In the calculation of effective duration and effective convexity, why is a prepayment model needed?
What will be an ideal response?
A prepayment model will tell us how prepayments cause the projected cash flows to change as interest rates change. This is needed because to properly compute effective duration and effective convexity we must account for cash flows changing with interest rates.
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When investing in automated systems, which of the following intangible or indirect benefits may be important?
A) improved customer satisfaction B) improved market share C) reduced support labor cost D) reduced lead time E) all of these may be important
Beta Inc. can produce a unit of Zed for the following costs: Direct material$10 Direct labor 20 Overhead 50 Total costs per unit$80 An outside supplier offers to provide Beta with all the Zed units it needs at $58 per unit. If Beta buys from the supplier, it will still incur 40% of its overhead. Beta should:
A. Buy Zed since the relevant cost to make it is $60. B. Make Zed since the relevant cost to make it is $30. C. Make Zed since the relevant cost to make it is $60. D. Buy Zed since the relevant cost to make it is $30. E. Buy Zed since the relevant cost to make it is $80.
Which is a type of union that represents a single firm?
a) Public sector union b) Professional union c) General union d) Enterprise union
A First National Bank depositor made out a deposit slip showing currency of $620.00 . coins of $13.25, and two checks for $113.30 and $174.00 . Compute the total deposit shown on the deposit slip