estimates seem to cost much less, but rising, according Bloomberg, Harvey is set to cost around $75 billion dollars in economic losses. The damages rose up $33 billion dollars the previous day. Gasoline prices have skyrocketed from the Hurricane. For example, AAA reported that the
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country without a central bank at the top in like a human body without a head. In the words of R.P. Kene “central bank is an institution charged with the responsibility of managing the entire monetory and banking affairs of the country in the nation’s interest.” The Central bank is generally recognized as a bank which constitutes the apex of its monetory structure, controls, directs and equalates the activities of other banks operating in the economy. A central bank has direct dealings with the governments
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1. What is the currency risk exposure facing Merton? What dimension is more relevant in the case of Merton: transaction exposure, translation exposure, or economic exposure? Merton Electronics is a company in the United States that imports from both Japanese and Taiwanese suppliers, to then be distributed nationally. Both suppliers invoice in their local currencies (Japanese Yen and Taiwanese Dollars, respectively). The mechanics of payments are as follows: Merton places an order, and the Asian
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expected average life of the proposed security. ii. Total principal and interest payments over the life of the proposed security. The sinking fund provision does not affect the total principal payments that investors would receive. However, investors may receive their principal repayments earlier than expected if the firm invokes the sinking fund provision. The sinking fund provision could decrease the amount of interest payments investors would receive since an early retirement of a bond under
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Advantages: Easiest to start, least regulated, single owner gets all profits, taxed as personal income Disadvantages: Limited to life of owner, equity capital limited to owner’s personal wealth, unlimited liability, difficult to sell ownership interest Partnership: Similar to sole proprietorship, except the business has more than one owner. Advantages: more capital available and relatively easy to start, taxation is simple (each owner reports their percentage of income Disadvantages:
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for the launch of another brand, before the fall in utility and sales is experienced. The launch of new brand ensures that the revenue trend of the business does not fall. Diminishing utility is among the external factors affecting business. For example, when we buy a pizza, the first few slices give us immense satisfaction. However, there is a fall in the satisfaction levels, when we are eating the rest. Let's assume, the marginal utility derived on the consumption of the first slice was 90. However
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included in this discussion. The last thing that will be discussed is the exchange rates. The significance of currency devaluations concerning the United States, as well as other countries will be the last thing discussed. Now, to discuss derived demand. Derived demand is the product that is produced by labor for a consumer (McConnell, Brue, Flynn, 2010). This demand can be an increase or a decrease. A good example of this is business that sells DVD’s. When a customer comes in asking for a certain
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services or other monetary units with which that currency can be exchanged. ‘Devaluation’ means official lowering of the value of a country's currency within a fixed exchange rate system, by which the monetary authority formally sets a new fixed rate with respect to a foreign reference currency. There many reasons for devaluation, and but most have severe consequences that do more harm than good. One of the main reasons a country devalues its currency is to increase its ability to bring in production
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a firm? A. employees' benefits B. satisfaction of customers C. satisfaction of suppliers D. prompt payment to creditors * E. maximize stockholder wealth 2. Financial risk involves ___. A. fluctuation in exchange rates B. different interest and inflation rates C. balance of payments position D. A and B * E. A, B, and C 3. Three sweeping changes include ___. A. the end of Cold War B. industrialization and growth of the developing world C. the creation of the North American
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RBI will buy dollars and inject rupee liquidity into the economy. This, of course, is different from imposing controls to turn capital flows away, which we do not expect. Why? Well, the RBI must generate more money to fund growth at reasonable interest rates. Its 100-basis-point hike in cash reserve ratio has pulled money growth down to a tight 15% level. This is clearly insufficient to fund loan demand growing at 20%. Won’t this fuel inflation? Not really. Some monetary expansion is necessary for
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