Answer:
$3,606.49
Explanation:
the price of a zero coupon bond = maturity value / (1 + i)ⁿ
- maturity value = $10,000
- i = 6.09% / 2 = 3.045% semiannual interest rate
- n = 17 years x 2 semiannual compounding = 34 periods
the price of a zero coupon bond = $10,000 / (1 + 3.045%)³⁴ = $10,000 / 1.03045³⁴ = $10,000 / 2.772779928 = $3,606.49
the formula we used to determine the market price of a zero coupon bond is basically the present value
Answer:
False
The diamond-water paradox is illustrated by stating that the marginal benefit of the services provided by doctors and nurses is relatively lower than the marginal benefit of the services provided by major film stars. This implies that the supply of doctors and nurses is larger than the demand while the demand for major film stars is larger than the supply.
Explanation:
The marginal utility derived by film consumers from major film stars is higher than the marginal utility derived by patients from doctors and nurses. This is because consumers of the services of major film stars are willing to pay more for the services than consumers of the services of doctors and nurses. Though health is more crucial to life than films, but consumers place more utility value on films than they do on their health, especially after attaining the basic sound health. This actually explains the diamond water paradox, where consumers value diamond and are willing to pay more for diamond than they are willing to pay for life-sustaining water. In a layman's language, people are more willing to value the satisfaction they derive from one more additional film than they are to value the satisfaction they derive from additional healthcare. That means that people only care for the basic in healthcare. But, they can stake more to acquire more diamond.
Answer:
A. National income must equal domestic product.
True.
Explanation:
National Income is the total value of goods and services produced in a country during a financial period. It is total income from a country's economic activities.
Domestic product is monetary value of all economic activities of a country during a period.
National Income is sum of Investments, Savings, Government expenditures and net exports. National Income equals the domestic products of a country. The equation is as follows:
C + I + G + (X - IM) = DI + NT.
The statement given is true. Disposable income equals the saving plus consumption. The excess of disposable income which is not consumed is saved. Sum of saving and consumption must equal Disposable income in an economy.
Answer and Explanation:
a. The computation of Kiyara’s deduction for qualified business income is shown below:-
Kiyara's Share of income is
= 50% × $332,000
= $166,000
Max qualified business deduction is
= 20% × $166,000
= $33,200
b. The computation of Kiyara’s net investment income tax liability is shown below:-
Net investment income tax liability = $166,000 × 3.8%
= $6,308
c. The computation of Kiyara’s self-employment tax liability is shown below:-
Kiyara is not earning Jazz Corp.'s self-employment taxable income because Kiyara is not doing work for Jazz Corp.
Hence, the tax liability for self-employment is 0.
d. The computation of Kiyara’s additional Medicare tax liability is shown below:-
Additional medicare tax liability
= $282,000 - $200,000
= $82,000 × 0.9%
= $738
Answer:
<em>For the 2 year treasury securities it was 7%, and for a 3 year treasury securities it was 7.33%</em>
Explanation:
<em>From the example, </em>
<em>The real risk rate of interest is= 4%</em>
<em>The inflation expectation of this year=2%</em>
<em>Inflation expected for the next 2 years=4%</em>
<em>Maximum risk premium=0</em>
<em>Therefore</em>
Rt= r* + (Inflation/ year)
Rt2= 4 + (2 + 4 / 2) = 7%
<em>Rt3= 4 + (2 + 4 / 3) = 7.33% </em>
