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How do companies rate a country's risk when considering investing in these countries? In general, the risks to a country can be divided into two groups: economic risk and political risk. Economic risks are related to the financial condition and the country's ability to pay its debts. For example, a country with a high debt-to-GDP ratio may not be able to raise funds as easily as it can support itself, putting its national economy at risk. Political risk is associated with a nation's leaders and the impact of their investment decisions. Desperate politicians who support nationalization, for example, could pose a threat to investors in some strategic industries. Investors have several different tools at their disposal, from beta ratios to sovereign ratings. Foreign investors should use a combination of these methods to assess a country's risk and the risks associated with any particular investment or international security. The methods used are quantitative o...

Mark the following terms because they are used in economics 1) micro and macroeconomics 2) cyclical and frictional unemployment Microeconomics and Macroeconomics: Microeconomics is the study of markets and specific sectors of the economy. It examines issues such as consumer behavior, individual labor markets, and business theory. Macroeconomics is the study of the entire economy. It analyzes "macro" variables, such as aggregate demand, national production, and inflation. Micro-economics is the study of individual and commercial decisions, while macroeconomics looks at the decisions of countries and governments. Although these two economic branches seem different, they are in fact interlinked and integrated. There are many overlapping problems between the two fields. Microfinance studies the decisions of individuals and businesses, while macroeconomics analyses decisions made by countries and governments. The micro-economy focuses on supply, demand and other forces...

Question A:  They are called a group of competing option and only one is chosen. None of the above-mentioned independent alternatives are mutually exclusive altern atives to do nothing? Answer: Projects are called standalone if the acceptance of the alternative does not affect the cash flows of other projects. In the case of mutually exclusive alternatives, the acceptance of one alternative affects the cash flows of the other alternatives. An alternative can only be chosen in the case of mutually exclusive projects.  So the right choice is mutually  exclusive alternatives Question B. True or false?  If unemployment is zero, production is when possible. Explain. Answer: When the difference between unemployment and the natural rate of unemployment is equal to 0, it means that unemployment is at the natural level. When unemployment is at a normal level, this means that there is no unwanted unemployment, there is only "natural" unemployment in...

Question: Learn how inflation and exchange rate movements affect your company. This also depends on how often your business changes prices, negotiates prices, and how expensive it is to change prices. Answer: Inflation and the exchange rate movement affect my company, which is a private school, in the following ways: If inflation rises or our national currency weakens, the cost of running the school, infrastructure, and various services will increase. This will lead to a decrease in the net income of a private school. Hence, to meet this usual school, the monthly fee is increased. Changing fees or making a one-time payment is also expensive because the notice must be posted to all interested parties, and the same change must also be listed on the school's official website. Inflation changes very frequently, but at the same rate, school fees cannot be changed, so the school should anticipate how much fees will need to be increased so that the review can take place 6...

Question:  What is the difference in present value between an investment of $ 12,764 per year for 50 years and an investment of $ 12,784 per year in perpetuity at 12% interest per year Answer: Here, Investment amount = $ 12,764 Interest rate = 12% So for 50 years Present Value = 12.764 * (1- (1 / (1 + .12) ^ (50)) / .12 = 105,998.6 USD So for an infinite period, Present Value = 12764 / .12 = $ 106,366.7 So, difference = $ 106,366.7 - $ 105,998.6 = $ 368.048 1. Demonstrate this using a game in the normal way. 2. Does any firm have a rigidly dominant strategy? If so, what (are) these strategies? Explain your answer. 3. What is the strategy that each company will adopt? Explain your answer. 4. Does this game have a nash balance? Explain your answer 5. Is collusion possible in this game? Explain your answer. Answer 1. The normal game format can be illustrated below: Clampett wide well tight Clampett well Wide TEXplor well (1 m, 1 m) (16...

 Discuss the different monetary standards which are used by many countries nowadays The monetary standard is the set of rules and regulations for controlling the amount of money in the market as well as regulating the exchange value. The money supply determines the rate of growth of the economy. Here are the various monetary standards. A- Cash: In this standard, one metal is used as a standard currency or as a standard for monetary value. For example, metals like gold or silver can be used. Coins are used in everyday transactions. B. Bimetallic: Two types of metals are used in this standard. Two metals, gold, and silver are smelted. To make coins there is a fixed legal ratio for the value of gold and silver coins. Generally speaking, silver coins are used for small transactions and gold coins are used for large transactions. Both currencies can be converted into each other because the legal ratio of exchange between them is fixed. C- Paper Money Standard - In this sta...

 The company is studying the following general Porter strategies; Leadership strategies, differentiation, and the cost approach. Discuss practical ways in which this financial institution can adopt a specific IT innovation to pursue two of Porter's generic strategies. Answer. Here we will discuss practical ways in which a financial institution can adopt a specific innovation to pursue two general guardian strategies, such as cost leadership and differentiation strategy. Nowadays, it is imperative to embrace IT innovations and many other technological developments to be able to cope with emerging market trends. Given the competition, it is imperative to embrace IT innovations to follow generic strategies and to ensure that the business can achieve the level of success it has already determined. Therefore, here we shall be discussing innovation to pursue cost leadership and differentiation strategy for a firm to achieve its level of success which it has already decided upon. ...

Question: Domestic demand (D) and supply (S) for wine, respectively, are given by D = 14 - P and S = P - 4 (where P is the price of wine). The household is a small open economy (SOE) and faces the world price of 6. 1. TEXplor secured a two-year lease on land adjacent to the land that was leased by Clampett. The land leased by TEXplor is located on the same oil depots. Suppose each firm sinks wells of the same size at the same time. If both companies flooded large wells, they would each extract 2 million barrels in 6 months, but each company would receive a profit of only one million global gas companies. On the other hand, if each company sank a tight well, it would take Clampett and TEXplor a year to extract their respective shares, but each would have profits of 14 million GHC each. Finally, if one company drilled a wide well while the other drilled a narrow well, the first company would extract 3 million barrels and the second only one million. In this case, the first company wo...

Question: The unemployment rate never becomes equal to zero, even as an economy approaches the natural rate level of real GDP (YNR), due to certain, specific imperfections in labor markets  Answer: The unemployment rate never becomes equal to zero, even as an economy approaches the natural rate level of real GDP (YNR), due to certain, specific imperfections in labor markets (eg. Efficiency wages; eg. Labor unions). The wage/salary paid by firms in a given labor market may be less than the equilibrium wage, for a given set of labor demand (by firms) and labor supply (by households). Thus the quantity of labor that households want to supply at the lower wage will be less than the quantity demanded of labor by firms, resulting in unemployment. The wage/salary paid by firms in a given labor market may be less than the B) equilibrium wage, for a given set of labor demand (by firms) and labor supply (by households). Thus the quantity of labor that households want to supply at the low...

The buyer make a purchase and the buyer goes through a five-step decision-making process It is clear that the procurement process begins long before the actual purchase and continues long after. The marketer's job is to understand the buyer's behavior and impact at each stage. This number means that consumers go through all five stages of each purchase. We explain all five stages of the buyer's decision-making process. The first stage is the recognition of the problem: at this point, the consumer understands the problems or problems that they would like to satisfy with the product they brought from the store.At this point, the consumer understands the need or problem. The buyer knows the difference between his or her actual condition, his condition or the conditions he expects. It can be very simple, because "I'm hungry, I need food." The second stage is the search for information: in this stage, the buyer will look for information related to ...

  Using interpolation, Internal Rate of Return  :  RL + [NPVL / (NPVL - NPVH)] * (RH - RL) that is RL: Lowest discount rate = 5% (assumed) RH: Highest discount rate = 10% (assumed) NPVL: 5% NPV NPVH: VPN at 10% For alternative A: NPV = - 915,000 + (298,000 - 20,000) x P / A (5%, 10) + 130,000 x P / F (5%, 10) = - 915,000 + 278,000 x 7.7217 + 130,000 x 0.6139 = - 915,000 + 2,146,633 + 79,807 = 1,311,440 NPV = - 915,000 + (298,000 - 20,000) x P / A (10%, 10) + 130,000 x P / F (10%, 10) = - 915,000 + 278,000 x 6.1446 + 130,000 x 0.3855 = - 915,000 + 1,708,199 + 50,115 = 843,314 And therefore, IRR = 5% + (1,311,440 / (1,311,440 + 843,314)) x (10-5)% = 5% + (1,311,440 / 2,154,754) x 5% = 5% + 3.04 x 5% = 5% + 15.2% = 20.2% For alternative B: NPV = 800,000 + (270,000 - 30,000) x Price / Price (5%, 10) + 50,000 x P / F (5%, 10) = - 800,000 + 240,000 x 7.7217 + 50,000 x 0.6139 = - 800,000 + 1,853,208 + 30,695 = 1,083,903 NPVH...