Question a:
What is the difference between fiat and commodity money? Which type of money currently exists in the United States?
Question b:
Which type of money (fiat or commodity) is Bitcoin? Defend your answer.
Question c
What is the difference between a debt market and an equity market?
Question d
What is a derivative instrument?
Question e
How do derivatives redistribute risk?
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Question a: What is the difference between fiat and commodity money? Which type of money currently...
What is the difference between commodity money and fiat money? Why do people accept fiat currency in trade for goods and services?
QUESTION 4 True or False: The difference between commodity money and fiat money is that one has inherent value and the other is money that is used to buy an Italian car. True False QUESTION 5 People hold currency for three reasons, one of which is the transactions motive (ie, the need to conduct a transaction using currency). Of the following, which would have the smallest transactions motive? A drug dealer A gambling bookie The purchasing department of IRSC A...
(a) What is the difference between ‘commodity money’ and ‘fiat’ money? Give examples of each. (2 marks) (b) Explain the ‘classical dichotomy’. (2 marks) (c) Use a diagram showing the relationship between the ‘value of money’ and the ‘price level’ to explain the effect on the price level and the value of money of an increase in money supply. (2 marks) (d) “If a government decides to pay for their spending by printing money they are said to levy an...
Chapter 12: What is money? What are the three functions of money? What is the difference between fiat money and commodity money? How can banks affect the money supply? What is the reserve ratio? What is the money multiplier? How did banking develop? How are required reserves different from excess reserves? Know the differences between bond markets, stock markets, banks, and mutual funds, and know the characteristics of bonds, stocks, banks, and mutual funds. How do banks help solve problems...
1. What is the difference between valuing a debt security and valuing the equity of a company? Explain 2. Assume interest rate on a company's debt is 6% and that the company's tax rate is 35%. Compute the cost of debt capital. Show your calculation. 3. Assume that a company's market beta equals 0.8, the risk-free rate is 5%, and the market return equals 8%. Compute the company's cost of equity capital. Show your calculation.
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What is the difference between exponential and logistic growth? Which type do most populations exhibit?
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