An artist buys scrap metal from a local steel mill as a raw material for her sculptures. Last year, she purchased $5,000 metal. With the steel she produced 10 authentic sculptures that she sold for $800 each to a local art dealer, then sold all of the sculptures to art collectors for an average of $1,000 each. The total value added of the artist is $2000. (Enter your response as an integer.) The real interest rate
1. is the interest rate that adjusts GDP for changes in prices.
2. is the interest rate that is quoted on a financial debt and a firm's assets.
3. is equal to the nominal interest rate minus the inflation rate.
4. is equal to the inflation rate minus the nominal interest rate.
Suppose an economy has an inflation rate of 3.5% and a bank makes a loan with an interest rate of 6.2%. In this case, the real interest rate is |3.2|%. (Enter your response rounded to one decimal place.)

Which of the following statements is correct? large corporations are taxed more favorably than sole proprietorships. corporate stockholders are exposed to unlimited liability. due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of u. s. businesses (in terms of number of businesses) are organized as corporations. most businesses (by number and total dollar sales) are organized as partnerships or proprietorships because it is easier to set up and operate in one of these forms rather than as a corporation. however, if the business gets very large, it becomes advantageous to convert to a corporation, mainly because corporations have important tax advantages over proprietorships and partnerships. most business (measured by dollar sales) is conducted by corporations in spite of large corporations’ often less favorable tax treatment, due to legal considerations related to ownership transfers and limited liability.

Stock a has a beta of 1.2 and a standard deviation of 20%. stock b has a beta of 0.8 and a standard deviation of 25%. portfolio p has $200,000 consisting of $100,000 invested in stock a and $100,000 in stock b. which of the following statements is correct? (assume that the stocks are in equilibrium.) (a) stock b has a higher required rate of return than stock a. (b) portfolio p has a standard deviation of 22.5%. (c) portfolio p has a beta equal to 1.0. (d) more information is needed to determine the portfolio's beta. (e) stock a's returns are less highly correlated with the returns on most other stocks than are b's returns.

Adrawback of short-term contracting as an alternative to making a component in-house is thata. it is the most-integrated alternative to performing an activity so the principal company has no control over the agent. b. the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality. c. it fails to allow a long planning period that individual market transactions provide. d. the buying firm cannot demand lower prices due to the lack of a competitive bidding process.