How do interest rates affect returns on other investments?
What will be an ideal response?
Answer: The expected returns on all investments are related. What you earn on one investment determines what you demand on another. When interest rates go up, investors demand a higher return on all other investments, and when interest rates go down, the return investors demand on other investments goes down. In effect, all the different investments compete for your investment dollars, and when interest rates go up, the other investments have to match that increase.
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Sprinkle Co. sells its product for $20 per unit. During 2013, it produced 60,000 units and sold 50,000 units (there was no beginning inventory). Costs per unit are: direct materials $5, direct labor $3, and variable overhead $1. Fixed costs are: $240,000 manufacturing overhead, and $30,000 selling and administrative expenses. Ending inventory under variable costing is
a. $90,000. b. $130,000. c. $200,000. d. $450,000.
More positive organizational outcomes are associated with _____ cultures.
Fill in the blank(s) with the appropriate word(s).