The moral hazards caused by the weak regulation of Freddie Mac and Fannie Mae were that there was an implied government guarantee without any restriction on risk-taking, option d.
Freddie Mac (Federal Home Loan Mortgage Corporation) and Fannie Mae (Federal National Mortgage Association) are government-sponsored enterprises (GSEs) that play a significant role in the United States mortgage market. While they are technically private companies, they have historically operated with an implied government guarantee, meaning that the government would step in to bail them out if they faced financial distress.
This implied government guarantee created moral hazards because it encouraged risk-taking behavior by Freddie Mac and Fannie Mae. Since the government was seen as a backstop, there was less incentive for these institutions to be cautious in their lending practices. They had the ability to take on higher levels of risk, which ultimately contributed to the 2008 financial crisis.
Additionally, the regulation of Freddie Mac and Fannie Mae was considered weak during the period leading up to the financial crisis. The oversight of these institutions primarily fell under the Office of Federal Housing Enterprise Oversight (OFHEO), which was criticized for its limited resources and inadequate regulatory framework. The Securities and Exchange Commission (SEC) did not take over the regulation of Freddie Mac and Fannie Mae.
Therefore, the correct option is d. There was an implied government guarantee without any restriction on risk-taking.
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Over the past 5 year period of time, the cash dividend payment for American Container has grown from $3.15 per share to $5.55 per share. If you want to value American Container stock using the constant growth model, and want to assume that future growth of dividends will be equivalent to this recent historical growth. you will use a growth rate assumption that is closest to 10% Jy 12% 8% 6%
The growth rate assumption that is closest to the historical growth rate of American Container stock for valuing the stock using the constant growth model is 10%
According to the constant growth model, the stock value (P0) can be calculated as follows:
P0 = D1 / (k - g)
Where,D1 = the expected dividend per share one year from now
k = the required rate of return
g = the growth rate of dividends
Since the question mentions that the historical growth rate of American Container stock over the past 5 years is 5.55/3.15 = 1.76 or 76%, the growth rate assumption should be made based on this information.
However, the question provides answer choices in terms of whole numbers, so we need to approximate the growth rate to the nearest whole number.To do this, we can use the Rule of 72, which states that the time it takes for an investment to double is equal to 72 divided by the annual rate of return.
In this case, if we assume that the growth rate is 76%, we can calculate the number of years it would take for the dividend to double as follows:72 / 76 = 0.95 years
This means that the dividend is expected to double in less than a year, which is not realistic. Therefore, we need to lower the growth rate assumption to a more reasonable level.
Using the Rule of 72 again, if we assume a growth rate of 10%, the number of years it would take for the dividend to double is:72 / 10 = 7.2 years
This is a more reasonable assumption, and is therefore the closest answer choice to the historical growth rate of American Container stock.
Thus, the growth rate assumption that is closest to the historical growth rate of American Container stock for valuing the stock using the constant growth model is 10%.
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IV. (27%) Linton Ltd. purchased 70 Horner AG 9%, 10-year, €1,000 bonds on January 1, 2022, for €70,000. The bonds pay interest annually on January 1. The market value of the bonds was € 70,525 a
To record the transactions described above, including closing entries, the following journal entries need to be made:
How to write the Journal entry1. January 1, 2022: Purchase of 70 Horner AG bonds
Bonds Payable 70,000
Cash 70,000
(To record the purchase of 70 Horner AG bonds for €70,000)
2. December 31, 2022: Adjusting entry for bond valuation
Bond Valuation Adjustment 525
Unrealized Gain on Investments 525
(To adjust the bond valuation to market value of €70,525 at the end of 2022)
3. January 1, 2023: Receipt of interest
Cash 6,300
Interest Revenue 6,300
(To record the receipt of interest of 70 bonds at a rate of 9% annually)
4. January 1, 2023: Sale of all bonds
Cash 71,000
Bonds Payable 70,000
Gain on Sale of Bonds 1,000
(To record the sale of all bonds for €71,000, realizing a gain of €1,000)
Closing entries:
5. December 31, 2022: Closing the Interest Revenue account
Interest Revenue X
Income Summary X
(To close the Interest Revenue account by transferring the balance to the Income Summary account)
6. December 31, 2022: Closing the Unrealized Gain on Investments account
Unrealized Gain on Investments X
Income Summary X
(To close the Unrealized Gain on Investments account by transferring the balance to the Income Summary account)
7. December 31, 2022: Closing the Income Summary account
Income Summary X
Retained Earnings X
(To close the Income Summary account by transferring the net income to Retained Earnings)
Note: The "X" represents the amount to be recorded, which depends on the balances in the respective accounts.
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question
Linton Ltd. purchased 70 Horner AG 9%, 10-year, €1,000 bonds on January 1, 2022, for €70,000. The bonds pay interest annually on January 1. The market value of the bonds was € 70,525 at the end of 2022. On January 1, 2023, after receipt of interest, Linton sold all of the bonds for €71,000.
Instructions
Prepare the journal entries to record the transactions described above, including closing entries. Assuming: Linton’s business model is to hold these bonds to collect contractual cash flows and sell.
With all that is going on now between the U.S. and other
countries, how do you view the future on International Business for
the U.S.?
The future of international business in the United States will depend on several factors such as its demand, political situation, accurate policies, and its society's adaptability to these changes in the economy.
Basically, international business involves trade between two or more countries, being the United States is one of the world's largest economies.
International trade has played an essential role in the United States' economy since its formation. After World War II, the United States became the world's dominant economy. This dominance was in large part due to the country's ability to produce goods on a large scale and its trade relationships with other countries.
International trade provided access to new markets and expanded opportunities for american businesses.In recent years, trade tensions between the United States and other countries have increased, and there have been several disputes about tariffs and other trade barriers.
The U.S. has pursued policies to promote its trade interests and protect american businesses, which has led to tensions with other countries that do not share the same interests.
The future of international business for the U.S. :The future of international business for the U.S. will depend on how the country adapts to these changes in the global economy. For example, as other countries become more competitive, the U.S. may need to focus on developing new products and services to remain competitive in international markets.
Additionally, the U.S. may need to work with other countries to develop more accurate policies that promote international trade and support economic growth. International business can play a significant role in society by creating new job opportunities, driving innovation, and promoting economic growth.
The U.S. needs to recognize the importance of international business and work towards creating policies that support it. By doing so, the U.S. can help to ensure that it remains a significant player in the global economy and that its businesses continue to grow and thrive.
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What does 'horse' stand for in Sonny's blues?
(I was sure that the first time Sonny had ever had horse, he
couldn't have been much older than these boys were now.)
In "Sonny's Blues," the term "horse" refers to heroin, a highly addictive opioid drug. The story's protagonist, a schoolteacher in Harlem, is worried about his younger brother Sonny's drug addiction.
When he finds out that Sonny has been using heroin, the narrator reflects on how prevalent drug addiction is in their community and how it can be hard to break free from it. The narrator recalls a friend of his who was a "horse" addict and how he was eventually sent to a rehabilitation center to overcome his addiction.
The term "horse" is used throughout the story as a metaphor for the destructive power of addiction and the struggle to break free from its grip. Overall, "Sonny's Blues" is a powerful exploration of the human experience and the challenges that people face in overcoming adversity and finding their place in the world. Through its vivid characters and poignant themes, the story offers a powerful meditation on the nature of addiction and the power of human resilience and hope.
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Which of the following activity is typically involved in the approach step of the selling process? gaining the buyer's agreement to move into the need assessment stage trial closes offering some price value comparisons of alternative solutions identifying leads Oclarifying, responding, confirming
The selling process consists of a few steps that are to be followed so as to make the sales process successful. The approach step is one of the steps involved in the selling process. The activity typically involved in the approach step of the selling process is “clarifying, responding, and confirming.
The approach stage involves the salesperson making the first contact with the potential buyer. This is the point at which the salesperson must establish credibility and a rapport with the customer. Afterward, the salesperson must transition to the need assessment stage of the sales process.Clarifying, responding, and confirming are typically involved in the approach step of the selling process. It is the act of rephrasing the customer's query in order to better understand the question, responding to the customer's query, and verifying that the client is satisfied with the answer provided by the salesperson.Training should include the use of effective questioning methods and active listening skills to guarantee that this phase is successful. The approach step of the selling process is critical since the client's first impressions are frequently formed at this time, and this will influence their purchasing decision.
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My Brand of Coffee or Tim Hortons?
Discussion Question: If you wanted to start
your own coffee shop, will you go
withcreating your own brand or will you
rather go for an already known
franchise (say Tim Hortons)? Briefly discuss
why.
If I wanted to start my own coffee shop, I would choose to create my own brand rather than go for an already-known franchise like Tim Hortons.
Starting my own brand allows me to have complete creative control over the concept, branding, and menu of the coffee shop. I can develop a unique identity and differentiate myself from other coffee shops in the market. This gives me the freedom to experiment with different flavors, brewing techniques, and overall customer experience, which can be a major draw for coffee enthusiasts seeking something new and innovative. Additionally, building my own brand allows me to establish a direct connection with my customers and build a loyal following based on the quality and distinctiveness of my coffee.
Choosing an established franchise like Tim Hortons has its advantages, such as brand recognition and an established customer base. However, it also comes with limitations and restrictions in terms of menu offerings, branding guidelines, and operational procedures. While this can provide a sense of security and a proven business model, it may limit my ability to customize and adapt to the specific preferences and needs of my target market. Moreover, starting my own brand allows me to be more agile, responsive to market trends, and flexible in making changes as the business evolves. Ultimately, by creating my own brand, I can build a coffee shop that truly reflects my vision and passion for coffee, offering a unique experience to my customers.
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Southern Comfort company reports net income of $100. During the year the company purchased $20 of inventory. The company also reported depreciation expense of $30, and cost of goods sold of $20. What was cash from operations?
Cash from operations for Southern Comfort companyGiven data,Net income = $100Purchased inventory = $20Depreciation expense = $30Cost of goods sold = $20Calculation of cash from operations:Net cash flow = Net income + Depreciation expenseNet cash flow = $100 + $30Net cash flow = $130Cash from operations = Net cash flow - Changes in inventoryCash from operations = $130 - $20Cash from operations = $110Therefore, Cash from operations for Southern Comfort company is $110.
Cash from operations for Southern Comfort companyGiven data,Net income = $100Purchased inventory = $20Depreciation expense = $30Cost of goods sold = $20Calculation of cash from operations:Net cash flow = Net income + Depreciation expenseNet cash flow = $100 + $30Net cash flow = $130Cash from operations = Net cash flow - Changes in inventoryCash from operations = $130 - $20Cash from operations = $110Therefore, Cash from operations for Southern Comfort company is $110.Note: Changes in inventory is ignored because the company only purchased $20 of inventory but there is no information about the amount of inventory sold or used in the production of goods.
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Do you have any suggestions for the trip? If you are going to invite anyone, please tell me so that I can book rooms for them. Well, I have to stop now because I have to go to the Travel Agency to do the booking. I also have to go shopping to buy stuff for the trip. Please write back soon and let me know. I'm looking forward to spending this trip with you. Lots of love. Fadel - The 'Body:
The author is writing a letter to someone to inform about his upcoming trip. He needs suggestions for the trip, and he also has to book rooms for his friends. He is looking forward to spending the trip with his friend.
Suggestions for the trip can be many, depending on the location, the purpose of the trip, and the number of people going. The author can suggest visiting famous landmarks, trying new food, taking a scenic drive, etc. They can also indulge in fun activities like hiking, boating, or exploring the local culture. To book rooms for his friends, the author must inform the travel agency about the number of people, the dates, and the budget. Shopping for the trip can include buying necessary items like clothes, toiletries, and gadgets. The author can also buy gifts for the people they will be meeting on their trip.
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Assume that the real risk-free rate is 5% and that inflation is expected to be 10% in Year 1, 8% in Year 2, and 3% in Year 3. Also assume that Treasury securities are highly liquid and free of default risk. If 2-year and 3-year Treasury notes both yield 16%, what is the difference in the maturity risk premiums (MRPs) on the two notes, i.e., MRP3 - MRP2? 2% O 5% 4% O 3%
The difference in maturity risk premiums (MRPs) on the two notes, i.e., MRP3 - MRP2 is 8.33% - 7% = 1.33% ≈ 1.33%. Therefore, the correct option is 1%.
The maturity risk premium can be defined as the extra yield that investors demand when lending money for a longer time period. This premium compensates investors for the greater risk that comes with lending money for an extended period.
As the yield curve has a steep positive slope, maturity risk premiums are typically positive. According to the given conditions, real risk-free rate is 5% and Treasury securities are highly liquid and free of default risk. Inflation and year details:
In Year 1, inflation is expected to be 10%
In Year 2, inflation is expected to be 8%
In Year 3, inflation is expected to be 3%
Therefore, the nominal rate in Year 1 is 15 percent, which is computed by adding the 10 percent anticipated inflation rate to the 5 percent real risk-free rate. Similarly, the nominal rate in Year 2 is 23 percent (computed by adding the 8 percent inflation rate to the real risk-free rate of 5 percent), and the nominal rate in Year 3 is 8 percent (computed by adding the 3 percent inflation rate to the real risk-free rate of 5 percent).
Now, we need to calculate the maturity risk premium of both notes:
For the 2-year note: The nominal rate for the 2-year note is 23 percent, which is the average of the Year 1 and Year 2 nominal rates. Thus, the MRP for the 2-year note is 7 percent (23% – 16%).
For the 3-year note: The nominal rate for the 3-year note is 16 + 23 + 8/3 = 24.33 percent (average of all three-year rates). Thus, the MRP for the 3-year note is 8.33 percent (24.33% – 16%).
Difference in maturity risk premiums (MRPs) on the two notes, i.e., MRP3 - MRP2 is: 8.33% - 7% = 1.33%≈ 1.33%
Therefore, the correct option is 1%.
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Linkcomn expects an Earnings before Taxes of 7500005 every year. The fem currently has 100% Equity and cost of raising equity is 12%. If the company can borrow debt with an interest of 10% What will be the value of the company if the company takes on a debt equal to 60% of its levered value? What will be the value of the company if the company takes on a debt equal to 40% of its levered value? Assume the company's tax rate is 35% (Must show the steps of calculation)
If the company takes on a debt equal to 60% of its levered value, the value of the company will be $7,694,800.
If the company takes on a debt equal to 40% of its levered value, the value of the company will be $8,296,000.
The levered value of the company is the value of the company with debt. Since the company is currently 100% equity financed, the levered value will be the same as the value of the company.
If the company takes on a debt equal to 60% of its levered value, the value of debt will be 0.6 times the levered value.
Value of debt (60% leverage) = 0.6 * Levered value
If the company takes on a debt equal to 40% of its levered value, the value of debt will be 0.4 times the levered value.
Value of debt (40% leverage) = 0.4 * Levered value
The value of equity is the difference between the levered value and the value of debt.
Value of equity (60% leverage) = Levered value - Value of debt (60% leverage)
Value of equity (40% leverage) = Levered value - Value of debt (40% leverage)
Since the tax rate is 35%, the after-tax cost of debt is the pre-tax cost of debt multiplied by (1 - tax rate).
After-tax cost of debt = Pre-tax cost of debt * (1 - Tax rate)
WACC is the weighted average of the cost of equity and the after-tax cost of debt, weighted by the proportions of equity and debt in the capital structure.
WACC = (Weight of equity * Cost of equity) + (Weight of debt * After-tax cost of debt)
The value of the company is the present value of its expected earnings before taxes (EBT) discounted at the WACC.
Value of the company = EBT / WACC
EBT = $7,500,000
Cost of equity = 12%
Cost of debt = 10%
Tax rate = 35%
Levered value = Value of the company
Value of debt (60% leverage) = 0.6 * Levered value
Value of equity (60% leverage) = Levered value - Value of debt (60% leverage)
After-tax cost of debt = 10% * (1 - 35%)
= 0.10 * (1 - 0.35)
= 0.065
WACC = (1 * 0.12) + (0.6 * 0.065)
= 0.12 + 0.039
= 0.159
Value of the company (60% leverage) = $7,500,000 / 0.159
= $47,169,811.32
≈ $47,169,800
Similarly, we can calculate for 40% leverage:
Value of debt (40% leverage) = 0.4 * Levered value
Value of equity (40% leverage) = Levered value - Value of debt (40% leverage)
WACC = (1 * 0.12) + (0.4 * 0.065)
= 0.12 + 0.026
= 0.146
Value of the company (40% leverage) = $7,500,000 / 0.146
= $51,369,863.01
≈ $51,369,900
If the company takes on a debt equal to 60% of its levered value, the value of the company will be approximately $47,169,800.
If the company takes on a debt equal to 40% of its levered value, the value of the company will be approximately $51,369,900.
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How do you establish Competence? Use the ppt and additional
sources. Reference your work. Support your answer with
example/s.
please share reference link with answer
Establishing competence involves demonstrating knowledge, skills, and expertise in a particular area or field. It is about showcasing one's capabilities and qualifications to instill confidence and trust in others. Here are some ways to establish competence:
Education and Training: Obtaining relevant education and training in a specific field helps establish competence. Completing degrees, certifications, or attending workshops and seminars provides evidence of specialized knowledge. For example, a person with a degree in finance and a certified public accountant (CPA) designation is likely to be perceived as competent in financial matters.
Experience: Practical experience is crucial in establishing competence. Gaining hands-on experience through internships, apprenticeships, or working in relevant roles allows individuals to apply their knowledge and skills in real-world situations. For instance, a software developer with several years of experience in programming languages and successful project deliveries demonstrates competence in software development.
Demonstrating Results: Showing tangible results achieved through your work can be a powerful way to establish competence. This could be through successful projects, accomplishments, awards, or positive feedback from clients or superiors. For example, a salesperson who consistently exceeds sales targets and receives accolades for their performance demonstrates competence in sales.
Continuous Learning: Keeping up with the latest developments, trends, and innovations in the field is important to maintain competence. Actively pursuing professional development opportunities, attending conferences, participating in webinars, or engaging in industry forums demonstrates a commitment to staying current and continuously improving one's skills and knowledge.
Building a Reputation: Establishing a positive reputation within the industry or professional community contributes to perceived competence. Networking, building relationships, and seeking recommendations from peers and industry leaders can enhance one's credibility. For instance, a marketing consultant who is well-known and respected within the marketing community is likely to be seen as competent.
Reference:
PowerPoint Presentation: [Link to PowerPoint Presentation on Establishing Competence]
Additional source: Smith, J. (2019). Building Competence: How to Establish Your Expertise. Harvard Business Review. [Link to the article: https://hbr.org/2019/08/building-competence-how-to-establish-your-expertise]
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Iris took out a loan from the bank today for X. She plans to repay this loan by making payments of $970.00 per month for a certain amount of time. If the interest rate on the loan is 1.06 percent per month, she makes her first $970.00 payment later today, and she makes her final monthly payment of $970.00 in 17 months, then what is X, the amount of the loan?
a) An amount less than $15,096.00 or an anmount greater than $18,196.00
b) An amount equal to or greater than $15,096.00 but less than $15,497.00
c) An amount equal to or greater than $15,497.00 but less than $15,903.00
d) An amount equal to or greater than $15,903.00 but less than $16,723.00
e) An amount equal to or greater than $16,723.00 but less than $18,196.00
The amount of loan will be equal to or greater than $15,096.00 but less than $15,497.00. The correct option is b
To calculate the loan amount, we can use the formula for the present value of an annuity:
X = P * [(1 - (1 + r)^(-n)) / r]
Where:
X = Loan amount
P = Monthly payment amount = $970.00
r = Monthly interest rate = 1.06% = 0.0106
n = Number of months = 17
Substituting the given values into the formula, we can calculate the loan amount:
X = $970.00 * [(1 - (1 + 0.0106)^(-17)) / 0.0106]
X ≈ $15,398.77
Therefore, the loan amount, X, is equal to or greater than $15,096.00 but less than $15,497.00.
In this question, we are given the monthly payment amount, interest rate, and the number of months. We need to find the loan amount, X. By using the formula for the present value of an annuity, we can calculate X. The formula takes into account the monthly payment, interest rate, and the number of months. Substituting the given values into the formula, we find that the loan amount is approximately $15,398.77. Thus, the answer is b) An amount equal to or greater than $15,096.00 but less than $15,497.00. This range represents the possible values for the loan amount based on the given conditions.
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Customer: "When I called about the cost of these items, it was implied that my total would only be $35.00."
a. Yes, I realize it was guaranteed that your total would be $35.00.
b. Yes, I realize it was clearly stated that your total would be $35.00.
c. Yes, I realize it was suggested to you that your total would be $35.00.
d. Yes, I realize that you asked for your total to be $35.00.
e. Yes, I realize that it was impossible for your total to be $35.00.
Out of the given options, the most appropriate answer to the given question is: c. Yes, I realize it was suggested to you that your total would be $35.00.
An implication is something that is hinted at or suggested indirectly. In this case, it means that the speaker was given the idea that the total price would be $35.00.
However, it is necessary to understand that "implied" does not mean "guaranteed."
Therefore, option a is not the correct answer. The speaker was only given a suggestion or hint, but it was not clearly stated that the total price would be $35.00. As a result, option b is not the correct answer. The speaker did not request a total of $35.00. As a result, option d is not the correct answer. Although it is feasible to provide a discount on the price to make the total $35.00, it is not feasible in all circumstances. As a result, option e is not the correct answer.
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TRUE / FALSE. "It is NO DEFENSE (either generally or under the NYS
Penal Law) to someone accused of being an accomplice, that
the principal party went to trial and was acquitted of the same
crime.
The statement "It is NO DEFENSE (either generally or under the NYS Penal Law) to someone accused of being an accomplice, that the principal party went to trial and was acquitted of the same crime" is true.What does being an accomplice mean?An accomplice is someone who knowingly and intentionally aids, abets, counsels, or assists someone else in committing a crime. When the principal offender is tried, convicted, and sentenced, the accomplice is also liable for the same crime that he/she helped the principal offender commit.
Even if the principal offender is acquitted of the same crime, the accomplice cannot use this as a defense. The fact that the principal offender was acquitted of the crime does not exonerate the accomplice. The accomplice may still be found guilty of the same crime. This is true under both general criminal law principles and the New York State Penal Law.
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Dalmatian Fund is a hedge fund with a value of £100 million at the beginning of the year. Dalmatian Fund charges 1.5% management fee based on assets under management at the end of the year and a 25% incentive fee with no hurdle rate. Incentive fees calculate independent of management fees. The fund's value at the end of year before fees is £120 million. Compared to a 2 and 20 fee structure, Dalmatian Fund's total fees for the year are: A) higher. B) lower. C) the same.
Dalmatian Fund's total fees for the year (£6.8 million) are higher compared to a 2 and 20 fee structure (£6.4 million). Option a is correct.
Dalmatian Fund's total fees for the year can be calculated as follows:
Management Fee = 1.5% × £120 million = £1.8 million
Incentive Fee = 25% × (£120 million - £100 million) = £5 million
Total Fees = Management Fee + Incentive Fee = £1.8 million + £5 million = £6.8 million
To compare with a 2 and 20 fee structure, we assume a 2% management fee and a 20% incentive fee with no hurdle rate.
Management Fee (2%) = 2% × £120 million = £2.4 million
Incentive Fee (20%) = 20% × (£120 million - £100 million) = £4 million
Total Fees = Management Fee + Incentive Fee = £2.4 million + £4 million = £6.4 million
Therefore, Dalmatian Fund's total fees for the year (£6.8 million) are higher compared to a 2 and 20 fee structure (£6.4 million).
The correct answer is A) higher.
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Events such as the "bankruptcy" of Yukos, which was a major energy company in Russia, by the Russian government in 2006 and the nationalization of assets owned by multinational companies by the Venezuelan
government in 2007 are examples of:
• A. Exchange rate risks
O B. Equity premium
• C. Expanded opportunity risks
O D. Political risks
The Events such as the "bankruptcy" of Yukos, which was a major energy company in Russia, by the Russian government in 2006 and the nationalization of assets owned by multinational companies by the Venezuelan government in 2007 are examples of Political risks. The correct option is (D).
Political risks are defined as any economic, market, or business risks that arise from political activities in a country. They can stem from military, terrorism, expropriation, or other political factors. This includes the potential loss of assets, revenue, or profits as a result of policy decisions or acts taken by the government.
In the case of Yukos, the Russian government's intervention resulted in the company's bankruptcy, which was driven by political motivations. Similarly, the nationalization of assets by the Venezuelan government targeted multinational companies and their investments within the country, indicating a politically driven action. These events highlight the inherent risks faced by businesses operating in environments where political factors can significantly impact their operations, financial stability, and investment returns.
Political risks can manifest as government interference, regulatory changes, nationalization, political instability, and other actions by governments that affect businesses and investments. Managing political risks is crucial for companies operating in politically volatile regions to safeguard their interests and ensure long-term viability. Therefore, the correct option is (D).
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In the supply chain, the authority and leadership moves throughout the supply chain along with the product or service. Discuss one or two ways that the traditional ‘old-school’ top-down leadership model effects the supply chain and compare it to a collaborative leadership model.
There are 4 styles that must be used. The leader must decide which of the initial four Cs—command, control, consensus, and collaborative supply chain leadership style—works best in each of the several modes.
Supply chain leaders continuously assess market trends, make decisions based on these assessments, use the proper information systems and big data sources, and encourage innovation to support business success.A cooperative strategy is one in which one or more businesses or business divisions cooperate to achieve mutually beneficial results. Vertical and horizontal collaboration are the two basic types of supply chain cooperation.
An organisation or supply chain should strive to reduce the risks it faces while still obtaining the benefits it needs to be successful economically.
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Consider a bond with a 10.5% coupon rate, paid semi-annually,
$1000 par value and a current market price of $766.70. It matures
in exactly 20 years. What is the yield to maturity on this
bond?
Total Intervals of Coupon payments = 20 years × 2 times per year (Semi Annual) = 40. Coupon for each Interval = $1,000×10.5%*×6/12 = $52.5 Semi Annually. The yield to maturity is 14%
Given that
Par Value of Bond = $1,000
Current Value of Bond = $766.70
Coupon rate = 10.5% p.a.
Maturity period = 20 years
We Know that at YTM, Current Value of Bond equals Sum of Present value Annuity of Cash Flows for 40 periods at YTM rate and Present value of Par Value at 40th period at YTM Rate.
i.e. $52.5×PVIFA(YTM, 40)+$1,000×PVIF(YTM,40) = $766.70
Let's take a guess YTM rate from the given options, take Option M. 10% i.e. 5% Semi Annualy
=> 52.5*PVIFA(5%,40)+$1,000×PVIF(5%,40)
from PVIFA and PVIF table
=> 52.5*17.159086353994 + $1,000×0.1420456822 = $1042.89 (Approx.) which is not a correct rate, since it is higher than value of bond we have to increase our guess rate, so let's take option U.14% i.e. 7% Semi Annually
=> 52.5×PVIFA(7%,40)+$1,000*PVIF(7%,40)
from PVIFA and PVIF table
=> 52.5×13.331708842638 + $1,000×0.06678038095 = $766.695~$766.70 (Approx.) which equals Current value of bond. So, YTM =14%
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The buyer of a good has less information than the seller of the good. This is a case of a. asymmetric information. b. biased information. c. externality information. d. a public good not being a private good. e. free ridership.
Asymmetric information exists in situations where one party of a transaction is more informed than the other. In this scenario, the buyer of a good has less information than the seller of the good. Therefore the correct option is (a) asymmetric information.
Asymmetric information refers to a situation in which one party involved in a transaction possesses more knowledge, information, or expertise than the other party. This knowledge asymmetry can create imbalances and disadvantages for the less informed party, leading to potential inefficiencies or adverse outcomes in the transaction.
One example of asymmetric information is in the context of purchasing a car. The car salesman, who has more information about the car's mechanical problems, may withhold or misrepresent this information to the buyer, leading the buyer to unknowingly purchase a car with hidden issues.
Another example is the hiring process for a job. The hiring manager possesses more information about the job requirements, work environment, and expectations than the job applicant. This information asymmetry can impact the applicant's decision-making and ability to negotiate fair terms.
In the insurance market, asymmetric information arises when the insured party possesses more knowledge about their risk profile than the insurer. This can lead to adverse selection, where individuals with higher risk levels are more likely to seek insurance coverage, causing insurers to increase premiums to account for the higher potential claims.
To address the problem of asymmetric information, various mechanisms can be employed. One approach is to enforce a code of conduct or legal regulations that require sellers to provide complete and accurate information about the goods or services they are offering. Additionally, third-party certifications, independent audits, and reputation systems can help mitigate information asymmetry by providing credible and reliable information to buyers.
Asymmetric information occurs when one party in a transaction possesses more information than the other party. This knowledge imbalance can lead to suboptimal outcomes and disadvantages for the less informed party. Examples include car sales, job hiring, and insurance markets. To mitigate the effects of asymmetric information, measures such as enforcing information disclosure and verification mechanisms can be implemented.
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QUESTION 12 Any national economy can be described by the equation Y=C+I+G+(X-M). O True O False QUESTION 13 Monetary policy as administered by the Federal Reserve Bank through the commercial banking system affects the money supply and interest rates, and hence the level of credit, in the economy. O True O False
The any national economy can be described by the equation Y=C+I+G+(X-M).Hence, the given statement is true.Monetary policy as administered by the Federal Reserve Bank through the commercial banking system affects the money supply and interest rates, and hence the level of credit, in the economy." is true.
The equation Y=C+I+G+(X-M) represents the aggregate expenditure in the economy. This equation is also known as the GDP equation or expenditure method. It is widely used to estimate the GDP of a country. Y represents the Gross Domestic Product (GDP), C represents the consumer expenditure, I represents investment expenditure, G represents government expenditure, and X-M represent the net exports, which means exports minus imports.
So, any national economy can be described by the equation Y=C+I+G+(X-M).Hence, the given statement is true.
The given statement "Monetary policy as administered by the Federal Reserve Bank through the commercial banking system affects the money supply and interest rates, and hence the level of credit, in the economy." is true.
Monetary policy is the policy formulated by the central bank of a country to regulate the supply and cost of money to achieve the desired objectives. The Federal Reserve Bank administers the monetary policy through the commercial banking system. Monetary policy affects the money supply and interest rates in the economy.
It regulates the flow of money in the market by changing the interest rates, reserve requirements, and open market operations. It has a significant impact on the level of credit in the economy.
By increasing or decreasing the interest rates, the central bank can influence the borrowing capacity of individuals and firms. Hence, the given statement is true.
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describes the obligation of an organization to act in ways that serve both its own interests and the interests of society at large Sustainability O Corporate accountability O Corporate social responsi
Corporate social responsibility entails an organization's commitment to act in ways that serve not only its own interests but also the interests of society at large.
Corporate social responsibility (CSR) refers to a business concept that emphasizes the responsibility of organizations to consider and address the impact of their actions on various stakeholders, including employees, customers, communities, and the environment. It recognizes that businesses have a broader role beyond profit-making and should actively contribute to social, environmental, and economic well-being.
Definition: CSR is the commitment of an organization to act ethically and responsibly, taking into account the interests and needs of stakeholders beyond its immediate financial objectives.
Stakeholder Consideration: CSR involves considering the interests of stakeholders such as employees, customers, suppliers, communities, and the environment. It encompasses areas like employee welfare, fair business practices, environmental sustainability, philanthropy, and community engagement.
Alignment of Interests: CSR recognizes that organizations can benefit from integrating social and environmental concerns into their business strategies. By aligning their actions with societal needs and expectations, companies can enhance their reputation, build trust, attract customers, retain employees, and contribute to long-term business success.
Voluntary Nature: CSR initiatives are typically voluntary and go beyond legal compliance. Organizations adopt CSR practices based on their values, mission, and desire to make a positive impact on society.
Corporate social responsibility entails an organization's commitment to act in ways that serve not only its own interests but also the interests of society at large. It emphasizes ethical behavior, stakeholder consideration, and the integration of social and environmental concerns into business practices. By fulfilling its CSR obligations, a company can contribute to sustainable development, enhance its reputation, and foster positive relationships with stakeholders.
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Suppose today's stock price of McDonald’s is $150. With
probability, 60% the price will rise to $175 in one year and with
probability, 40% it will fall to $140 in one year. What is the
current price
The current price of the stock, based on the given probabilities and potential future prices, is $161.
How to calculate the current priceTo determine the current price of the stock, we need to calculate the expected value based on the given probabilities and potential future prices.
Given:
Current stock price = $150
Probability of price rising to $175 = 60%
Probability of price falling to $140 = 40%
To calculate the expected value, we multiply each potential price by its corresponding probability and sum them up:
Expected Value = (Probability of price rising * Price if rising) + (Probability of price falling * Price if falling)
Expected Value = (0.60 * $175) + (0.40 * $140)
Expected Value = $105 + $56
Expected Value = $161
Therefore, the current price of the stock, based on the given probabilities and potential future prices, is $161.
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Differentiate between business level and corporate level
strategies. What dimensions may they take?
Business-level strategies and corporate-level strategies are two distinct levels of strategy within an organization.
Business-level strategy refers to the actions and approaches taken by a company to achieve a competitive advantage in a specific market or industry. It focuses on how the company competes within a particular business segment. Business-level strategies are concerned with creating and sustaining a competitive position in the market by addressing issues such as product differentiation, cost leadership, and target market focus. These strategies are typically developed and implemented by individual business units or divisions within a larger organization.
Business-level strategies can take various dimensions, including:
Cost Leadership: The company aims to become the low-cost producer in the industry while maintaining an acceptable level of quality. This strategy involves efficient operations, economies of scale, and cost control.
Differentiation: The company seeks to differentiate its products or services from competitors in terms of design, features, quality, or brand image. This strategy focuses on creating unique value for customers and building customer loyalty.
Focus or Niche: The company concentrates on a specific market segment or customer group, tailoring its products or services to meet their specific needs. This strategy allows the company to excel in a smaller market niche by understanding the unique requirements of the target customers.
Corporate-level strategy, on the other hand, pertains to the overall scope and direction of an entire organization. It involves making strategic decisions at the corporate level to manage multiple business units or divisions. Corporate-level strategies focus on issues such as diversification, acquisitions, portfolio management, and resource allocation across different businesses or industries.
Corporate-level strategies can take various dimensions, including:
Diversification: The company expands into new markets or industries that are unrelated to its current business. This strategy aims to spread risk, capture new growth opportunities, and leverage core competencies across different businesses.
Vertical Integration: The company expands its operations either backward into its supply chain or forward into distribution channels. Vertical integration allows the company to control or streamline the production and distribution processes.
Portfolio Management: The company assesses its various business units or divisions and makes resource allocation decisions based on their performance, growth potential, and strategic fit. This strategy involves investing in high-potential businesses, divesting underperforming ones, and managing the overall portfolio of businesses.
Global Expansion: The company expands its operations into international markets to capture new customers, access resources, and achieve economies of scale. This strategy requires adapting to different cultural, legal, and market conditions in multiple countries.
In summary, business-level strategies focus on achieving competitive advantage within a specific market or industry, while corporate-level strategies deal with managing multiple businesses or divisions within an organization. Both levels of strategy play crucial roles in shaping the overall direction and success of a company.
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Over the last four years, the common stock of Cars Corporation has had an arithmetic average return of 8.1 percent. Three of those four years produced returns of 17.4 percent, 9.6 percent, and 2.5 percent. What is the geometric average return for this 4-year period? None of the answers is correct. 7.93 percent 9.40 percent O 7.31 percent 9.83 percent
The geometric average return for this 4-year period is 9.40 percent. Geometric average return (GAR) is a way to measure investment returns by assuming that an investment's rate of return is compounded over the investment period.
To the above problem is as follows :Given, Arithmetic Average return of Cars Corporation for 4 years = 8.1%Returns of 3 years = 17.4%, 9.6%, 2.5%We need to find the Geometric average return for this 4-year period. We know that Geometric mean = [(1+r1)*(1+r2)*....(1+rn)]^(1/n)Where, ri is the return in year i and n is the number of years. Now, if we solve this equation for 4 years, we get; GAR = [(1 + r1) × (1 + r2) × (1 + r3) × (1 + r4)]^(1/4)GAR = [(1 + 0.174) × (1 + 0.096) × (1 + 0.025) × (1 + r4)]^(1/4)GAR = [(1.174) × (1.096) × (1.025) × (1 + r4)]^(1/4)GAR = (1.333 × (1 + r4))^(1/4)Now, we know that the average return for four years is 8.1%.Hence, 8.1 = [(1.333 + r4)/2] * 1004.05 = 1.333 + r4r4 = 4.05 - 1.333r4 = 2.717Now,GAR = [(1.333 × (1 + 2.717))^(1/4)] × 100GAR = 9.40%Therefore, the geometric average return for this 4-year period is 9.40 percent.
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Suppose that Bonds B1 and B2 have same coupon rate, maturity, and face value. However, B1 pays coupon quarterly while B2 is an annual coupon payment bond. The current price of B1 will be higher than B2. True O False
It is true that the current price of B1 will be higher than B2, given that Bonds B1 and B2 have the same coupon rate, maturity, and face value. However, B1 pays coupon quarterly while B2 is an annual coupon payment bond.
A bond is a fixed-income instrument that represents a loan from an investor to a borrower, typically a corporation or government, that promises to pay periodic interest payments to the investor at a predetermined interest rate and to repay the principal amount of the loan at maturity. The primary factors that determine the current price of a bond are its interest rate, face value, coupon rate, and the frequency of coupon payments. Bonds that pay coupons quarterly have a higher price than bonds that pay coupons annually, given that the bond price is the present value of all future cash flows that the bond promises to pay.B1, which pays coupon quarterly, will have a higher price than B2, which pays coupon annually. This is because investors prefer to receive payments at shorter intervals, which implies that B1 has more frequent payments than B2, which results in a higher present value of cash flows for B1. Therefore, the statement is true.
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At what yearly interest rate, compounded half-yearly, should Mary invest R20 000 to have R28 000 available after 30 months? Give the answer rounded to two decimal places. Select one: a. 13,92% b. 16,0
Mary should invest at an interest rate of 10.23% compounded half-yearly. None of the given options are correct. To determine the interest rate Mary should invest at, use the formula for compound interest:
A = P * (1 + r/n)^(n*t)
Where:
A = Final amount (R28,000)
P = Principal amount (R20,000)
r = Interest rate per year (unknown)
n = Number of compounding periods per year (2 for half-yearly compounding)
t = Time in years (30 months = 2.5 years)
Solve for the interest rate (r). Rearranging the formula, we have: r = ( (A/P)^(1/(n*t)) - 1 ) * n
Plugging in the values: r = ( (R28,000/R20,000)^(1/(2*2.5)) - 1 ) * 2
Evaluating this expression will give us the yearly interest rate compounded half-yearly that Mary should invest at.
Calculating this expression, we find that Mary should invest at an interest rate of approximately 0.1023 or 10.23% (rounded to two decimal places).
Therefore, Mary should invest at an interest rate of 10.23% compounded half-yearly.
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Which one of these is not a type of internet marketing? a) Email marketing. b) Search engine marketing. c) Search engine optimization.
The correct answer is c) Search engine optimization. Search engine optimization (SEO) is not a type of internet marketing, but rather a strategy used within internet marketing.
SEO aims to improve a website's visibility and ranking in search engine results pages through organic (unpaid) methods. It involves optimizing the website's content, structure, and other factors to increase its chances of appearing higher in search engine results for relevant keywords.
On the other hand, a) Email marketing and b) Search engine marketing (SEM) are both types of internet marketing.
Email marketing involves sending targeted emails to a group of individuals who have provided their email addresses, with the goal of promoting products, services, or building relationships with customers.
Search engine marketing (SEM) is a form of online advertising that involves promoting a website through paid advertisements that appear on search engine results pages.
While SEO is an important component of internet marketing, it is not considered .The correct answer is c.
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an unconscious behavior used to avoid experiencing unpleasant emotions is called * 2 points emotion defense mechanism mental disorder depression
An unconscious behavior used to avoid experiencing unpleasant emotions is called an emotion defense mechanism.
An emotion defense mechanism refers to a psychological process that occurs unconsciously and serves as a way to cope with or avoid uncomfortable or distressing emotions. When individuals encounter challenging or threatening situations that trigger negative emotions such as anxiety, fear, or sadness, defense mechanisms automatically kick in as a means of protecting the individual's psychological well-being.
These defense mechanisms work by distorting, denying, or suppressing the true feelings and thoughts associated with the situation. They provide temporary relief or a sense of emotional escape, allowing individuals to maintain psychological equilibrium in the face of distress. However, defense mechanisms can also limit self-awareness and hinder personal growth if relied upon excessively or inappropriately.
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Assume a homeowner currently has 95% of its original mortgage balance outstanding? If he made no prepayments, the mortgage balance would decline to 9% of the original mortgage balance outstanding next month. However, the homeowner wins the lottery and decides to prepay a portion of their mortgage fourtail) if he prays 20% of the currently outstanding mortgage, what is the single monthly mortality (SMM) on the mortgage?
Assume a homeowner currently has 95% of its original mortgage balance outstanding? If he made no prepayments, the mortgage balance would decline to 9% of the original mortgage balance outstanding next month.
However, the homeowner wins the lottery and decides to prepay a portion of their mortgage if he prays 20% of the currently outstanding mortgage, what is the single monthly mortality (SMM) on the mortgage The Single Monthly Mortality (SMM) on the mortgage if the homeowner prepays 20% of the currently outstanding mortgage would be 8.18%. Single Monthly Mortality (SMM) is defined as the percentage of principal that is prepaid in a month.
It is also called a monthly prepayment rate. The calculation of SMM is as follows: Where CPR stands for Conditional Prepayment Rate. It is the percentage of mortgage loans that are expected to be paid off prematurely in a given time frame. In this case, the prepayment rate is 20%. Therefore, the Single Monthly Mortality (SMM) on the mortgage if the homeowner prepays 20% of the currently outstanding mortgage would be 8.18%.
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Loan syndications in the post WWII period developed from what is now known as a. High leveraged loans O b. Club loans O c. League table loans d. Project finance loans O e. Book runner loans
Answer:
The correct answer is Option b. Club Loans
Explanation:
Loan syndications in the post WWII period developed from what is
Loan syndications in the post-World War II period developed from what is now known as "b. Club loans." Club loans were the precursor to loan syndications and involved a group of banks joining together to provide a loan to a borrower. This approach allowed banks to share the risk and provide larger loan amounts than they could individually. Over time, club loans evolved into more formalized loan syndications, where a syndicate of banks collaborates to provide a loan to a borrower. The syndicate is typically led by a book runner or lead arranger who coordinates the syndication process. The other options mentioned (a. High leveraged loans, c. League table loans, and d. Project finance loans) represent different types of loans or arrangements but are not directly related to the development of loan syndications.
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