What Is the Net Interest Income in Dollars If the Spot

question 108

Multiple Choice

What is the net interest income in dollars if the spot prices at the end of the year are $1.35/£ and €1.35/$ and the liabilities instead cost 7 percent instead of 8 percent?

• A)$1,080,000.
• B)$116,592.59.
• C)$100,567.45.
• D)$112,677.94.
• E)$120,009.76.

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Definitions:

Inelastic Demand

A market scenario where the quantity demanded of a good or service changes minimally in response to price changes.

Perfectly Inelastic

A situation where the quantity demanded or supplied of a good does not change regardless of the changes in its price.

Perfectly Elastic

A situation in economics where the demand or supply for a good is completely responsive to changes in price, resulting in an infinite elasticity.

Mutual Interdependence

A situation in which a change in price strategy (or in some other strategy) by one firm will affect the sales and profits of another firm (or other firms). Any firm that makes such a change can expect its rivals to react to the change.