1.If a firm expects a blockage of funds implemented by a host government to be temporary,...

1.If a firm expects a blockage of funds implemented by a host government to be temporary, which of the following can be considered as a forced reinvestment?

Select one:

a. a lumber cutting company decides to invest in a paper mill with blocked funds

b. None

c. An automobile company reinvests its funds by buying businesses who supply it with parts and showrooms.

d. Investing in local short-term debt instruments and short-term loans

2.There are various determinants of the foreign exchange rate. Which of the approaches postulates that the FX rate is determined by demand and supply of different types of financial assets?

Select one:

a. balance of payments

b. asset market

c. law of one price

d. monetary

Expert Solution

Rahul Sunny answered 8 months ago

Pension funds pay lifetime annuities to recipients. If a firm expects to remain in business indefinitely,...

Pension funds pay lifetime annuities to recipients. If a firm expects to remain in business indefinitely, its pension obligation will resemble a perpetuity. Suppose, therefore, that you are managing a pension fund with obligations to make perpetual payments of $2 million per year to beneficiaries. You consider using the following two bonds to immunize your obligation. Assume the yield to maturity on all bonds is 10%. Bond Par Maturity Coupon Yield to Maturity A 1,000 5-year 10%, Annual Payment 10%...

1.) Why does a temporary increase in government spending cause the current account to fall by...

1.) Why does a temporary increase in government spending cause the current account to fall by a smaller amount than does a permanent increase in government spending? Explain with reference to a DD-AA graph with an XX line included. (Hint: Draw an XX line which shows every combination of E and Y at which the current account is balanced, i.e. X = IM and NX = 0. Assume we start at an equilibrium E and Y on that line. Now,...

1....The treasurer of ABC Imports expects to invest $3,000 of the firm's funds in a long-term...

1....The treasurer of ABC Imports expects to invest $3,000 of the firm's funds in a long-term investment vehicle at the end of each month for the next 2 years. He expects that the company will earn 8% interest that will compound monthly. The value that these payments should have at the end of the 2-year period is calculated as: Select one: a. $77,799.57 b. $102,436.10 c. $53,811.37 d. $75,206.25 e. $171,269.61 2.... If I want to buy a new computer...

A temporary government spending shock. a) Suppose the government very temporarily, and unexpectedly, increases its purchases...

A temporary government spending shock. a) Suppose the government very temporarily, and unexpectedly, increases its purchases of goods. (Assume the government finances these temporary purchases by issuing additional debt. Assume the government only purchases goods—it does not produce goods, or employ labor directly.) Explain the impact in both the goods and labor markets today. What happens to consumption demand, investment demand, aggregate demand, and aggregate supply? What happens to the market-clearing real interest rate, output, consumption and investment? Illustrate graphically....

1. If the Canadian government decreases the governmental expenditures, then in the market for loanable funds...

1. If the Canadian government decreases the governmental expenditures, then in the market for loanable funds Select one: a. The real interest rate increases and the investment decreases b. The real interest rate decreases and the investment increases c. The real interest rate increases and the investment increases d. The real interest rate decreases and the investment decreases 2. Suppose that the disposable income increases by 10 units, how much is the change in the consumption level if the Consumption...

The Government had implemented minimum wage of RM1,200.00 in 57 cities and towns effective 1 January...

The Government had implemented minimum wage of RM1,200.00 in 57 cities and towns effective 1 January 2020. Describe how the new wage will benefit employees in the urban areas. Discuss the consequences to the economy of country.

1. With a full capacity, the need of additional funds of a firm is reduced by...

1. With a full capacity, the need of additional funds of a firm is reduced by a) Spontaneous growth of current liabilities b) Spontaneous growth of current assets c) A sharp increase in forecasted sales d) A moderate growth of dividends 2. For any positive growth in forecasted sales, which of the following firm will most likely require no immediate financing? a) Firms with short production cycles b) Firms with an under-utilization of its fixed assets c) Firms with a...

What was the effect of the government policies implemented to recover from the recession?

1. The Market for Loanable Funds: A claim to partial ownership in a firm A certificate...

1. The Market for Loanable Funds: A claim to partial ownership in a firm A certificate of indebtedness The market in which those who want to save supply funds and those who want to borrow to invest demand funds Financial institutions through which savers can directly provide funds to borrowers Question 2 Financial Markets: The market in which those who want to save supply funds and those who want to borrow to invest demand funds A certificate of indebtedness Financial...

15. Total Ghana has a temporary need for funds. Management is trying to decide between taking...

15. Total Ghana has a temporary need for funds. Management is trying to decide between taking discounts from one of their suppliers or a 14.75% per annum renewable discount loan from its bank for 3 months. The suppliers' terms are as follows. GNPC 1/10, net 30. BOST 2/15, net 60. Tema Oil Refinery net 90. Assume 360-day year, the cheapest source of short-term financing is * (a) The bank (b) GNPC (c) BOST (d) Tema Oil refinery

Question