A firm in the market environment characterized by monopolistic competition will most likely:
A. Continuetoexperienceeconomicprofitinthelongrun.
B. Haveawell-definedsupplyfunctionreflectingitsmarginalandaveragecosts.
C. Havemanycompetitors,eachofwhichfollowsitsownproductdifferentiationstrategy.
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A cell phone manufacturer has switched to high margin premium-priced products with the most innovative features as part of its product differentiation strategy. Which of the following other changes is
Anincreaseininventorylevels
B. AdecreaseinR&Dexpenditures
C. Anincreaseinadvertisingexpenditures
An investor purchases the bonds of JLD Corp., which pay an annual coupon of 10% and mature in 10 years, at an annual yield to maturity of 12%. The bonds will most likely be selling at:
A. par.
B. A discount.
C. A premium.
Which of the following is the most likely reason for an analyst to choose the direct method rather than the indirect method for analyzing a firms operating cash flows?
A. Toavoidmakingadjustmentsfornon-cashitems
B. Toidentifyoperatingcashflowsbysourceandbyuse
C. Tounderstandtherelationshipbetweennetincomeandoperatingcashflows
A forward rate agreement (FRA) that expires in 180 days and is based on 90-day LIBOR is quoted at 2.2%. At expiration of the FRA,90-day LIBOR is 2.8%. For a notional principal of USDI,000,000, the pay
A. USD 1,469.31.
B. USD 1,489.57.
C. USD 1,500.O0.