Response:
The yearly average return stands at 9.6 %
Clarification:
Calculating the average return
Assuming the price per share is 100
Initial Growth Final
Value % Value
Company A 50 % at 100 5,000 8 % 5,400
Company B 30 % at 100 3,000 12 % 3,360
Company C 20 % at 100 2,000 10 % 2,200
Total amounts 10,000 10,960
To find the average return, take the increase in value over the base, divided by the base
10,960 - 10,000 = 960/ 10000 = 9.6 % average return
Answer:
The answer is $59.50.
Explanation:
The calculations based on the scenario are as follows:
Profit on futures price = After futures price - before futures price
$63.50 - $59
= $4.50
Thus, the effective price that the company pays can be calculated using this formula:
Effective price paid = Spot price in July - Gain on futures price
= $64 - $4.50
= $59.50
Answer:
The opportunity cost for Janet to create a pizza amounts to 0.67 gallons of root beer, while for Megan it is 0.71 gallons of root beer.
Janet possesses an absolute advantage in pizza making, and Janet also has a comparative advantage in this activity.
When it comes to trading, Janet will exchange pizza for root beer. The price of pizza can be represented by the amount of root beer in gallons. To ensure both roommates benefit, the highest trade price for pizza is 0.71 gallons of root beer, while the minimum price allowing for mutual benefit is 0.67 gallons of root beer per pizza.
Explanation:
For Janet, the cost to produce one gallon of root beer is 3/2, which equals 1.5 pizzas.
Janet's cost for making a pizza is calculated as 2/3, resulting in 0.67 gallons of root beer.
As for Megan, her cost to produce a gallon of root beer is 7/5, translating to 1.4 pizzas.
Megan's cost of producing a pizza is 5/7, which equals 0.71 gallons of root beer.
Opportunity costs represent the additional expenses or benefits forfeited when electing one action or investment in place of another option. For instance, Janet can create either 1.5 pizzas or 1 gallon of root beer in a span of 3 hours, but she cannot accomplish both simultaneously; she must make a choice between the two options.
Response:
-11.8%
Clarification:
to resolve this problem, it's important to keep in mind that a bond's worth is primarily determined by figuring out the present value of its cash flow sequence. Therefore, consider a bond in terms of you being the creditor; you would earn interest from the loaned amount (the coupon), and after n years, you'd receive back the initial amount lent (the principal). Applying the relevant formula, we get the value of the bond as follows:
in this specific scenario, there are 29 years left until it matures after one year, thus we have:
given that the interest rate is higher, the return on the investment is as follows:
