Hostess Brands is selling off its assets after liquidation. A ...

[xroflmao]

Hostess Brands is selling off its assets after liquidation. A potential buyer for the Twinkies brand has found that the total revenue will be 3 billion a year if the brand is managed well and 1 billion a year if the brand is managed poorly.
 
  There is .6 (or 60 percent) chance of managing the brand well and a .4 (or 40 percent) chance of managing the brand poorly. What is the expected total revenue? A) 0.4 billion
  B) 1.2 billion
  C) 1.8 billion
  D) 2.2 billion

Question 2

Define net borrower, net lender, creditor nation, and debtor nation. Discuss the difference between a net borrower and a debtor nation.
 
  What will be an ideal response?

[Benayers]

Answer to Question 1

D

Answer to Question 2

A country that is borrowing more from the rest of the world than it is lending to the rest of the world is a net borrower. A country that is lending more to the rest of the world than it borrows from the rest of the world is a net lender. A country that during its entire history has borrowed more from the rest of the world than it has lent to the rest of the world is a debtor nation. A country that has invested more in the rest of the world than other countries have invested in it is a creditor nation. A net borrower is a country that is currently borrowing whereas a debtor nation has a stock of outstanding debt. Borrowing is a flow variable and the outstanding debt is a stock. Thus a net borrower could be a creditor nation that is currently borrowing or it could be a debtor nation that is currently borrowing and thereby increasing its debt.

[xroflmao]

Correct answers!

[Benayers]

Great! Please up vote