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Suppose a consumer’s preferences can be represented by the utility function U(X,Y) = Min (2X,Y). Also, suppose the consumer has $300 to spend and the price of Good X is PX = $3 and the price of
If the marginal cost ofplantingand harvesting an acre is $7000 per acre for each of the five acres, how many acres should the farmer plant and harvest?
Microhard has issued a bond with the following characteristics:
How can you take advantage of these rates to earn a riskless profit? Assume that the Pure Expectation Theory for interest rates holds.
Assume that the pure expectations theory for the term structure of interest rates holds, no liquidity or maturity premium exists, and the bonds are equally risky.
One year T-bill rates over the next 4 years are expected to be 3%, 4%, 5%, & 5.5%. If 4-year T-bonds are yielding 4.5%, what is the liquidity premium on this bond?
1-year T-bill rates are expected to steadily increase by 150 basis points per year over the next 6 years. Determine the required interest rate on a 3-year T-bond and a 6-year T-bond if the current
Little Monsters Inc. borrowed $1,000,000 for two years from Northern Bank Inc. at an 11.5% interest rate. The current risk-free rate is 2% and Little Monsters’s financial condition warrants a de
The one-year interest rate over the next 10 years will be 3%, 4.5%, 6%, 7.5%, 9%, 10.5%, 13%, 14.5%, 16%, 17.5%. Using the pure expectations theory
Debt issued by Southeastern Corporation currently yields 12%. A municipal bond of equal risk currently yields 8%. At what marginal tax rate would an investor be indifferent between these two bonds?
Consider the decision to purchase either a 5-year corporate bond or a 5-year municipal bond. The corporate bond is a 12% annual coupon bond with a par value of $1,000. It is currently yielding 11.5%.
What is the yield on a $1,000,000 municipal bond with a coupon rate of 8%, paying interest annually, versus the yield of a $1,000,000 corporate bond with a coupon rate of 10% paying interest annually?
Where r is the interest rate (assumed constant) and there are no storage costs. For the purposes of this problem, assume that a futures contract is the same as a forward contract.
Distinguish between Intermediate goods and final goods
Distinguish between current account and capital account of balance of payment account. Mention any two transactions of capital account.
What is a tax? Explain with the help of suitable examples the basis of classifying taxes into direct and indirect taxes.
Explain the concept of deflationary gap. Explain any two measures by which a Central Bank can attempt to reduce the gap.
What is fiscal policy? What possible fiscal policy measures can be taken with respect to expenditure and income to correct excess demand and deficient demand in the economy?
The following figures are based on budget estimates of Government of India for the year 2001 – 2002
Compare and interpret the four periods regarding the deficit spending. Focus on the changes in the percentages during each period and during the specific periods above, explain the variations in the
Why are exports included in the estimation of domestic product by the expenditure method? Can the gross domestic product be greater than the gross national product? Explain
Distinguish between collusive and non-collusive oligopoly. Explain the following features of oligopoly.
What is the intended purpose for the Thailand expansion - Eliminate similarities with other resources and makesure this report is ready to submit through originality
Is the demand for the following elastic, moderate elastic, highly elastic? Give reasons.Demand for petrol Demand for text books
According to the law of comparative advantage, what should be the distinguishing characteristics of the goods a nation produces?