Consider the following data about government debt and deficit in a given year:- real interest rate on government bonds = 5%- growth rate of real GDP = 5%- current debt-to-GDP ratio = 26%- primary budget surplus as a percentage of GDP = 3%%3D-Over this one-year period the debt-to-GDP ratio will haveO A. remained unchanged.O B. fallen by 0.3 percentage points.O C. risen by 0.3 percentage points.O D. risen by 3 percentage points.O E. fallen by 3 percentage points.

To solve the question, we first need to determine the current debt and surplus by assuming a value…

Consider the following data about government debt and deficit in a given year: - real interest rate on government bonds = 5% - growth rate of real GDP = 5% - current debt-to-GDP ratio = 26% - primary budget surplus as a percentage of GDP = 3% - Over this one-year period the debt-to-GDP ratio will have O A. remained unchanged. O B. fallen by 0.3 percentage points. OC. risen by 0.3 percentage points. O D. risen by 3 percentage points. O E. fallen by 3 percentage points.

Consider the following data about government debt and deficit in a given year: - real interest rate on government bonds = 5% - growth rate of real GDP = 5% - current debt-to-GDP ratio = 26% - primary budget surplus as a percentage of GDP = 3% - Over this one-year period the debt-to-GDP ratio will have O A. remained unchanged. O B. fallen by 0.3 percentage points. OC. risen by 0.3 percentage points. O D. risen by 3 percentage points. O E. fallen by 3 percentage points.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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On January 1, 20X8, Nutley Corporation had monetary assets of P2,000,000 and monetary liabilities of P1,000,000. During 20X8, Nutley’s monetary inflows and outflows were relatively constant and equal so that it ended the year with net monetary assets of P1,000,000. Assume that the comsumer price index was 200 on January 1, 20X8, and 220 on December 31, 20X8. In end of year constant pesos, what is Nutley’s purchasing power gain or loss on net monetary items for 20X8? 0b. 50,000 gainc. 100,000 gaind. 100,000 loss 8. At both the beginning and end of the year, Lang Co.’s monetary assets exceeded monetary liabilities by P3,000,000. On January 1, the general price level was 125. On December 31, the general price level was 150. How much was Lang’s purchasing power on net monetary itmes during the year?a. 0b. 600,000c. 750,000d. 1,125,000
Consider the following information listed showing past and projected federal revenue spending and GDP Figures are in billions Find the deficit or surplus and debt as a percentage of GDP in 2000 and 2010 In 2000Surplus was 220 the debt was 5000 and the GDP was 9811 In 2000 the surplus was __ % and the debt as a percentage of the GDP is ___ what percent ? In 2010 the deficit was -1406 the debt was 13000 and the GDP was 13935 2010 the deficit is ____ % and the debt as a percentage of GDP is what percent The deficit or surplus changed by ______ what percentage points and the debt changed by ____ what percentage points ? 2020 the deficit was -474 the projected debt was 19800 and the GDP is 10000
"At a market interest rate of 7% per year and an inflation rate of 5% per year, a series of three equal annual receipts of $100 in constant dollars is equivalent to a series of three annual receipts of $108 in actual dollars." Which of the following statements is correct?(a) The amount of actual dollars is overstated.(b) The amount of actual dollars is understated.(c) The amount of actual dollars is about right.(d) Sufficient information is not available to make a comparison.
GDP Growth in % Bivariate Fit of GDP Growth in % By Year 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 O r = 0.75 Or= .9 Or=0 2000 Or=-0.75 2005 ● 2010 Estimate the value of r based on the given scatterplot. Year 2015 2020
During the Post-WWII “Baby Boom” from 1946-1970, US GDP grew by an annualized _____ per year; in annualized percentage terms this is most likely the largest 25-year period of economic growth ever. (a) 2.3% (b) 3.2% (c) 6.7% (d) 7.6% (e) 9.2%
Use the table for the question(s) below. FCF Forecast ($ million) Year Sales 1 270 12.5% 32.40 Less: Income Tax (37%) (6.48) Less Increase in NWC (12% of Change in Sales) 3,60 Free Cash Flow 22.32 Growth versus Prior Year EBIT (10% of Sales) 0 240 OA. $4.27 OB. $7.47 OC. $12.8 OD. $5.12 2 290 7.4% 34.80 (6.96) 2.40 25.44 ACCE 3 310 6.9% 37.20 (7.44) 2.40 27.36 Banco Industries expect sales to grow at a rapid rate over the next 3 years, but settle to an industry growth rate of 4% in year 4. The spreadsheet above shows a simplified pro forma for Banco Industries. Banco industries has a weighted average cost of capital of 10%, $30 million in cash, $60 million in debt, and 18 million shares outstanding. If Banco Industries can reduce its operating expenses so that EBIT becomes 12% of sales, by how much will its stock price increase? 4 325.5 5.0% 39.06 (7.81) 1.86 29.388
The yield on the 10-year Treasury Note this year has gone from 2% to 3.1%, as a result the price of the Note has: a) Decreased b) Stayed the same c) Increased
Suppose that a company borrows $100,000 from investment pool at 14% compounded quarterly over 3 years. If the average quarterly general inflation rate is expected to be 0.35%, determine the equivalent equal quarterly payment series in constant dollars.
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Consider the following table for a seven-year period: Year 1 2 3 4 5 6 7 U.S. Treasury Bills 3.45% 3.30 4.20 4.62 2.42 1.30 1.03 Returns Average real return Inflation -1.15% -2.29 -1.19 0.61 -6.43 -9.35 -1.30 What was the average real return for Treasury bills for this time period? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. %

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