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• Individual national currencies often need to be evaluated against all other currency values to determine relative purchasing power • The objective is to discover whether a nation’s exchange rate is “overvalued” or “undervalued” in terms of PPP • This problem is often dealt with through the calculation of exchange rate indices such as the ...
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The bond’s coupon rate is the stated rate of interest; the annual interest payment divided by the bond’s face value. The discount rate (capitalization rate) is dependent on the risk of the bond and is composed of the risk-free rate plus a premium for risk.
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47. What is the ASK cross-exchange rate for Canadian dollars priced in euro? Hint: Find the price that a currency dealer will take in euro to sell Canadian dollars. A. €0.6094/CAD B. €0.6104/CAD C. €0.6181/CAD D. €0.6191/CAD
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Floating Exchange Rate Countries – Under a floating exchange rate system, the government has no responsibility to peg its foreign exchange rate – Surplus on the BOP currency appreciation price of export goods ↑, price of import goods ↓ export ↓, import ↑ BOT ↓ BOP ↓ – Deficit on the BOP currency depreciation price of export goo...
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What is the Present Value (PV) of the previous problem? The Present Value is simply the $1,000 you originally deposited. That is the value today! Present Value is the current value of a future amount of money, or a series of payments, evaluated at a given interest rate.
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Trong thực tế có nhiều trường hợp “freerider problem” . Ở Mỹ chỉ có 7.5% công chúng nghe radio trả tiền, có nhiều người hưởng tự do. Sử dụng internet, download các tài liệu miễn phí, update các phần nềm miễn phí
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Generally, an LLC will possess only the first two of the following four standard corporation characteristics Limited liability Centralized management Unlimited life Transfer of ownership without other owners’ prior consent
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For 1990-2000, the US$ strengthened despite continued worsening balances on current account • The US$ remained to be strong due to foreign capital inflow motivated by rising stock and real estate prices, a low rate of inflation, high real interest rates, and an irrational expectation about future economic prospects • Actually, from 1995 to 200...
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Jensen and Meckling developed a theory of the firm based on agency theory. Agency Theory is a branch of economics relating to the behavior of principals and their agents. Principals must provide incentives so that management acts in the principals’ best interests and then monitor results.
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Principals must provide incentives so that management acts in the principals’ best interests and then monitor results. Incentives include stock options, perquisites, and bonuses.
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