Explain what a dual exchange rate system is
What will be an ideal response?
Two exchange rates that apply to specific transactions.
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Oxnard Rims, Inc., has $5 million in assets and $2 million in debt. During the course of the year, it takes in $1 million in net revenue after deduction of all costs (except for interest) and incurs interest expenses of $500,000. Oxnard Rims, Inc., pays an average tax rate of 35% on its profit. Calculate the percentage return on equity after taxes for the corporation. If the market interest rate is 12.5%, do you think Oxnard Rims pleased its investor for the preceding year?
What will be an ideal response?
Suppose you purchase a bond with a coupon of $30 for $1025. You sell it one year later for $1050. What rate of return did you earn? Report a percentage with two decimal places
What will be an ideal response?
If a developing country has sufficient reserves, the buying and selling of foreign currency by the central bank is:
A. likely to have a much smaller impact on the exchange rate than in developed countries. B. completely ineffective on the exchange rate. C. likely to have a much greater impact on the exchange rate than in developed countries. D. likely to have roughly the same impact on the exchange rate as in developed countries.
A pure monopolist:
A. will realize an economic profit if price exceeds ATC at the profit-maximizing/loss-minimizing level of output. B. will realize an economic profit if ATC exceeds MR at the profit-maximizing/loss-minimizing level of output. C. will realize an economic loss if MC intersects the downsloping portion of MR. D. always realizes an economic profit.