Loose Leaf for Foundations of Financial Management Format: Loose-leaf
Loose Leaf for Foundations of Financial Management Format: Loose-leaf
17th Edition
ISBN: 9781260464924
Author: BLOCK
Publisher: Mcgraw Hill Publishers
Question
Book Icon
Chapter 14, Problem 1DQ
Summary Introduction

To explain: The government groups which compete for funds in the U.S based capital market.

Introduction:

Capital Markets:

These are the type of financial markets in which buyers and sellers are involved in a trade of commercial securities like bonds, stocks, etc.

Expert Solution & Answer
Check Mark

Answer to Problem 1DQ

In the U.S. based capital markets, the government groups which compete for funds are:

 1. The federal government

 2. The government agencies 

 3. The state and local governments

Explanation of Solution

In the capital market of the United States the government groups which compete for funds are as follows.

The federal government

In this form of government, power is divided amongst the federal and state government. The collection of funds is imperative for the fulfilment of various purposes, such as education, public welfare, construction of roads, bridges, and highways.

The government agency

It is a government organization that is established by either legislation or by executive powers. It is a permanent or quasi-permanent agency whose main obligation is to handle and perform the specific administrative functions. It requires financial capital to cater to the promotions of various health and education-related programs, construction of roads, dams, highways, and public utilities like water, electricity, etc.

The state and local governments

The state government is an administrative body that makes and executes various laws and duties for a particular state. The local government handles and measures the performances within a particular geographical area. They need a budget for the welfare of the public, roads and highways constructions, and other public utilities like water, electricity.

All of the above-mentioned government groups compete with one another and other corporations for a limited supply of financial capital. 

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
A. What is the amount of the annuity purchase required if you wish to receive a fixed payment of $200,000 for 20 years? Assume that the annuity will earn 10 percent per year.B. Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1 million and the annuity earns a guaranteed annual return of 10 percent. The payments are to begin at the end of the current year.C. Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1 million and the annuity earns a guaranteed annual return of 10 percent. The payments are to begin at the end of five years. I need help solving question C on a financial calculator.
John wants to buy a property for $105,000 and wants an 80 percent loan for $84,000. A lenderindicates that a fully amortizing loan can be obtained for 30 years (360 months) at 6 percentinterest; however, a loan fee of $3,500 will also be necessary for John to obtain the loan.a. How much will the lender actually disburse?b. What is the APR for the borrower, assuming that the mortgage is paid off after 30 years (fullterm)?c. If John pays off the loan after five years, what is the effective interest rate? Why is it differ-ent from the effective interest rate in (b)?d. Assume the lender also imposes a prepayment penalty of 2 percent of the outstanding loanbalance if the loan is repaid within eight years of closing. If John repays the loan after fiveyears with the prepayment penalty, what is the effective interest rate?
It is now January 1. You plan to make a total of 5 deposits of $500 each, one every 6 months, with the first payment being made today. The bank pays a nominal interest rate of 14% but uses semiannual compounding. You plan to leave the money in the bank for 10 years. Round your answers to the nearest cent. 1. How much will be in your account after 10 years? 2. You must make a payment of $1,280.02 in 10 years. To get the money for this payment, you will make five equal deposits, beginning today and for the following 4 quarters, in a bank that pays a nominal interest rate of 14% with quarterly compounding. How large must each of the five payments be?
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Business/Professional Ethics Directors/Executives...
Accounting
ISBN:9781337485913
Author:BROOKS
Publisher:Cengage
Text book image
Business Its Legal Ethical & Global Environment
Accounting
ISBN:9781305224414
Author:JENNINGS
Publisher:Cengage
Text book image
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Text book image
International Financial Management
Finance
ISBN:9780357130698
Author:Madura
Publisher:Cengage