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Author Question: The financial manager is concerned with A) minimizing the chance of insolvency. B) maintaining ... (Read 16 times)

mikaylakyoung

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on: Jul 10, 2018
The financial manager is concerned with
 
  A) minimizing the chance of insolvency.
  B) maintaining high levels of profitability.
  C) striking a balance between holding too much and too little cash.
  D) all of the above

Question 2

Josephine is seeking to expand her rare stamp collection. Each year, rare stamps increase in price at a three percent rate. She believes that if she invests her money for one year, she should be able to buy 16 stamps for what 15 stamps would cost today.
 
  What is her real interest rate (or reward for waiting)?
  A) Her real interest rate is about 4.23.
  B) Her real interest rate is about 5.33.
  C) Her real interest rate is about 6.33.
  D) Her real interest rate is about 6.67.


Jossy

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Reply #1 on: Jul 10, 2018
Answer to Question 1

D

Answer to Question 2

Answer: D
Explanation: D) The real interest rate or reward is given by - 1 where FV = 16, PV = 15 and
n = 1. We have: real interest rate or reward = - 1 = 0.0667 or 6.67.


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