Answer:
Martin has a recognized gain on the transfer of $40,000 and a basis of $0 for his stock.
Explanation:
Martin's gain = liability assumed on the real estate transfer - real estate basis = $300,000 - $260,000 = $40,000
Martin's basis for his stock = real estate basis + recognized gain - liability assumed on the real estate transfer = $260,000 + $40,000 - $300,000 = $0
In this case the corporation assumed a liability, and the basic accounting equation is:
assets = liabilities + equity
If the liability's value offset the asset value, then there is no increase in equity.
A monopolistically competitive firm will increase its production if Select one: a. price is greater than average total cost. b. marginal revenue is greater than marginal cost. c. marginal revenue is greater than average total cost. d. price is greater than marginal cost.
A monopolistically competitive firm will increase its production when the marginal revenue (additional income from selling one more unit of a good) is greater than the marginal cost (cost of producing one more unit).
Explanation:A monopolistically competitive firm is one that sells products that are differentiated from one another in some way. The firm will increase its production when the marginal revenue is greater than the marginal cost. This is due to the reason that the marginal cost represents the cost of producing one additional unit of a good, while marginal revenue represents the additional revenue that will be earned from selling this additional unit. When marginal revenue exceeds marginal cost, the firm can increase profits by producing and selling more, thus the firm will increase production in this scenario.
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A monopolistically competitive firm will increase its production when the additional revenue from selling an extra product exceeds the cost of producing it. Specifically, the increase happens where marginal revenue (MR) > marginal cost (MC). Production continues until MR = MC, and if the price is above average total cost, the firm earns profits.
Explanation:A monopolistically competitive firm, like any profit-maximizing firm, will increase its production when its marginal revenue (MR) is greater than its marginal cost (MC). This basic economic principle holds because any situation where the income gained from selling an additional product (MR) outweighs the cost of producing that extra product (MC) is a profitable situation, and firms naturally want to maximize their profits.
The firm will keep increasing its production as long as the next produced unit adds more to revenue than it adds to cost. Once MR = MC, the firm identifies its profit-maximizing level of output. If the price determined by the market demand curve for that output level is above average total cost, the firm makes positive profits.
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In April 2017, the working-age population of the United States was 254.6 million. The working-age population is divided into those in the labor force (160.2 million) and those not in the labor force (94.4 million). The labor force is divided into the employed (153.2 million) and the unemployed (7.1 million). Those not in the labor force are divided into those not available for work (88.7 million) and those available for work (5.7 million). Finally, those available for work but not in the labor force are divided into discouraged workers (0.5 million) and those currently not working for other reasons (5.2 million).Use this data to help determine which one of the following statements is true:
population of the United States was 254.6 million. The working-age population is divided into those in the labor force (160.2 million) and those not in the labor force (94.4 million). The labor force is divided into the employed (153.2 million) and the unemployed (7.1 million). Those not in the labor force are divided into those not available for work (88.7 million) and those available for work (5.7 million). Finally, those available for work but not in the labor force are divided into discouraged workers (0.5 million) and those currently not working for other reasons (5.2 million).
Use this data to help determine which one of the following statements is true:
The unemployment rate is
7.1 million / 160.2 million×100=4.4%.
The labor force participation rate is
160.2 million /
254.6 million×100=62.9%.
N.B
Check the attachment for full question
Answer:
D. Both A and B are correct
Explanation:
The unemployment rate is 4.4%
That is unemployed/labour force = (7.1million/160.2 million ) * 100 = 4.4%
Labour force participation rate is 62.9%
That is: total labour force /total population = (160.2million/254.6million) * 100 = 62.9%
An e-mail message from a manager to an employee that reads "please stop by my office at your convenience" is likely to be perceived differently than a message that reads "report to my office immediately." This is based on the external factor of:
Answer:
intensity
Explanation:
Answer:
Intensity
Explanation:
The more intense an eternal factor such as loud noises and bright lights are, they more it is likely to be perceived that way by an individual. In an office setting, when a line manger sends an email to his or her direct report, asking him or her to come to the office at the employees convenience, it would not have the same intensity and high sense of urgency compared to a situation in which the same email be restructured to ask the same employee, by the same line manager, to come to the office “immediately”
What should you do to prepare for the interview?
a. Select bold-colored clothes the night before.
b. Call the hiring manager to discuss the position.
c. Visit the company’s website to learn more about the organization.
Answer:
c. visit the company's website to learn more about the organization.
Explanation:
To prepare for an interview , the interviewee must visit the organization's website to know what it does, it's reputation, it's clients, their area of specialization.
Also, before going for an interview, the interviewee must ensure the following:
Prepare oneself for the interview, learn and gather information about the organization.To dress up appropriately in a neat and tidy manner. Bold colors and gaudy outfits should be avoided. To be on time, preferably 5-10 minutes earlier than the interview scheduled time. Politeness and courtesy in responding to questions and also in respect to dealings with employer staff.As of December 31, Year 1, Mason Company had $500 cash. During Year 2, Mason earned $1,200 of cash revenue and paid $800 of cash expenses. The amount of cash shown on the balance sheet at the end of Year 2 would be: Multiple Choice O $90 o $400. $1,700 $2.500
Answer:
The balance sheet will show a cash balance of 900 dollars.
Explanation:
We do the cash T account to solve for this. As it resumes all the transactions for the given period of time and can be used to determinate the balance.
CASH
DEBIT CREDIT
500
1,200
800
1,700 800
Balance: 900
We post the inflow in the debit side while the outflow (expenses paid) in the credit side.
Then we subtract one from another and get the balance which is always on debit.
Decreases in owners' equity are caused by:
A. Purchases of assets and payment of liabilities
B. Purchases of assets and incurrence of liabilities
C. Payment of liabilities and unprofitable operations
D. Distribution of assets to the owner and unprofitable operations
Answer:
Distribution of assets to the owner and unprofitable operations
Explanation:
Distribution of assets to the owner and unprofitable operations decrease the owners equity. Asset distribution decrease the assets of the company and Equity as well in the same time. The decrease in value of assets will result in the decrease in the value of equity on the other hand. So the correct option is D. Distribution of assets to the owner and unprofitable operations.
Marco, the owner of Spaghetti Factory, is involved in the company's daily decisions and has established procedures for every task. The company rules are clearly specified in the handbook, and Marco also believes in close supervision of all employees. Spaghetti Factory is a(n) _______ organization.A.Multiple ChoiceB. informalC.mechanisticD. organicE. decentralizedF. nonhierarchical
Answer:
C. mechanistic
Explanation:
Spaghetti Factory is a mechanistic organization.
Because in mechanistic, it also determines that the rules which have been made should be strictly followed.
And we can see in the question that Marco, the already made all the rule and has given it on the handbook, and he also want that everyone should follow the rules strictly which are made by him.
For each of the transactions in items 2 through 13, indicate the two (or more) effects on the accounting equation of the business or company..The owner invests personal cash in the business.AssetsIncrease Decrease No EffectLiabilitiesIncrease Decrease No EffectOwner's (or Stockholders') EquityIncrease Decrease No Effect
Answer:
2. The owner invests personal cash in the business.
Assets: Increase
Liabilities: No Effect
Owner's (or Stockholders') Equity: Increase
3. The owner withdraws cash from the business for personal use.
Assets: Decrease
Liabilities: No Effect
Owner's (or Stockholders') Equity: Decrease
4. The company receives cash from a bank loan.
Assets: Increase
Liabilities: Increase
Owner's (or Stockholders') Equity: No Effect
5. The company repays the bank that had lent money to the company.
Assets: Decrease
Liabilities: Decrease
Owner's (or Stockholders') Equity: No Effect
6. The company purchases equipment with its cash.
Assets: one increases and another decreases, but it total assets don't change
Liabilities: No Effect
Owner's (or Stockholders') Equity: No Effect
7. The owner contributes his/her personal truck to the business.
Assets: Increase
Liabilities: No Effect
Owner's (or Stockholders') Equity: Increase
8. The company purchases a significant amount of supplies on credit.
Assets: Increase
Liabilities: Increase
Owner's (or Stockholders') Equity: No Effect
9. The company purchases land by paying half in cash and signing a note payable for the other half.
Assets: Increase
Liabilities: Increase
Owner's (or Stockholders') Equity: No Effect
10. In May, Company X records the transaction by a debit to Accounts Receivable for $5,000 and a credit to Service Revenues for $5,000. What is the effect of this entry upon the accounting equation for Company X?
Assets: Increase
Liabilities: No Effect
Owner's (or Stockholders') Equity: Increase
11. In June, Company X receives the $5,000. What is the effect on the accounting equation and which accounts are affected at Company X?
Assets: No Effect
Liabilities: No Effect
Owner's (or Stockholders') Equity: No Effect
12. What is the effect on Client Q's accounting equation in May when Client Q records the transaction as a debit to Consultant Expense for $5,000 and a credit to Accounts Payable for $5,000?
Assets: No Effect
Liabilities: Increase
Owner's (or Stockholders') Equity: Decrease
13. What is the effect on Client Q's accounting equation in June when Client Q remits the $5,000? Also, which accounts will be involved?
Assets: Decrease
Liabilities: Decrease
Owner's (or Stockholders') Equity: No Effect
Final answer:
The investment of personal cash into the business increases Assets and Owner's Equity in the accounting equation while Liabilities remain unchanged.
Explanation:
When the owner invests personal cash in the business, this affects the accounting equation in two ways:
Assets increase because cash, which is an asset, is added to the business.Owner's (or Stockholders') Equity increases as well because the investment increases the owner's equity in the business.Liabilities do not change in this transaction since no additional debts or obligations are created.
The accounting equation, which is Assets = Liabilities + Owner's (or Stockholders') Equity, remains balanced after the transaction as the increase in assets is matched by an equal increase in owner's equity.
Eric Jones develops computer software for a major company. Eric's salary and bonuses total $82,000, but he pays $29,233 in income and Social Security taxes. If Eric's annual debt repayments are $33,620, what is his debt -to-income ratio?
Answer:
0.41
Explanation:
To calculate Eric's debt to income ratio we must divide his total debt payments by his gross income = total annual repayments / (Eric's salary + bonuses) = $33,620 / $82,000 = 0.41
The new qualified mortgage rule establishes that a good debt to income ratio must be 0.43 or less. For other types of credits, banks usually consider a 0.4-0.5 ratio as good or acceptable.
Common stockholders of a business enterprise are said to be the residual owners. The term residual owner means that shareholders _________.
a. are entitled to a dividend every year in which the business earns a profit.
b. have the rights to specific assets of the business.
c. bear the ultimate risks and uncertainties and receive the benefits of enterprise
ownership.
d. can negotiate individual contracts on behalf of the enterprise
Answer:
C. Bear the ultimate risks and uncertainties and receive the benefits of enterprise ownership
Explanation:
The common stockholders in a business has the lowest priority and only tend to receive distribution of prior claims have been paid. This is why they are referred to as residual owners.
Preferred Stock is seen as a liability rather than part of an equity for residual owners.
Presented below are three transactions. Mark each transaction as affecting common stock, dividends, revenue, expense, or not affecting stockholders’ equity. a) Received cash for services performed. Entry field with correct answer (b) Paid cash to purchase equipment.
Answer:
a)Received cash for services performed.
+ Assets (cash)
+ revenues (fees earned)
This has impact on stockholders equity as the revenues increase the earnings of the business. The company receives an asset (cash increasease of their services, that asset received is what icnrease the value of the company)
b)Paid cash to purchase equipment.
+ Assets (equipment)
- Assets (cash)
This transaction doesn't involve Equity It is just a change in the Assets compositions. It has no impact on the income neither.
Explanation:
The given transactions involve determining the effects on different elements of stockholders' equity: common stock, dividends, revenue, and expenses.
In the given transactions:
a) Received cash for services performed. This transaction affects revenue as it represents an increase in the company's earnings from providing services.
b) Paid cash to purchase equipment. This transaction affects expense as it represents a decrease in the company's assets from purchasing equipment.
Neither of these transactions affects common stock, dividends, or stockholders' equity.
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The culture of UPS places service to the customer among the company's highest business objectives, which is reflected in its use of information systems to enable customer tracking of their packages. Based on your reading of Chapter 1, why is "culture" an important factor to consider when building information system solutions to business problems?
Answer:
B) The business culture provides the vision and inspiration for information system solutions
Explanation:
The culture of a company is the character of an enterprise. It establishes the workplace environment. The tradition of the company comprises a wide range of components, such as working environment, task, inspiration, ethical standards, aspirations, visions and objectives. Without any regulations and rules, certain firms provide a casual work environment.
Reductions in the size of the customer base and increased usage of supply chain management have led to: a. decreased levels of buyer-seller interaction. b. lower levels of service expectations by buyers. c. poor risk management. d. development of short-term buyer-seller relationships. e. buyers and sellers being more interdependent.
Answer:
E) buyers and sellers being more interdependent.
Explanation:
The internet has completely changed our world in so many ways that few people could imagine that currently you can purchase Coke directly from a Coca Cola factory, you don't even need to go to a supermarket anymore (and the prices are lower). Slowly but steadily, intermediaries are being eliminated, anyone can remember how huge Sears, Kmart, JC Penny, Macy's were just 10 -15 years ago.
Now manufacturers try to sell their products directly or they use Amazon, Ebay or some other website. And customers like that because the prices are lower now. You can go to a Best Buy store and compare prices with Amazon, and if Amazon is cheaper, you leave the store and your TV arrives the next day.
Pacific Specialty Bikes store gets customized parts for its high-end models from a local manufacturer, Premium Supply. When the manufacturer announced a price increase, the bike store tried to switch to other local manufacturers but learned that they wouldn't be able to meet delivery schedules. As a result, Pacific Bike chose to pay higher prices from Premium Supply. Which of Porter's competitive forces does this demonstrate?
This situation demonstrates bargaining power of supplier.
Explanation:
Porter's Five Forces Framework is a method for analyzing competition of a business. It draws from industrial organization economics to derive five forces that determine the competitive intensity and, therefore, the attractiveness of an industry in terms of its profitability.
The number and power of a company's competitive rivals, potential new market entrants, suppliers, customers, and substitute products influence a company's profitability. Five Forces analysis can be used to guide business strategy to increase competitive advantage.
The balance in the office supplies account on June 1 was $6,300, supplies purchased during June were $3,100, and the supplies on hand at June 30 were $2,500. The amount to be used for the appropriate adjusting entry is______________
Net income $ 15,953 Net sales 712,855 Total liabilities, beginning-year 83,932 Total liabilities, end-of-year 103,201 Total stockholders' equity, beginning-year 198,935 Total stockholders' equity, end-of-year 121,851 The return on total assets is:
Answer:
The return on total assets is 6.28%.
Explanation:
The return on total assets can be found from the following formula:
Return on Assets = Operating Profit / Average assets......Equation 1
And
Average Assets = (Opening Assets + Closing Assets)/2.........Equation 2
As here we are not given Opening assets and closing assets amount but we can find them through the following formula:
Opening Assets = Opening Equity + Opening Liability
Opening Assets = $198,935 + $83,932 = $282,867
Likewise
Closing Assets = Closing Equity + Closing Liability
Closing Assets = $121,851 + $103,201 = $225,052
Putting values in the Equation 2, we have:
Average Assets = ($282,867 + $225,052)/2 = $253959.5
Now by putting values in the Equation 1, we have:
Return on Assets = $15,953 / $253959.5 = 6.28%
Suppose that when good J is free, buyers will demand 100 units of it, but the quantity demanded falls by 5 units for every $2 increase in the price. If the quantity supplied is fixed at 60 units, the equilibrium price will be: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices $16. $30. $24. $40.
Answer:
$16
Explanation:
At $0, demand is 100units.
but for every $2 increase, there is a 5 unit decrease.
When the demand is fixed at 60 units, let price of good J be x
Firstly, we calculate the difference between 100 units and 60 units
we have, 100 - 60 = 40 units
For every $2, increase, demand is minus 5.
thus we calculate how many 5 units there are in 40 units.
we have 40 units ÷ 5 units = 8
SInce every +$2 causes -5 units, we have the price of good J at 60 units fixed demand to be 8 x $2 = $16.
It means at $16, the demand of good J is 60 units.
Alternatively, you could do this,
At $0, demand is 100 units
At $2 (0 + 2), demand is 95 units (100-5)
At $4 (2+2), demand is 90 units (95-5)
At $6 (4 + 2), demand is 85 units (90-5)
At $8 (6 +2), demand is 80 units (85-5)
At $10 (8 + 2), demand is 75 units (80-5)
At $12 (10 + 2), demand is 70 units (75-5)
At $14 (12 + 2), demand is 65 units (70-5)
At $16 (14+ 2), demand is 60 units (65-5)
Cheers.
A variable cost a. is synonymous with labor costs b. changes in the same direction and in direct proportion to changes in operation activity. c. changes in the same direction and in inverse proportion to changes in operating activity. d. changes in the opposite direction and in direct proportion to changes in operating activity.
Answer:
b. changes in the same direction and in direct proportion to changes in operation activity.
Explanation:
Variable costs are expenses that vary with changes in production level. A variable cost is attached to the production of a particular product or service. An example of variable cost is the raw material expense. As the production level rises, more raw materials will be needed for production.
The relationship between variable costs and output level is direct and proportional. An increase in output requires more materials and other consumables. As variable costs are associated with the production process, an increase or decrease in production level results in a similar or increase or decrease in variable costs.
Hank bought a farm that had an old barn. He noticed one day that the roof of the barn was swaying in the wind. Hank went to see his insurance agent and he insured the barn for $20,000. The agent didn't ask if the roof might collapse, and Hank didn't say anything about it. One week later there was a strong wind and the roof collapsed. Assuming the insurer can prove it, under what legal grounds could the insurer deny payment of the claim?
A) estoppel
B) concealment
C) warranty
D) misrepresentation
Answer:
B. Concealment
Explanation:
Concealment is the act of hiding information or keeping information that might be regarded as a relevant fact in relation to what is being insured from the insurer.
When an insured hide information that may affect the policy bought from the insurance company.
The concealment can be done intentionally or unintentionally by the insured
Until recently, George lived in a home that was newly constructed in 2005. In 2005, he paid $200,000 for the brand new house. He sold the house in 2006 for $225,0000. Which of the following statements is correct regarding the sale of the house?
a. The 2006 sale increased 2006 GDP by $225,000 and had no effect on 2005 GDP.
b. The 2006 sale increased 2006 GDP by $25,000 and had no effect on 2005 GDP.
c. The 2006 sale increased 2006 GDP by $225,000; furthermore, the 2006 sale caused 2005 GDP to be revised upward by $25,000.
d. The 2006 sale affected neither 2005 GDP nor 2006 GDP.
Answer:
"D"
Explanation:
The effect of the acquisition of an existing home on the economy can be very minimal.
While the investment in the construction of a newly built house , land acquisition , purchase of building materials and the man power involved in the building works as well as the economic activities of the occupants of the new building contributes directly to the economic growth , the buy and selling of en existing building does not have a direct contribution to the economy except for the accompanying cost of related services involved in the transaction.
A description of the good or service, an assessment of the opportunity, an assessment of the entrepreneur, specification of activities and resources needed to translate the idea into a viable business, and the source(s) of capital together make up a(n):_________.
Answer:
opportunity analysis
Explanation:
opportunities analysis applies to the development of demand and competitive analysis, and to the evaluation of business conditions in order to have a vision for the future and to prepare tactics appropriately. opportunities analysis is a critical method for an organisation's development and needs to be done regularly
uppose that an MBA degree creates no extemality because the benefits of an MBA are internalized by the student in the form of higher wages. If there are no government subsidies for MBAs, then which of the following statements is correct? a. The equilibrium quantity of MBAs will equal the socially optimal quantity of MBAs. b. The equilibrium quantity of MBAs will be greater than the socially optimal quantity of MBAS. c. The equilibrium quantity of MBAs will be less than the socially optimal quantity of MBAs. d. There is not enough information to answer the question.
Answer:
A) The equilibrium quantity of MBAs will equal the socially optimal quantity of MBAs.
Explanation:
No government subsidies, no government taxes, no government anything = free markets = capitalism = fantasy world
Pure capitalism doesn't exist (only semi capitalistic economies), since governments exist and they regulate the economy, tax and transfer money, and spend.
But in a fantasy world where governments do not exist, then the equilibrium quantity of any good or service equals the socially optimal quantity. That applies to every single product or service.
A marketing manager decides what combination of variables is needed to satisfy customers' needs for a general type of product. What are the essential variables that the marketing manager combines?
Answer:
Product, price, distribution and promotion variables.
Explanation:
Service quality is more directly related to the interaction between customer and employee than is manufacturing quality. Group of answer choices True False
Answer:
True
Explanation:
Service quality refers the comparison of the consumers expectation and the actual performance of the organisation rendering the services. it seeks to understand if services delivered conform with the expectation of the consumer.
Since rendering services is concerned with performing a particular activity that will most probably involve an interaction with the receiver of the action, service quality is more directly related to the interaction between the customer and employee than in manufacturing quality that is concerned with how a physical good is able to meet the expectation of the consumer.
The _____ doctrine is a special tort rule that imposes liability on a landowner to children who have trespassed onto his or her property with the intent to play on a hazard and are killed or injured while doing so.
Answer:
Attractive nuisance doctrine
Explanation:
Under attractive nuisance doctrine, a landowner is held responsible for the injuries or death caused to children while playing on the land owned by him. The child or children could have got attracted to the land without knowing the danger or hazards present on the land.
This comes under intentional tort that imposes responsibility on the landowner for ensuring the safety of the trespassers.
Answer:
attractive nuisance doctrine
Explanation:
attractive nuisance doctrine - this is referred to that doctrine based on law of tort. it states that if any children got injuries while trespassing on owner land then the owner will be held responsible for that injury.
an attractive nuisance is considered as an object which can cause any causality by attracting children. for example - Dogs can be taken as an attractive nuisance which can be dangerous to the children if they get attracted to the dog.
To combat increasing competition by lowering its prices, Rumbearc Inc., a paper carton box manufacturing company, decides to mechanize most of its production processes. Subsequently, Rita, the chief human resources officer of the company, makes a media announcement regarding its decision to lay off 600 employees. In the context of managerial roles, which of the following roles does Rita illustrate in this scenario?a. The leader roleb. The spokesperson rolec. The liaison roled. The disseminator role
Answer:
Disseminator role
Explanation:
This entails a manager communicating useful information collected from either internal or external sources to relevant parties in a business in the best way to facilitate mutual understanding
His intention is to ensure that everyone understands the reason behind potential decisions . He adopts open communication that is related to the culture of the organization. This could be through verbal communication in meetings or sending of memo.
Henriette offers financial counseling and management on a fee-only basis. She has found that different customers are willing to pay different rates for her services. This shows that her pricing decisions should depend primarily on____________
Answer:
How different customers perceive the value of her services.
Explanation:
Laveall has created seven global product divisions — fragrances, baby care, batteries, oral care, men's grooming, convenience foods, and detergents — and three marketing divisions — one for North America, one for Asia, and one for Europe . In the context of the systems approach to management, these ten divisions are examples of _____.
Answer:
Subsystems
Explanation:
The elements of a system form a whole and can be concepts, objects or subjects; these elements can be living, non-living or both simultaneously, as well as ideas, be they from the field of ordinary, scientific, technical or humanistic knowledge. Ideas cannot be conceived as loose or independent of context or
system in which they are inserted. The interaction between the elements and their organization is what makes the system work.
The systemic approach "admits the need to study the components of a system, but does not limit itself to this. It recognizes that systems possess characteristics that their parts lack, but it aims to understand these systemic properties in terms of the parts of the system and their interactions, as well as in terms of circumstances
environmental. In other words, the systemic approach invites us to study the composition, the environment and the structure of the systems of interest
Every system is or can be part of a larger system that we can call supersystem, metasystem, etc. (that is, or may be, a subsystem) or be composed of subsystems, these are nothing more than smaller systems, which at their time may be composed of even smaller ones, and so we could go on until to reach the most elementary components of everything in the universe. The concept system is valid from a cell to the universe considered as a systems.
Answer:
Subsystems
Explanation:
In the systems approach, subsystems are self-contained systems that operate within a larger and more developed system within an organization or corporation.
Each one of the seven product divisions operates independently from each other, but they are all coordinated by the larger marketing divisions (North America, Asia and Europe). And the corporation's headquarters is responsible for coordinating the marketing divisions.
An increase in the price of oil will a. shift the supply curve of oil to the left. b. shift the supply curve of oil to the right. c. leave the supply curve of oil unchanged. d. not enough information to answer the question.
Answer:
The correct answer is option c.
Explanation:
An increase in the price of oil will cause the quantity demanded of a commodity to decline and the quantity supplied to increase. This will cause a surplus in the market.
There will be no change in the demand and supply curve.
This is because of the law of demand and supply.
According to the law of demand, the price of a commodity is inversely related to the quantity demanded of the commodity, while other factors are kept constant.
Similarly, the law of supply states that the price of a commodity is positively related to the quantity demanded of a commodity.
The demand and supply curves are not affected by the changes in price, they change as a result of changes in other factors.
You own a bond that has an 8 percent coupon and matures 8 years from now. You purchased this bond at par value when it was originally issued. If the current market rate for this type and quality of bond is 8.25 percent, then you would expect
Answer:
C) to realize a capital loss if you sold the bond at the market price today.
Explanation:
Your bond will sell at a discount since the market rate is higher than the bond's coupon rate. When a bond sells at a discount its market price is lower than its face value. Since you purchased the bond at its face value, and you sell right now, you will receive less money than what you paid for it.