The given statement "a primary question is a question that introduces a new topic or subtopic in an interview." is true because a primary question is a question that introduces a new topic or subtopic in an interview.
Primary questions are open-ended questions that are designed to initiate a conversation or discussion on a new or important topic. These questions are intended to gather detailed and relevant information from the interviewee and create a context for the rest of the interview. Therefore, primary questions play a vital role in ensuring that the interview stays focused and relevant to the purpose of the interview.
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Suppose that a U.S. FI has the following assets and liabilities: Assets Liabilities $300 million U.S. loans (one year) in dollars $500 million U.S. CDs (one year) in dollars $200 million equivalent German loans (one year) in euros The promised one-year U.S. CD rate is 4 percent, to be paid in dollars at the end of the year; one- year, default risk-free loans in the United States are yielding 6 percent; and default risk-free one-year loans are yielding 10 percent in Germany. The exchange rate of dollars for euros at the beginning of the year is $1.10/€1. a. Calculate the dollar proceeds from the German loan at the end of the year, the return on the FI's investment portfolio, and the net interest margin for the FI if the spot foreign exchange rate has not changed over the year. b. Calculate the dollar proceeds from the German loan at the end of the year, the return on the FI's investment portfolio, and the net interest margin for the FI if the spot foreign exchange rate falls to $1.00/€1 over the year. c. Calculate the dollar proceeds from the German loan at the end of the year, the return on the FI's investment portfolio, and the net interest margin for the FI if the spot foreign exchange rate rises to $1.20/€1 over the year.
a. To calculate the dollar proceeds from the German loan at the end of the year, we need to convert the euro amount of the loan into dollars at the beginning of the year's foreign exchange rate
[tex]$200 million[/tex]× [tex]$1.10/€1[/tex]
= [tex]$220 million[/tex]
At the end of the year, the German loan will earn an interest rate of 10 percent, which is equivalent to €20 million. Therefore, the dollar proceeds from the German loan at the end of the year will be:
[tex]€20 million[/tex]× [tex]$1.10/€1[/tex] = [tex]$22 million[/tex]
The return on the FI's investment portfolio can be calculated as the sum of the interest earned on all assets minus the interest paid on all liabilities divided by the total assets.
Interest earned on US loans =[tex]$300 million*6[/tex]% = $[tex]18 million[/tex]
Interest earned on US CDs = $[tex]500 million*4[/tex]% = $[tex]20 million[/tex]
Interest earned on German loans = €[tex]20 million[/tex] = $[tex]22 million[/tex]
Total interest earned = $60 million
Interest paid on US CDs = $[tex]500[/tex]million × [tex]4[/tex]% = $[tex]20[/tex] million
Net interest income = $[tex]40[/tex]million
The net interest margin for the FI is:
Net interest income / Total assets = $[tex]40[/tex] million / ($[tex]300[/tex] million + $[tex]500[/tex] million + $[tex]220[/tex] million) = [tex]6.45[/tex]%
b. If the spot foreign exchange rate falls to $[tex]1.00/[/tex]€1 over the year, the dollar proceeds from the German loan at the end of the year will be:
€[tex]20[/tex]million × $[tex]1.00[/tex]/€1 = $[tex]20[/tex] million
The return on the FI's investment portfolio will not change, as the interest rates on all assets and liabilities remain the same. Therefore, the return on the FI's investment portfolio will still be $60 million.
The net interest margin for the FI will be:
Net interest income / Total assets = $[tex]40[/tex]million / ($[tex]300[/tex] million + $[tex]500[/tex]million + $[tex]200[/tex]million) = [tex]6.06[/tex]%
c. If the spot foreign exchange rate rises to $1.20/€1 over the year, the dollar proceeds from the German loan at the end of the year will be:
€[tex]20[/tex]million × $[tex]1.20[/tex]/€1 = $[tex]24[/tex] million
The return on the FI's investment portfolio will not change, as the interest rates on all assets and liabilities remain the same. Therefore, the return on the FI's investment portfolio will still be $60 million.
The net interest margin for the FI will be:
Net interest income / Total assets = $[tex]40[/tex]million / ($[tex]300[/tex] million + $[tex]500[/tex] million + $[tex]240[/tex] million) =[tex]6.38[/tex]%
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If housing values rise nationwide, there will be an): A. decrease in wealth as consumers spend more income on mortgage payments.
B. increase in consumer spending at any given level of disposable income. C. decrease in aggregate expenditure. D. drop in investment spending.
If housing values rise nationwide, there will be an: B. increase in consumer spending at any given level of disposable income.
What is the reason for this phenomenon?
This is because the rise in housing values leads to an increase in wealth for homeowners, which can lead to higher consumer confidence and spending.
If housing values rise nationwide, homeowners' wealth increases. This leads to an increase in their perceived wealth and, as a result, they are more likely to spend more on other goods and services. This is because, with a higher home value, they have more equity and can borrow more money against their home's value, allowing them to have greater purchasing power. This increase in consumer spending will occur at any given level of disposable income and will lead to an increase in aggregate expenditure, which is the sum of all spending in the economy.
Option A is incorrect because if housing values rise, homeowners' equity increases, which means they are spending a smaller percentage of their income on mortgage payments, not a greater percentage.
Option C is incorrect because an increase in housing values would likely lead to an increase in aggregate expenditure, not a decrease.
Option D is incorrect because an increase in housing values would likely lead to an increase in investment spending, as real estate is a common form of investment.
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which of the following is true? group of answer choices an increase in sales price per unit decreases the contribution margin per unit. an increase in sales price per unit increases the number of units required to break even. when the sales price per unit decreases, the breakeven point increases. when the sales price per unit increases, the contribution margin per unit remains the same.
The following statement that is true is when the sales price per unit decreases, the break-even point increases. The correct option is C.
The break-even point is the point where the total revenues equal the total costs, and the company is neither making a profit nor a loss. The break-even point can be calculated by dividing the fixed costs by the contribution margin per unit, which is the difference between the sales price per unit and the variable cost per unit.
When the sales price per unit decreases, the contribution margin per unit decreases as well. This means that each unit sold contributes less towards covering the fixed costs and reaching the break-even point. Therefore, to reach the break-even point, the company needs to sell more units than before the decrease in the sales price per unit, and the break-even point increases.
In contrast, when the sales price per unit increases, the contribution margin per unit also increases, and the company needs to sell fewer units to reach the break-even point.
Therefore, the other statements in the question are false. An increase in sales price per unit increases the contribution margin per unit, and it does not increase the number of units required to break even. When the sales price per unit increases, the contribution margin per unit also increases. So, the correct option is C.
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the ability to speak the language used at mnc headquarters is enough to ensure that the personnel are capable of doing the work. group of answer choices true false
The statement "The ability to speak the language used at MNC (Multinational Corporation) headquarters is not enough to ensure that the personnel are capable of doing the work." is true, because it alone does not guarantee an individual's ability.
While language proficiency is important for effective communication within the organization, there are several other factors that contribute to an individual's ability to perform their job effectively.
Some of these factors include relevant skills, expertise, experience, and adaptability. In addition, the ability to work in a diverse and multicultural environment, understanding of the company's culture and values, as well as problem-solving and decision-making skills also play a significant role in determining an individual's work capabilities.
Therefore, although language proficiency is a valuable asset, it alone does not guarantee an individual's ability to perform their job effectively at an MNC.
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One possible response to managing negative risk it to accept the potential effects from the risk. True or False
The statement "one possible response to managing negative risk is to accept the potential effects of the risk" is true. Negative risk refers to the potential adverse consequences or losses that may arise from a particular event or decision.
These risks can impact various aspects of a project or organization, such as finances, reputation, or operations. Accepting the potential effects of a negative risk involves recognizing that the risk exists and making a conscious decision to tolerate the possible consequences.
This approach is often taken when the cost or effort required to mitigate the risk is too high or when the potential impact of the risk is deemed manageable. In these situations, it may be more feasible and cost-effective to accept the risk and focus on managing its consequences if it materializes, rather than attempting to prevent or minimize its occurrence.
To effectively accept and manage negative risks, it is crucial to establish a risk management process that includes identifying, assessing, and prioritizing potential risks. This involves evaluating the likelihood and impact of each risk and determining the appropriate response based on the organization's risk appetite and available resources.
Additionally, communication and monitoring of the accepted risks are essential to ensure that any changes in the risk landscape are identified and addressed promptly.
In conclusion, accepting the potential effects of a negative risk can be a valid and pragmatic response to managing such risks, especially when mitigation efforts are deemed impractical or cost-prohibitive. This approach requires careful assessment, prioritization, communication, and monitoring of risks to ensure that any adverse consequences are managed effectively.
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Suppose you want to buy a 20-year. $1,000 par value annual bond, with an annual coupon rate of 8%, and pays interest annually. If the bond has 15 years left to maturity and it is currently selling for $989, what is the yield-to-maturity of the bond? (Round your answer to two decimal point)
The answer is 8.27%.
To calculate the yield-to-maturity (YTM) of the bond, we need to use the formula:
P = C / (1 + r)^1 + C / (1 + r)^2 + ... + C / (1 + r)^n + F / (1 + r)^n
where P is the current market price of the bond, C is the annual coupon payment, F is the par value of the bond, n is the number of years until maturity, and r is the yield-to-maturity.
Plugging in the given values, we get:
989 = 80 / (1 + r)^1 + 80 / (1 + r)^2 + ... + 80 / (1 + r)^15 + 1000 / (1 + r)^15
Solving for r using a financial calculator or spreadsheet, we get a yield-to-maturity of 8.27% (rounded to two decimal points).
Therefore, the yield-to-maturity of the bond is 8.27%.
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Kaufman Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have an 11% annual coupon payment, and their current price is $1,185. The bonds may be called in 5 years at 109% of face value (Call price = $1,090).
a) What is the yield to maturity?
b) What is the yield to call if they are called in 5 years?
c) Which yield might investors expect to earn on these bonds? Why?
a) The yield to maturity is 9.09%. This is calculated by taking the present value of all the bond's future cash flows and subtracting the bond's current price.
b) The yield to call if the bonds are called in 5 years is 8.24%. This is calculated by taking the present value of the future cash flows up to the call date and subtracting the bond's current price.
c) Investors might expect to earn the yield to call, since the company has the option to call the bonds in 5 years, and the current call price is lower than the face value. If the company does not call the bonds, then the investors will earn the yield to maturity.
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hich of the following processes involves allocating cost estimates in order to establish a cost baseline for measuring project performance? question 1 options: a) cost estimating b) cost control c) activity cost estimating d) cost budgeting
Cost budgeting is the process that involves allocating cost estimates in order to establish a cost baseline for measuring project performance. Option D.
A financial plan and budget are created utilizing cost estimates through the process of cost budgeting. Professionals can manage their money with the help of a budget. When creating a cost budget, all anticipated expenses for a given time period are added together.
When developing a budget for new projects, project managers frequently employ cost estimation. Cost budgeting can be used by business leaders and financial experts to develop quarterly or annual budgets. To evaluate the success of their projects and spending patterns, these experts can use a cost budget.
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costco has built its successful retail chain using a cost-based pricing strategy. costco marks up products a maximum of 15% to ensure a profit but keep prices lower than competitors' prices. this works for costco because they are in a market where: select one: a. the price is set based on fixed and variable costs of production b. the price is regulated by the government c. the retail price takes customer needs into account d. differentiation is minimal and customers are price sensitive e. customers are willing to pay for different levels of product performance
Costco's success with its retail chain can be attributed to its cost-based pricing strategy, which is effective due to the market conditions where differentiation is minimal and customers are highly sensitive to price (option D).
Costco's success can be attributed to their ability to keep prices low through a cost-based pricing strategy, which is effective in markets where customers are price-sensitive and there is minimal product differentiation. By keeping their markup at a maximum of 15%, they are able to generate profits while still offering lower prices than their competitors.
This pricing strategy appeals to customers who prioritize value and are willing to forgo additional features or services in exchange for lower prices. Additionally, by maintaining a limited selection of products and focusing on bulk sales, Costco is able to reduce costs and offer even lower prices to customers. This pricing strategy has helped Costco establish itself as a major player in the retail industry.
Option D holds true.
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which table best represents what is likely to happen to the demand for andrei's tea if other russian immigrants also open tea rooms in minneapolis?
Without a particular table or information set to work with, I can offer a few common directions on what might happen to the request for Andrei's tea in case other Russian foreigners too open tea rooms in Minneapolis.
It's conceivable that expanded competition from other Russian tea rooms seems to lead to a diminish in a request for Andrei's tea, as clients have more choices to select from. On the other hand, it's moreover conceivable that the nearness of other Russian tea rooms seems to offer assistance.
The particular table that would best speak to the effect of this situation would depend on the accessible information and the particular components at play, such as the number and area of competing tea rooms, changes in promoting and promoting methodologies, and client inclinations and behavior.
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9. At time t = 0, Paul deposits P into a fund crediting interest at an effective annual interest rate of 6.9%. At the end of each year in years 12 through 31, Paul withdraws an amount sufficient to purchase an annuity-due of 120 per month for 5 years at a nominal interest rate of 7.2% compounded monthly. Immediately after the withdrawal at the end of year 31, the fund value is zero. Calculate P.
The value of P is : $717.35.
Number of years of the annuity due = 5 years
Total number of monthly annuity payments in 5 years = 5x12 =60Periodic annuity amount i.e. PMT =$120
Interest rate = 7.2% p.a. compounding monthly
interest rate per month = 7.2/12 = 0.60%
=PV(rate,nper,-pmt,fv,1)
=PV(0.0060,60,-120,0,1)
=$6067.64433692
The withdrawal which is made from year 12 to 31 has a worth of $6067.64433692 at the end of 31 years.
total number of withdrawals from year 12 to year 31 = 20
the effective interest rate earned on the account from where withdrawal is made i.e. rate = 6.9% p.a.
the periodical withdrawal amount has future value of $6067.64433692 hence FV =6067.64433692
Now to compute the periodical withdrawal amount we can use the pmt function of excel as follows:
=PMT(Rate,nper,pv,-fv)
=PMT(0.069,20,0,-6067.64433692)
=$149.63137229
the worth of initial deposit at the end of year 12 from where first withdrawal is made as follows:
=PV(rate,nper,-pmt,fv)
here rate = 6.9% p.a.
nper = 20 years ( from year 12 to year 31)
pmt as computed = 149.63137229
and future value =0 (
=PV(0.069,20,-149.63137229,0)
=$1597.59249591
the worth of deposit today by discounting the future value of it 12 years back as follows:
=PV(rate,nper,pmt,-fv)
=PV(0.069,12,0,-1597.59249591) (PMT =0 ,no periodical withdrawal)
=$717.35
Hence P =$717.35
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the inflation rate in yinland was 14 percent last year. the government of yinland just revalued its currency (the yin) by 15 percent against the dollar. even though it produces products similar to those of the united states, it has much trade with the united states and very little trade with other countries. it presently has trade restrictions imposed on all non-u.s. countries. will the revaluation of the yin increase or reduce inflation in yinland? briefly explain.the revaluation wouldinflation because there is competition from foreign producers.
Imports from the United States to Yinland will become cheaper, and inflation reduces, while Yinland's exports to the United States will become more expensive.
How will the revaluation of the yin increase or reduce inflation in yinland?The revaluation of the yin by 15 percent against the dollar means that the yin is now stronger relative to the dollar. As a result, imports from the United States to Yinland will become cheaper, while Yinland's exports to the United States will become more expensive.
This will likely increase the demand for U.S. goods in Yinland, which could result in increased competition with domestic producers, leading to a reduction in prices and ultimately reducing inflation.
However, it is important to note that trade restrictions imposed on non-U.S. countries could limit the impact of the revaluation on Yinland's economy. With limited trade with non-U.S. countries, the effect of the revaluation may not be as significant as it would have been otherwise.
Other factors, such as changes in the domestic money supply, government policies, and global economic conditions, could also influence inflation in Yinland.
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Estimate income growth based on:
Today, Time0, is year-end (YE): 2018
TICKER ABAB
P/E ttm 29.5
P/E forw 19.5
PEG 2.23
EPS0 2018 4.88
EPS 2017 3.78
Equity /Sh 40.67
Payout % 0.39
What is the long-term growth rate implied by the PEG ratio (typically a 5 year estimate)?
Group of answer choices
a. 0.0947
b. 0.0845
c. 0.0928
d. 0.0898
e. 0.0874
The long-term growth rate implied by the PEG ratio is 0.0845 (option b).
To find the long-term growth rate, divide the P/E ratio by the PEG ratio. In this case, the forward P/E ratio is 19.5 and the PEG ratio is 2.23. So, the growth rate can be calculated as follows:
1. Divide the forward P/E ratio by the PEG ratio: 19.5 / 2.23
2. The result is approximately 0.0845
Thus, the long-term growth rate implied by the PEG ratio is 0.0845, which is typically a 5-year estimate. This value can be used to help make investment decisions by comparing it to the growth rates of other companies in the same industry.
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Question 5 of 15 A payment of $2,250 is due in 2 years and $3,300 is due in 4 years. These two original payments are to be rescheduled with a payment of $1,950 in 1 year and the balance in 3 years. Calculate the payment required in 3 years for the rescheduled option. Assume that money earns 3.5% compounded monthly. $0.00 X Round to the nearest cent
The payment required in 3 years for the rescheduled option is approximately $3,378.09.To calculate the payment required in 3 years for the rescheduled option, we need to find the present value (PV) of the original payments and the rescheduled payment of $1,950 in 1 year.
Then, we can determine the balance in 3 years by calculating the future value (FV) of the difference between the PVs. We will assume a 3.5% annual interest rate compounded monthly.
Step 1: Convert the annual interest rate to a monthly rate and the years to months:
Monthly interest rate: (1 + 0.035)[tex]{(1/12)}[/tex]- 1 ≈ 0.002867
2 years = 24 months
4 years = 48 months
1 year = 12 months
3 years = 36 months
Step 2: Calculate the PV of the original payments:
PV_2years = $2,250 / (1 + 0.002867)²⁴ = $2,079.87
PV_4years = $3,300 / (1 + 0.002867)⁴⁸ = $2,891.74
Total PV_original = $2,079.87 + $2,891.74 = $4,971.61
Step 3: Calculate the PV of the rescheduled payment in 1 year:
PV_1year = $1,950 / (1 + 0.002867)¹²= $1,897.60
Step 4: Calculate the difference between the original and rescheduled PVs and find the FV in 3 years:
Difference = $4,971.61 - $1,897.60 ≈ $3,074.01
FV_3years = $3,074.01 * (1 + 0.002867)³⁶ = $3,378.09. Therefore, the payment required for the rescheduled option is approximately $3,378.09.
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The payment required in 3 years for the rescheduled option is $1,704.24.
To solve this problem, we can use the concept of present value and future value of money. The present value (PV) of a future payment is the amount of money that needs to be invested now at a given interest rate to grow to the future payment amount. The future value (FV) of a present payment is the amount of money that a payment will grow to at a given interest rate over a given period of time.
First, let's find the present value of the original payments of $2,250 due in 2 years and $3,300 due in 4 years, using the formula:
[tex]PV = \frac{FV}{(1+r)^n}[/tex]
where PV is the present value, FV is the future value, r is the interest rate, and n is the number of years.
For the payment of $2,250 due in 2 years:
[tex]PV = \frac{2,250}{\left(1 + \frac{0.035}{12}\right)^{2 \times 12}}[/tex] = $1,975.47
For the payment of $3,300 due in 4 years:
[tex]PV = \frac{3,300}{\left(1 + \frac{0.035}{12}\right)^{4 \times 12}}[/tex] = $2,692.33
Next, let's calculate the future value of the payment of $1,950 due in 1 year, which will be paid first before the balance is due in 3 years:
[tex]FV = 1,950 \times \left(1 + \frac{0.035}{12}\right)^{1 \times 12}[/tex] = $2,040.17
Now, we can use the formula for the present value of an annuity to find the present value of the remaining balance that will be paid in 3 years, given that the payment of $1,950 has already been made:
[tex]PV = P \times \frac{1 - (1+r)^{-n}}{r}[/tex]
where P is the payment, r is the interest rate, and n is the number of years.
We want to solve for P, so we can rearrange the formula to:
[tex]P = \frac{PV}{\frac{1 - (1+r)^{-n}}{r}}[/tex]
Substituting the values, we get:
[tex]PV &= \frac{2,692.33 + P}{(1 + \frac{0.035}{12})^{312}}[/tex]
[tex]PV &= \frac{2,040.17}{(1 + \frac{0.035}{12})^{212}}[/tex]
Solving for P, we get:
[tex]P &= PV \cdot \frac{1 - (1 + r)^{-n}}{r}[/tex]
[tex]P &= \frac{2,040.17 - 1,988.36}{\frac{1 - (1 + \frac{0.035}{12})^{-3\cdot12}}{\frac{0.035}{12}}}[/tex]
P = $1,704.24
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16. an increase in aggregate supply could be caused by: group of answer choices businesses paying more for health insurance for their workers. an increase in oil prices. a drop in energy costs from cheaper natural gas. an increase in government purchases. g
An increase in aggregate supply could be caused by C: a drop in energy costs from cheaper natural gas.
Aggregate supply refers to the total amount of goods and services produced in an economy at a given price level. Factors that can increase aggregate supply include improvements in technology, increased productivity, and lower input costs, such as energy costs.
In this scenario, cheaper natural gas leads to a drop in energy costs for businesses. When energy costs decrease, businesses can produce goods and services at a lower cost, which allows them to increase their overall production. As a result, the aggregate supply in the economy rises.
Options A (businesses paying more for health insurance for their workers) and B (an increase in oil prices) would actually decrease aggregate supply, as they lead to higher production costs for businesses. Option D (an increase in government purchases) impacts aggregate demand rather than aggregate supply, as it represents a change in the total spending on goods and services in the economy. Therefore, the correct option is C.
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16. an increase in aggregate supply could be caused by: group of answer choices
A. businesses paying more for health insurance for their workers.
B. an increase in oil prices.
C. a drop in energy costs from cheaper natural gas.
D. an increase in government purchases.
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lisa invests $5000 in a savings account with a fixed annual interest rate of 5% compounded quarterly. what will the account balance be after 10 years? (round to the nearest dollar)
The account balance will be $8,162 after 10 years.
Using the formula for compound interest, the balance after 10 years can be calculated as:
A = P * (1 + r/n)^(n*t)
A = the account balance after 10 years
P = the principal investment of $5000
r = the annual interest rate of 5% (expressed as a decimal)
n = the number of times the interest is compounded per year (quarterly compounding means n = 4)
t = the number of years (10 years in this case)
Plugging in the values:
A = 5000 * (1 + 0.05/4)^(4*10) = $8,162 (rounded to the nearest dollar)
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A case study in the chapter analyzed purchasing power party for several countries using the price of Big Macs. Here are data for a few mom countries
For each country, select the predicted exchange rate of the local currency per U.S. dollar. (Mint Recall that the u.. price of a Big Mac was $5.58) Country Price of a Big Mac Predicted Exchange Rate Actual Exchange Rate Costa Rica 2,290 colones 607 colones's Pakistan 460 rupees 139 rupees/ Thailand 119 bant 32 baht/s China 20.9 yuan 6.85 yuan/s New Zealand 6.20 NZS 1.48 NZ$$ According to purchasing power parity, the predicted exchange rate between the Pakistani rupee and the New Zealand dollar is Zealand dollar. However, the actual exchange rate is rupees per New Zealand dollar Grado It Now Save & Continue Continue without saving
Large Mac PPP is a colloquial statistic used to contrast the buying power of various currencies with the cost of a Big Mac at McDonald's. The Big Mac Index is another name for the Big Mac PPP. The cost of a Big Mac in that country's currency is used to compare currencies.
The Big Mac Index's purpose is what?To gauge the differences in consumer purchasing power between countries, the Big Mac Index was developed. The burger takes the place of the "basket of goods" that economists previously used to gauge variations in consumer pricing.
Which of the following keeps tabs on Big Mac prices globally?The Big Mac Index, a study conducted by The Economist, looks at the relative overvaluation or undervaluation of currencies using the relative cost of a Big Mac around the world.
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Nungesser Corporation's outstanding bonds have a $1,000 par value, a 9% semiannual coupon, 8 years to maturity, and an 8.5% YTM. What is the bond's price?
Nungesser Corporation's outstanding bonds have a $1,000 par value, a 9% semiannual coupon, 8 years to maturity, and an 8.5% YTM. $1,128.71 is the bond's price.
The price of Nungesser Corporation's outstanding bonds can be calculated using the present value of the bond's future cash flows. The present value of the bond's eight 9% semiannual coupon payments can be calculated by multiplying the coupon payment by the present value of an ordinary annuity factor, which is the present value of a series of equal payments.
The present value of the bond's future coupon payments is then discounted by the YTM of 8.5%, which results in the bond's price. The price of the bond is equal to the sum of the present value of the coupon payments and the present value of the par value at maturity. The price of Nungesser Corporation's outstanding bonds is $1,128.71.
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The price of the bond is $452.44.
Price = (C / 2) * [1 - (1 / (1 + YTM / 2)[tex]^(2 * n))][/tex]+ (F / (1 + YTM / 2)[tex]^(2 * n))[/tex]
Plugging in the values, we get:
Price = ($45 / 2) * [1 - (1 / (1 + 0.085 / 2)[tex]^(2 * 16))][/tex] + ($1,000 / (1 + 0.085 / 2)[tex]^(2 * 16))[/tex]
Price = $452.44
Bonds are a type of fixed-income security in which an investor loans money to a borrower, typically a corporation or government entity, for a set period of time at a fixed interest rate. In the business world, bonds serve as a source of financing for companies to raise capital for various purposes, such as funding projects, expanding operations, or refinancing existing debt.
Bond issuances can be either public or private, and are typically managed by investment banks or other financial institutions. Investors in bonds receive regular interest payments, typically paid out twice a year, and upon maturity, they receive their principal investment back. Bonds are generally considered to be less risky than stocks, as they offer a fixed return and are less volatile.
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Scenario Borrowing Method Bank Capital Frayer Bank typically has an abundance of funds in its accounts, but out of nowhere, several investors come to the bank looking to borrow a total of $45 million in funds that the bank simply does not have. The bank wants a temporary source of funds for two weeks and doesn't want to borrow from the federal funds market or a source outside of the United States. Bond Issuances Eurodollar Borrowing Federal District Banks Flow Financial Bank wants to temporarily sell $100 million worth of its Treasury bills, with an agreement to buy them back in one year for $102 million. Federal Funds Market Repurchase Agreements First Guaranty Bank wants to borrow funds to purchase a $22 million building for its new branch location and wants to issue long-term securities to cover the financing of the new branch location. Diligence Bank has a shortage of funds and wants a temporary source of funds for two days to make up the difference. They have great relationships with banks outside of the United States and want to borrow funds from Deutsche Bank in Germany. True or False: The majority of all United States bank liabilities are made up of sources other than deposit accounts. True False
Its false because in the given scenario, Frayer Bank is looking to use a borrowing method to acquire $45 million in bank capital for two weeks without relying on the federal funds market or sources outside the United States.
Flow Financial Bank, on the other hand, wants to engage in repurchase agreements, temporarily selling $100 million worth of Treasury bills and buying them back in one year for $102 million.First Guaranty Bank aims to issue long-term securities to finance a new branch location, while Diligence Bank seeks a temporary source of funds for two days by borrowing from Deutsche Bank in Germany.
Regarding United States bank liabilities, the majority of them are made up of sources other than deposit accounts. True or false? False.
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a cell phone manufacturer wants to assemble a team to market a new cell phone across the country. a(n) group would be best for this purpose.
A cell phone manufacturer wants to assemble a team to market a new cell phone across the country. A cross-functional group would be best for this purpose.
A cross-functional team consists of members with diverse skill sets, backgrounds, and expertise, all working together towards a common goal. In this case, the goal is to market a new cell phone across the country.
By assembling a cross-functional team, the cell phone manufacturer can ensure that all aspects of the marketing campaign are effectively addressed. The team can include members from various departments such as marketing, sales, product development, and customer support. This diversity enables the team to develop a comprehensive marketing strategy that takes into account the unique strengths and challenges of the product, as well as the preferences and needs of the target audience.
The team can leverage the expertise of each member to create a cohesive, well-rounded approach to marketing the new cell phone. For instance, product developers can provide insights into the device's features, while marketing professionals can develop effective promotional campaigns. Sales representatives can provide input on the best distribution channels and strategies, and customer support can help address potential concerns from users.
By collaborating across departments and sharing knowledge, the cross-functional team can create a synergistic effect that allows them to achieve their goal of successfully marketing the new cell phone across the country. This approach also helps to improve communication, enhance decision-making, and foster innovation within the organization.
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You borrow money on a self liquidating installment loan (equal payments at the end of each year, each payment is part principal part interest) Loan amount $923,000 Interest Rate 10.3% Life 50 years Date of Loan January 1, 2021 Use the installment method - not straight line Do NOT round any interrmediate numbers. Do NOT turn this into a monthly problem. Do NOT put in minus signs, answer all positive numbers. What is the annual payment (round to the nearest $)?
The annual payment for the self-liquidating installment loan is approximately $95,248 (rounded to the nearest dollar).
let's find the annual payment for the self-liquidating installment loan. Here are the given details:
- Loan amount: $923,000
- Interest rate: 10.3%
- Loan term: 50 years
- Date of loan: January 1, 2021
- Installment method: Not straight line
To calculate the annual payment, we'll use the formula:
Annual payment = P × (r × (1 + r)^n) ÷ ((1 + r)^n - 1)
Where:
P = Loan amount
r = Interest rate per period (annual)
n = Number of periods (years)
Step 1: Convert the interest rate into a decimal by dividing it by 100.
10.3% ÷ 100 = 0.103
Step 2: Plug in the values into the formula.
Annual payment = $923,000 × (0.103 × (1 + 0.103)^50) ÷ ((1 + 0.103)^50 - 1)
Step 3: Calculate the values within the parentheses.
(1 + 0.103)^50 ≈ 470.386
Step 4: Substitute the calculated value back into the formula.
Annual payment = $923,000 × (0.103 × 470.386) ÷ (470.386 - 1)
Step 5: Calculate the numerator and the denominator.
Numerator = 0.103 × 470.386 ≈ 48.4498
Denominator = 470.386 - 1 ≈ 469.386
Step 6: Divide the numerator by the denominator and multiply it by the loan amount.
Annual payment = $923,000 × (48.4498 ÷ 469.386) ≈ $95,248.49
The annual payment for the self-liquidating installment loan is approximately $95,248 (rounded to the nearest dollar).
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7. A country has the following rates of unemployment. 1. Cyclical = 5% 2. Frictional = 2% 3. Structural = 1% The Natural Rate of Unemployment is ... 3% O 1% 2% O 5%
The Natural Rate of Unemployment in this country is 3%.
1. Cyclical unemployment is 5%. This type of unemployment occurs due to fluctuations in the business cycle and is not part of the Natural Rate of Unemployment.
2. Frictional unemployment is 2%. This type of unemployment occurs when people are transitioning between jobs, entering the workforce, or searching for new opportunities.
3. Structural unemployment is 1%. This type of unemployment results from a mismatch between the skills of the workforce and the available job opportunities, often due to changes in technology or industry demands.
To find the Natural Rate of Unemployment, add the Frictional and Structural unemployment rates:
Natural Rate of Unemployment = Frictional Unemployment + Structural Unemployment
Natural Rate of Unemployment = 2% + 1%
Therefore, the Natural Rate of Unemployment in this country is 3%.
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The Natural Rate of Unemployment is the sum of the frictional and structural unemployment rates, which is 3% in this case. Therefore, the answer is 3%.
The Natural Rate of Unemployment refers to the rate of unemployment that exists when the labor market is in equilibrium and there are no cyclical fluctuations in the economy.
It is the sum of the frictional and structural unemployment rates in an economy. In the given scenario, the country's natural rate of unemployment would be 3%, which is the sum of the frictional rate of 2% and the structural rate of 1%.
The cyclical rate of 5% indicates that the economy is currently experiencing a downturn or recession, which is characterized by a higher-than-normal unemployment rate. As the economy recovers, the cyclical rate of unemployment should decrease and eventually return to the natural rate of 3%.
Therefore, the Natural Rate of Unemployment in this country is 3%.
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Su- Lin is the CEO of a large shipping company, the company has been contacted to carry a large shipment of argyle diamonds from the Port of Darwin to the Port of Melbourne. The diamonds are valued at $10 million.
Su-Lin asks Sarah to ensure that there is a contract for marine insurance entered into for the diamonds and to ensure that the insurance covers the risk of piracy.
Sarah phones Marine Insurance Co. Pty Ltd and discusses with Steven the proposed coverage. Steven advises that the insurance contract will cost $1,000 for the voyage and given the high risk of piracy off the coast of Sydney, to ensure against piracy there will be a premium of $200.
Sarah, says that they will pay the premium.
Steven does not issue any written contract.
Pirates board the ship off Mosman and steal the diamonds.
Advise
Sue-Lin is there a contract of Marine Insurance in place give your reasons.
Yes, Sue-Lin, there appears to be a contract of marine insurance in place for your large shipping company's shipment of argyle diamonds.
The contract was formed when Sarah contacted Marine Insurance Co. Pty Ltd and discussed the proposed coverage with Steven. Steven provided the terms of the insurance, including the cost of $1,000 for the voyage and an additional $200 premium for piracy coverage, which Sarah agreed to pay. Although Steven did not issue any written contract, the agreement between Sarah and Steven through their phone conversation likely constitutes a valid oral contract.
However, it is important to note that the absence of a written contract may cause complications in enforcing the insurance coverage if a dispute arises.
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Sponsors of real estate deals often raise money from many partners. To avoid cumbersome federal regulatory filings (by meeting exemptions under Reg. D), these offerings are often limited to: Ch18
a. "Accredited" investors
b. Broker dealer networks
c. Licensed CPA's and investment advisors
d. Real estate professionals
In order to avoid complex federal regulatory filings and comply with exemptions under Regulation D, these offerings are often limited to "accredited" investors (option a).
Sponsors of real estate deals frequently raise money from multiple partners to finance their projects.
Accredited investors are individuals or entities with a certain level of financial sophistication, which allows them to participate in higher-risk investments. By limiting offerings to accredited investors, sponsors can meet the requirements of Regulation D and bypass some of the more cumbersome filing processes. This enables sponsors to efficiently raise funds while ensuring that their investors are well-informed and capable of handling the associated risks.
Thus, the correct choice is A- "Accredited" investors
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The Albertson’s Corporation is considering the purchase of a new technology to help expand its current sales of oil-pipe fringes. The cost of the technology installed is $150,000,000. The company estimates that the present value as of the end of year one of all its future cash flows (including the CF1) is $282,000,000 if the project is successful and $77,000,000 if it’s not. The company assigns a 45% chance to success. The RRR (aka WACC) on the project is 15%.
a. Given the above information and based on static analysis, should the company go ahead with its investment?
b. Upon further study the company realizes that, if the project was not successful, it can stop production and sell the equipment for an after-tax salvage value of $92,000,000 (assume that includes the first year CF). Given this information, should the company go ahead with the investment?
c. What is the present value of the option to abandon?
The answers are (a) Expected PV = [tex](0.45 * $282,000,000) + (0.55 * $77,000,000) = $168,150,000[/tex] ,(b) Expected PV = [tex](0.45 * $282,000,000) + (0.55 * ($77,000,000 + $92,000,000/(1+15)^1)) = $189,350,130[/tex], and (c) Present value of option to abandon = [tex]$189,350,130 - $168,150,000 = $21,200,130.[/tex]
a. Based on static analysis, the company should invest in the project only if the expected present value of future cash flows exceeds the initial cost of the technology. The expected present value of future cash flows is calculated as the probability-weighted average of the present values of cash flows in the success and failure scenarios:Expected PV =[tex](0.45 * $282,000,000) + (0.55 * $77,000,000) = $168,150,000[/tex]Since the expected present value of cash flows is less than the cost of the technology, the company should not go ahead with the investment.b. When the option to abandon the project is included, the expected present value of cash flows changes. In the failure scenario, the company can abandon the project and sell the equipment for $92,000,000. This option to abandon the project has value since it reduces the downside risk of the project.The expected present value of cash flows with the option to abandon is calculated as follows:Expected PV = ([tex]0.45 * $282,000,000) + (0.55 * ($77,000,000 + $92,000,000/(1+15)^1)) =$189,350,130[/tex]The expected present value of cash flows with the option to abandon is greater than the cost of the technology, so the company should go ahead with the investment.c. The present value of the option to abandon is calculated as the difference between the expected present value of cash flows with the option and the expected present value of cash flows without the option:Present value of option to abandon = [tex]$189,350,130 - $168,150,000 = $21,200,130[/tex]This means that the option to abandon is worth $21,200,130 in present value terms.For more such question on abandon option
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as a project manager, you're an expert at determining which tasks are most critical to the success of a project and helping team members identify and break down large tasks into smaller steps. what project management value does this represent?
The project management value that is represented by the ability to determine which tasks are most critical to the success of a project and helping team members identify and break down large tasks into smaller steps is "focus on results and outcomes."
By identifying critical tasks and breaking them down into smaller steps, the project manager is able to keep the focus on the end goal and ensure that team members are working towards achieving that goal. This involves understanding the project requirements, identifying the key success factors, and developing a plan to achieve those factors.
The project manager is also able to communicate this focus on results and outcomes to the team, providing clear direction and guidance on what needs to be achieved and how it will be achieved. By doing so, the team members are able to work more effectively towards the end goal, making progress and achieving success in a more efficient manner.
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Ellie is 30 years old and just started working for Microsoft. She is paid on the 1st of each month. Upon receipt of her gross monthly salary of $9,000, she immediately contributes $1,000 to the Group Registered Retirement Savings Plan (RRSP) where at the same time, the company matches her contribution. She guesses that she could earn 6% interest compounded weekly over this period. a) If she continues to do so for the next 35 years, how much will she have accumulated in her RRSP for her retirement? (1 mark) Calculate the amount that Ellie will receive: (1 mark) Page 6 of 9 b) For group insurance, Microsoft pays for Long Term Disability (LTD) insurance but requires Ellie to pay for Short Term Disability (STD) Insurance. STD and LTD plans vary per employer. Most STD plans cover 75% of gross salary for sixteen weeks, and then 65% of gross salary potentially to age 65 for LTD, which is also how Microsoft's group insurance pays out. Explain to Ellie the benefits of disability insurance. (.5 marks) c) Ellie was out of work on Short Term Disability leave for one month while she recovered from COVID. How much did Ellie receive from Microsoft during this one month while on leave? (.5 marks) Calculate the amount that Ellie will receive: (.5 marks)
a) Ellie contributes $1,000 per month to her Group RRSP, and the company matches her contribution.
Therefore, her total monthly contribution to the RRSP is $2,000. Assuming that Ellie continues to do so for the next 35 years, with an interest rate of 6% compounded weekly, we can calculate the future value of her RRSP using the formula for compound interest:
[tex]FV = PV x (1 + r/n)^(n×t)[/tex]
where PV is the present value (the amount contributed each month), r is the interest rate, n is the number of times the interest is compounded per year, and t is the number of years.
In this case, PV = $2,000, r = 6%/52 (since the interest is compounded weekly), n = 52 (since there are 52 weeks in a year), and t = 35. Plugging in these values, we get:
[tex]FV = $2,000 x (1 + 0.06/52)^(52×35) = $2,000 x 181.90 = $363,802.36[/tex]
Therefore, after 35 years of contributing $1,000 per month to her Group RRSP and receiving a matching contribution from Microsoft, Ellie will have accumulated $363,802.36 in her RRSP for her retirement.
b) Disability insurance provides financial protection to employees who are unable to work due to illness or injury. In Ellie's case, Microsoft pays for Long Term Disability (LTD) insurance, which can provide her with 65% of her gross salary potentially until she reaches age 65 if she is unable to work due to a disability.
Ellie is required to pay for Short Term Disability (STD) insurance, which can provide her with 75% of her gross salary for up to sixteen weeks if she is unable to work due to a disability.
The benefits of disability insurance are that it can provide financial security to employees who are unable to work due to illness or injury. Without disability insurance, an employee may have to rely on their savings or other sources of income if they are unable to work.
Disability insurance can help cover the costs of living expenses and medical bills, and it can also provide peace of mind knowing that there is a financial safety net in case of a disability.
c) If Ellie was out of work on Short Term Disability leave for one month while she recovered from COVID, she would receive 75% of her gross salary for that month from Microsoft's STD insurance plan. Since Ellie's gross salary is $9,000 per month, her STD benefit for one month would be:
STD benefit = 75% x $9,000 = $6,750
Therefore, Ellie would receive $6,750 from Microsoft's STD insurance plan for the one month that she was out of work on Short Term Disability leave.
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These two things are at the core of the balanced Scorecard. Organizational culture and vision Business performance and competitive advantage Organizational vision and strategy
The two things that are at the core of the balanced Scorecard are Organizational vision and strategy.
The balanced scorecard entails measuring 4 major factors of a commercial enterprise: Learning and growth, commercial enterprise processes, customers, and finance. BSCs permit groups to pool records in a unmarried report, to offer records into provider and first-class further to economic performance, and to assist enhance efficiencies. The capabilities of the Balanced Scorecard: Clarify and speak commercial enterprise priorities and targets to the complete organization. Define and control motion plans to make certain that there are sports and packages with the intention to supply the strategic targets. Monitor and degree development on strategic targets.
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The two things that are at the core of the balanced Scorecard are organizational culture and vision, and business performance and competitive advantage.
Organizational culture refers to the shared values, beliefs, behaviors, and attitudes that shape how people work together and interact within an organization. A strong organizational culture can help to drive employee engagement, productivity, and retention, which are all critical factors for achieving long-term success. On the other hand, an unhealthy or toxic culture can have a detrimental effect on employee morale, performance, and overall business outcomes.
Vision is also a critical component of the balanced Scorecard, as it provides a clear and compelling direction for the organization to follow. A well-defined vision can help to align employees and stakeholders around a common purpose and inspire them to work towards a shared goal. In addition, it can help to drive innovation and creativity by encouraging employees to think outside the box and pursue new ideas and opportunities.
In summary, a strong organizational culture and vision are essential for driving business performance and competitive advantage. By focusing on these core components, organizations can build a foundation for long-term success and achieve their strategic objectives.
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Resources are scarce therefore the value maximization
is stretched. Discuss
Resources are scarce, and as a result, value maximization becomes stretched because the opportunity cost of using a resource for one purpose rather than another increases.
Scarcity refers to the limited availability of resources, which leads to a competition among individuals, businesses, and nations to acquire these resources. Due to scarcity, economic agents need to make choices about how to allocate resources efficiently, leading to the concept of value maximization. Value maximization is the process of optimizing the use of scarce resources to generate the greatest possible value, often measured in terms of profit, utility, or welfare. When resources become scarcer, it becomes increasingly difficult to achieve this goal, as more trade-offs and compromises need to be made.
As scarcity intensifies, the opportunity cost of using a resource for one purpose rather than another increases, forcing decision-makers to prioritize and make more careful choices. This stretching of value maximization can lead to tougher competition and innovation, as businesses and individuals seek new ways to make the most of their limited resources. However, it can also result in negative consequences, such as resource depletion and social inequity, if the focus is solely on short-term maximization rather than long-term sustainability and well-being.
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Identify the correct sequence of events in organizational strategic planning. - Goals, Processes, Technology, Profits - Available Technology, Goals, Mission Objectives - Mission Available Technology, Objectives, Environmental Analysis - Mission, Environmental Analysis, Goals, Objectives
The correct sequence of activities in organizational strategic planning is mission, Environmental analysis, goals, objectives.
The first step in strategic planning is to outline the business enterprise's mission, which is a declaration that outlines the corporation's purpose, values, and common course.
Subsequent, an environmental analysis is conducted to identify external factors that may impact the business enterprise's ability to attain its project, which includes financial developments, competition, and regulatory modifications.
Based on the mission and environmental analysis, precise goals are mounted to manual the corporation's movements and decisions.
Finally, objectives are identified with a purpose to assist the enterprise obtain its desires, and techniques are evolved to perform the ones objectives.
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The correct sequence of events in organizational strategic planning is Mission, Environmental Analysis, Goals, and Objectives.
The organization's goals and core beliefs are outlined in the mission statement. The environmental analysis looks at both internal and external elements that might have an impact on how successful an organization is. The objectives are the precise, quantifiable steps required to carry out the particular, long-term consequences that the organization has set as its goals. This process guarantees that the organization has a clear grasp of its goals and values, the possibilities and difficulties it must overcome, and a plan for accomplishing its objectives.
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