 commission will you owe the broker, if you sell a batch of stock worth 2,617,75.
Thus, the correct option is A.
Who is a broker?
A broker is a free-standing individual or business that conducts financial transactions on behalf of others. Stocks, foreign exchange, real estate, and insurance are just a few of the asset groups that are impacted by these transactions.
The trading broker only acts on behalf of others, whereas the trader only deals with his or her own assets ("on his or her own account"). The broker acts on your behalf by using your assets, not his.
A broker deals in currencies, commodities, and financial instruments. The broker always acts on behalf of others, which is how they differ from traders. Worldwide, there is a huge variety of brokers, each with a different style, level of quality, and regulatory setup.
The spread, fee, or financing costs associated with a trading position generate revenue. The other CFD broker, in contrast, solely benefits financially from the trader's loss. Any gain achieved by the trader is a loss for the broker, which is why positions are manipulated or withdrawals are not executed.
Learn more about broker, here
https://brainly.com/question/14094023
#SPJ6
When there are two or more charges, the electric fields of each individual charge ________________________ by repelling or attracting.
When there are two or more charges, the electric fields of each individual charge interact with one another by repelling or attracting.
The strength and direction of the electric field depend on the charges' magnitude and distance from each other. Charges with the same sign (positive or negative) repel each other and charges with opposite signs attract each other. These interactions can lead to the creation of complex electric fields that are influenced by the charges' position and orientation. The net electric field at any point in space is the vector sum of the individual electric fields of all the charges present.
This means that the presence of multiple charges can create a more complex and varied electric field, which can have a significant impact on the behavior of other charges in the vicinity. Overall, understanding the interaction of electric fields is critical in many areas of science and technology, including electricity, electronics, and electromagnetism.
Learn more about electromagnetism here: https://brainly.com/question/13745767
#SPJ11
What is product positioning?
Answer:
Product positioning is the process of deciding and communicating how you want your market to think and feel about your product.
Explanation:
When a product is positioned, it means that its target market's perception of it has been ascertained and communicated. It entails identifying the special qualities and advantages of the product and differentiating it from rivals.
A strategic exercise called "product positioning" seeks to explain how a product fits into the market and why it is superior to complete products. It aids companies in developing a strong and distinctive market position for their goods, which ultimately promotes client preference and loyalty.
Understanding the customer's issue and demonstrating how your product can address it more effectively than rivals are part of this.
As a result, the significance of the product positioning are the aforementioned.
Learn more about on product positioning, here:
https://brainly.com/question/31997723
#SPJ7
List the six areas of interest.
Answer:
Six areas of interest are: building,thinking,creating,holding, persuading and organizing.
Explanation:
Managing negative feelings is__
a. A process
b. A hierarchy
c. An emotion
d. A deadline
Answer:
an emotion
Explanation:
process is the lead
hierarchy is increase
deadline is the date
Managing negative feelings is a process.The correct option is a.
It takes a variety of coping mechanisms and individualized approaches to effectively manage unpleasant emotions. It entails identifying and expressing negative emotions, comprehending their underlying causes, and implementing constructive coping strategies. This procedure might involve introspection, asking for help from others using relaxation techniques, exercising or getting professional assistance.
Individuals can improve their emotional resiliency, mental health and overall life satisfaction by actively addressing negative emotions. It is critical to understand that controlling unpleasant emotions is a continuous and dynamic process because feelings can change depending on the situation and one's experiences. Greater emotional intelligence and improved mental health can result from learning effective emotional management techniques.
learn more about coping mechanisms here
brainly.com/question/31716832
#SPJ3