a) What are financial markets? What function do they (financial markets) perform? How would an economy be worse off without them (financial markets)?
b) Distinguish between the money and capital markets.
c) What major benefits do corporations and investors enjoy because of the existence of organized security exchanges (Break-even point and operating leverage) Allison Radios manufactures a complete line of radio and communication equipment for law enforcement agencies. The average selling price of its finished product is $180 per unit. The variable cost for these same units is $126. Allison Radios incurs fixed costs of $540,000 per year. What is the break-even point in units for the company? What is the dollar sales volume the firm must achieve in order to reach the break-even point? What would be the firm rsquo s profit or loss at the following units of production sold: 12,000 units? 15,000 units? 20,000 units? Find the degree of operating leverage for the production and sales levels given in part (c).