What defines marginal utility? the gain (or loss) from an increase (or decrease) in the consumption of that good or service. Economists sometimes speak of a law of diminishing marginal utility, meaning that the first unit of consumption of a good or service yields more utility [ than the second and subsequent units. Marginal cost: the change in total cost that arises when the quantity produced changes by one unit. That is, it is the cost of producing one more unit of a good. [1] What will
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services directly are called real assets. A firm requires real assets to carry on its business. Real assets can be tangible or intangible. For example, house, building, equipment, inventories and durable goods. * Financial asset:- Assets that does not produce goods and services but generate income are called financial assets. For example, bonds, stocks, note, mortgage and other claims or real assets as well as securities. * Perfect capital market:- A perfect capital market exists if the
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TABLE OF CONTENTS DECLARATION ii LIST OF ABBREVIATIONS iii CHAPTER ONE: INTRODUCTION 1 1.1 Background 1 1.1.1 Derivatives 2 1.1.2 Foreign Currency Exposure of a Commercial Bank 3 1.1.3 Effect of derivatives on foreign exchange exposure 5 1.1.4 Commercial Banks in Kenya 6 1.2 Research Problem 7 1.3 Objectives of the Study 8 1.4 Value of the Study 9 CHAPTER TWO: LITERATURE REVIEW 10 2.1 Introduction 10 2.2 Theoretical review 10
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teachers in grades 9–12 Economics studies how people, acting as individuals or in groups, decide to use scarce resources to satisfy wants. This fundamental economic concept of scarcity is at the core of the discipline. There are never enough natural resources, human resources, or capital resources (man-made goods such as tools, equipment, machinery, factories) to produce everything society wants. Therefore, choices must be made on what to produce, how to produce, and for whom to produce. Choices
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Harvard Business School 9-291-026 Rev. October 29, 1993 Note on Bank Loans Bank loans are a versatile source of funding for businesses. For example, these loans can be structured either as short- or long-term, fixed or floating rate, demand or with a fixed maturity, and secured or unsecured. While each potential borrower's business is unique, reasons to borrow generally include the purchase of assets including new fixed assets or entire businesses, repayment of obligations, raising of temporary
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Chapter Exchange Rate Determination and Forecasting QUESTIONS 1. What is the difference between the ex ante and the ex post real interest rate? 10 Answer: The ex post interest rate corrects the nominal interest rate with the realized or ex post rate of inflation; whereas the ex-ante (or expected) real interest rate corrects the nominal interest rate for expected inflation. As a lender, you care about the real return on your investment, which is the return that measures your increase in purchasing
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tools, relative ease of its decision process and the sheer nature of the sector which propagates its effect to the real economy – the financial system. The main objective of monetary policy in Nigeria is to ensure price and monetary stability. This is mainly achieved by causing savers to avail investors of surplus funds for investment through appropriate interest rate structures; stemming wide fluctuations in the exchange rate of the naira: proper supervision of banks and related institutions to
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CAPITAL AND CAPITAL STRUCTURE LEARNING OBJECTIVES The specific objectives of this chapter are to: l explain how corporate and country characteristics influence an MNC’s cost of capital, explain why there are differences in the costs of capital among countries, and explain how corporate and country characteristics are considered by an MNC when it establishes its capital structure. l l An MNC finances its operations by using a mixture of fixed interest borrowing and equity financing that can minimize
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address the many aspects of financial decision making within global firms prompted by these changes that are not addressed in traditional materials. The paper provides an overview of the structure of the course and its seven modules with particular emphasis on the three modules that constitute the core of the course. The paper also describes an analytical framework that has been developed through the creation of the course materials to guide critical financial decisions on financing, investment, risk management
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particular foreign country. Country risks include foreign exchange risk, political risk, and cultural risk. 1.3 What is foreign exchange risk? Foreign exchange (or currency) risk is the risk of unexpected changes in foreign currency exchange rates. 1.4 What is political risk? Political risk is the risk that a sovereign host government will unexpectedly change the rules of the game under which businesses operate. 1.5 In what ways do cultural differences impact the conduct of international
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