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Rom4ik [11]
2 years ago
15

Suppose the current spot rate for the Norwegian kroner is $1 = NKr6.6869. The expected inflation rate in Norway is 6 percent and

in the U.S. it is 3.1 percent. A risk-free asset in the U.S. is yielding 4 percent. What risk-free rate of return should you expect on a Norwegian security?
A.4.5 percent
B.4.0 percent
C. 6.9 percent
D. 5.0 percent
E. 3.5 percent
Business
1 answer:
Elden [556K]2 years ago
5 0

Answer:

The correct answer is option C.

Explanation:

The current spot rate for the Norwegian kroner is $1 = NKr6.6869.

The expected inflation rate in Norway is 6 percent and that in the US is 3.1%.  

The risk-free rate of return in the US is 4%.  

Risk free rate in US - Inflation rate = Risk free rate in Norway - Inflation rate

4% - 3.1% = Risk free rate - 6%

Risk free rate in Norway = 0.9% + 6%

Risk free rate in Norway = 6.9%

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3 0
2 years ago
Which statement describes direct materials in a manufacturing setting?A) Direct materials are used to determine total manufactur
Helga [31]

Answer:

B) Direct materials are used to determine total inventoriable product costs.

Explanation:

Product costs includes direct materials, direct labor & manufacturing overhead.

This makes Choice B a description of direct materials in a manufacturing setting. All other choices are false.

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Direct materials can be separately and conveniently traced.

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7 0
2 years ago
Your Uncle Mike is approaching retirement and he asks for your advice for a safe place to invest several thousand dollars. He wa
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Answer:

d. treasury and top-grade corporate bonds pay interest two times each year

Explanation:

Treasury bonds represent the best solution for investing, having in mind the <u>low-risk aspect</u> and the fact that they are <u>issued by the government</u>. Treasury and top-grade corporate bonds always pay <u>semiannual interests</u>.

<em>Junk bonds</em> should not be even considered in risk-free options, as a junk bond is a bond issued by a struggling company, which may happen not to pay any interest sometimes.

<em>Common stock</em> does not necessarily have to pay quarterly dividends, as some companies pay dividends monthly, or even annually. Also, the risk is still lower in treasury bonds, as common stock becomes questionable in the case of company liquidation. If and when that happens, common stockholders gain rights to company assets only after bondholders and preferred shareholders become paid.

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6 0
2 years ago
The financial records for the Harrison Manufacturing Company have been destroyed in a fire. The following information has been o
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Answer:

d. $8,300.

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Beginning     8,200

Purchases   *16,800

Requisitions             18,400

Ending          6,600

We solve for purchases:

6,600 + 18,400 - 8,200 = 16,800

WIP Inventory

Beginning                7,700

Materials                18,400

Labor                     13,700

Overhead               8,200

Transferred Out    <u>             39,700*</u>

Ending                    8,300

The transferred-out from WIP inventory is the transferred-in for Finished Goods

8 0
2 years ago
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