15. Annual percentage yields to maturity of Treasury Bills, Notes, and Bonds on January 24, 2020 are shown below Date 1 Mo 2 Mo 3 Mo 6 Mo 1 Yr 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 20 Yr 30 Yr 01/24/20 1.54 1.55 1.54 1.55 1.55 1.49 1.48 1.51 1.61 1.70 2.00 2.14 On this date, a 3-month T-Bill offering par value of $100,000 sold for a) 98,483.36 b) 99,235.88 c) 99,616.48 d) 99,871.83 dollars. e) 99,924.46
Q: Consider how the COVID-19 pandemic has caused major disruption in global supply chain affecting the…
A: A macroeconomic model called the AD-AS, or aggregate demand-aggregate supply model, uses the link…
Q: Given the total cost equation: TC = 144 +2Q+ Q² what is the average cost when the firm produces at…
A: Total cost is sum total of the fixed cost and variable cost. The average cost is calculated by the…
Q: In a building construction project, 7,500 feet of insulated ductwork is required. The ductwork is…
A: Total cost refers to the overall expenses incurred in a project. Total revenue minus total cost…
Q: The Nicor family is planning to purchase a new home 3 years from now. If they have Php 12,000,000…
A: As given Present worth = 12,000,000 Interest rate = 12% per year time = 3 years FV = PV(1+r)n…
Q: If the sole employer in a market is a monopsonist, the equilibrium number of workers hired will be…
A: A monopsonist is a person or a firm that is the only buyer of a specfiic resource or product when…
Q: K Find equilibrium GDP using the following macroeconomic model (the numbers, with the exception of…
A: The value of all the goods and services produced over the course of a given time period on a…
Q: How exchange rates can affect a firm’s global sales.
A: We know that In the global market, products and services are traded on the basis of the exchange…
Q: pose the utility function for goods x and y is given Utility = U(x,y) = 2x+y Suppose price of…
A: Utility function shows the functional relationship between the utility and goods consumed.…
Q: Consider a government that raises money in a two-good economy by taxing good 1 at a rate of t per…
A: Revealed preference theory, established by economist Paul Anthony Samuelson in 1938, is a way of…
Q: What might Sony and the U.S government have done differently to discourage future such attacks on…
A: 1) Given that this isn't the first time Sony has been hacked, they need to have taken more proactive…
Q: Who was affected by Hurricane Sandy Give few examples (not more than 4) and *explain how each is…
A: Tropical storms with hurricane characteristics can develop in the eastern Pacific, Caribbean, Gulf…
Q: Suppose a team of economists recently measured the total economic benefits of implementing the 2015…
A: Total Benefit : TB=B0+B1dQB2 Total Cost : TC=C0+C1dQC2 Let the difference between total benefits…
Q: PRICE (Dollars per unit) 140 70 50 egion etween W and X etween X and Y etween Y and Z each of the…
A: Price elasticity of demand is the proportion of the rate change in the quantity demanded of an item…
Q: Given the total cost equation: level of Q yields the minimum cost of production? TC = 32 + 2Q², what…
A: Average total cost is implied as the total of all production costs divided by the total quantity of…
Q: Suppose that one factory inputs its goods from two different plants, A and B, with different costs,…
A: Given that, Inputs of the factory from the plant A=4 Inputs of the factory from the plant B=7…
Q: Refer to the figures below and assume that price is fixed at $37,000 and that Buzzer Auto needs 4…
A: Demand refers to the quantity that a consumer wishes to buy at a given price in a given period of…
Q: Consumers view cake as an irreplaceable staple of any birthday party. Consumers also like to serve…
A: Price elasticity of demand The quantity requested price sensitivity is gauged by the price…
Q: Define Fair Trade
A: Meaning of Trade: We know that The term trade refers to the situation under which the products and…
Q: If the Canadian dollar is strengthening, then: it has been unpegged from other currencies. O it has…
A: The exchange rate in international trade is referred to as the price at which one country's currency…
Q: Today, one U.S. dollar exchanges for 110 Japanese yen. The next morning the same dollar exchanges…
A: USD/JPY refers to a ticker applied on denoting the currency rate of exchange for the U.S. dollar and…
Q: part D E
A: Hi! Thank you for the question, as per the honor code, we are allowed to answer three sub-parts at a…
Q: Firms in a competitive market can sell as much as they like at a market price of $16. The cost…
A: In the perfectly competitive market firm is price taker only. Individual firm can not influence the…
Q: Compared to predicted inflation of 3.2%, the risk-free rate is 4.8%. What will the new risk-free…
A: The rate of return on a hypothetical investment with regular payments made over a set period of time…
Q: of t per unit. The government is considering replacing these taxes with a lump-sum tax to the…
A: According to the idea of revealed preference, which was proposed by the American economist Paul…
Q: Suppose that an individual has a utility functions given by: U(X,Y)= 3X²+Y² Suppose also that the…
A: Given that the utility function is U(X, Y) = 3X2 + Y2 The individual's income = $1500 Price of X =…
Q: Which of the following concepts was included in the textbook reading "The Economics Book : Companies…
A: When talking about different types of markets, it can be said that markets are classified based on…
Q: A new wave-soldering machine is expected to save Brisbane Circuit Boards $15,000 per year through…
A:
Q: f a person performing a task has been achieving an 75 percent learning curve and if it took 53…
A: When the cost of units is used instead of time of unit, the relationship will often be referred to…
Q: will an increase in productivity affect the aggregate supply curve and the aggregate demand curve?
A: Productivity Productivity is a computation of the efficiency of production. It is the proportion of…
Q: Carefully explain what is happening in the market for leather belts. Indicate the impact if any on…
A: Demand curve shows association between quantity demand and price. Similarly, Supply curve depicts…
Q: Explain advantages and disadvantages of Internal Trade
A: Trade refers to the exchange of goods and services taking place between the buyers and the sellers.…
Q: The 1997 Asian crisis began when speculators attacked baht, the Thai currency. Thailand, like many…
A: Domino effect: It refers to a situation in which a country's economic problem spreads to similar…
Q: Demand Function: Qd=4,000−200p Supply function: Qs=100p−500 A president is presenting…
A: The per unit tax is imposed on the sellers (or producers). And hence it increase their marginal cost…
Q: For a monopoly, the demand and cost functions are: Demand: Q = 100 -0.20P Cost: TC= 10 + 60Q Solve…
A: A monopolist always maximizes profit where: Marginal Cost = Marginal Revenue MC = MR Total…
Q: 4. Assume a demand of Q=800-2P Assume this market is served by a monopoly. MC=AC = $20. a. Calculate…
A: Consumer surplus is the benefits the consumer receives by purchasing the products at the market…
Q: Suppose there are two goods beverage and pizza and two inputs land, T, and labor, L. Given atb=5009,…
A: A labor market is a gathering location for employees and employers. Employers seek the best…
Q: Use economic equivalence to determine the amount of money or value of i that makes the following…
A:
Q: Which among the following is true about social regulations? Select one: a) None of the answers…
A: There are many types of regulations. Two of them are social regulation and industrial regulation.…
Q: An apparel manufacturing plant has estimated the variable cost to be $21 per unit. Fixed costs are…
A: The break-even point is the point at which total cost and total revenue are equal, meaning there is…
Q: The diagram below shows the supply and demand curves for some product somewhere. price per unit (P)…
A:
Q: tephanie loans P400,000.00 from a bank with interest at 6% compounded annually. She agrees to pay…
A: Loan amount = P 400000 Annual interest rate (R) = 6% Period of the first payment (t) = 10 Years
Q: Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or…
A: Comparative advantage arises when the countries or the individuals involved in the trade would not…
Q: If P500,000 is deposited at a rate of 11.25% compounded monthly, determine the compounded interest…
A: The formula used in the compound interest is =P[1+(r/m)]mt-P A = the future value of the…
Q: A firm's accounting profit is equal to total revenue minus opportunity costs total revenue plus…
A: The expression “accounting profit means to the total revenue of an organization in the wake of…
Q: Table 7-2 The only four producers in a market have the following costs: Seller Evan Selena Angie…
A: Producer Surplus is the difference between the actual price a producer receives and minimum price he…
Q: A manufacturer of a product sells all that is produced. The total revenue is given by TR=7q, and…
A: Total revenue function of the manufacturer: TR=7q .......(1) Total cost function: TC=6q+1…
Q: A profi-maximizing monopolist will set its price Select One: a) along the elastic portion of its…
A: A monopolist is an individual, gathering, or organization that controls all of the market for a…
Q: With a nominal interest rate of 5%, the present discounted value of R100 to be received in two years…
A: Given, Interest rate (i) = 5%Future value = R 100Time = 2 years The present value (PV) factor is…
Q: In simple terms, what is a market? O The combination of competitors and customers O A place where a…
A: Market acts as an intermediary between the buyers and sellers. Buyers buys goods and services…
Q: Supply fucntion: QS=200P-700 Demand function: Qd=3000-100p If a goverment want to reduce the…
A: Demand and Supply Demand refers to the quantities of a commodity that the consumers are ready to…
Step by step
Solved in 2 steps with 1 images
- 108.) If a General Motors bond brings a 7% annual return, the nominal return on a US Treasury bond that is not inflation indexed is 4%, and the real interest rate is 2%, what is the expected annual inflation rate and default risk on General Motors bond, respectively? 2%, 3% 2%, 2% 4%, 1% 3%, 4%What is the discount yield, bond equivalent yield, and effective annual return on a $7 million commercial paper issue that currently sells at 98.75 percent of its face value and is 122 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your percentage answers to 3 decimal places. (e.g., 32.161))Suppose that you are obtaining a personal loan from your uncle in the amount of $20,000 (now) to be repaid in two years to cover some of your college expenses. If your uncle usually earns minimum 8% profit (annually) on his money, which is invested in various sources. 1) What minimum lump-sum payment two years from now would make your uncle happy? 2) If you pay yearly, how much should you pay each year? 3) If you pay every six months, how much should you pay every six months?
- A corporate bond maturing in 15 years with a coupon rate of 10.9 percent was purchased for $970 and it now selling for $1,000. 1. What will be its selling price in two years if comparable market interest rates drop 4.9 percentage points? (Hint: Use Appendix A-2 and Appendix A-4 or the Garman/Forgue companion website.) Round Present Value of a Single Amount and Present Value of Series of Equal Amounts in intermediate calculations to four decimal places. Round your answer to the nearest cent. $ 2. Calculate the bond's YTM using Equation 14.5 or the Garman/Forgue companion website. Round your answer to two decimal places. %d)Assume that all the information given previously is the same and the defaultrisk premium for corporate bonds rated AAA is 1.5 percent, whereas it is4 percent for corporate bonds rated B. Compute the interest rates onAAA- and B-rated corporate bonds with maturities equal to one year, twoyears, three years, four years, five years, 10 years, 20 years, and 30 years.A semiannual payment bond with a $1,000 par has a 7 percent quoted coupon rate, a 7 percent promised YTM, and 10 years to maturity. What is the bond's duration? If interest rates are expected to rise by one half of a percent, by how much would you expect the price to change using the modified duration equation? How much would you expect the price to change using convexity? You need to use the bond duration and convexity calculator to answer this question.
- 2. Suppose you bought a condo for $200,000 financing it with a $40,000 down payment of your own funds and a $160,000 mortgage loan from a bank. b. Now assume that, instead of (a), you only put down $20,000 and borrowed $180,000 to buy the condo. Assuming that the market value of your house has risen to $240,000 and ignoring interest and other costs, calculate your rate of return on your asset (ROA) and your rate of return on your equity (ROE).Recently, the European Central Bank (ECU) has been worried about inflation and thus needs to make a decision about interest rates, and thus the resulting bond prices. Assume we are talking about Euron an Savings Bonds (ESB) and you are given the following information: The European Savings Bond (ESB) has no expiration date: The ESB price =$1,000 the ESB has a fixed annual interest payment =$10, ' e ESB annual interest rate =10 percent. If the price of the ESB increases to $5,000, the interest rate will Multiple Choice ◻ rise to 50 percent. ◻ fall to 4 percent. ◻ fall to 5 percent. ◻ rise to 12 percent. ◻ fall to 2 percent.Suppose that you are forecasting one-year T-bill rates issued by Bangladesh Bank which are 5.25%, 6.15%, 8.50%, 9.25%, 10.10% in year 1,2,3,4 and 5 respectively. There is a liquidity premium of .15% per year for holding 3-year or longer-term bond. Would you be indifferent between purchasing these T-bills each year for the next 5 years or buy a 5-year Family Bond at 7.1% interest rate? Briefly illustrate your answer using the relevant theory of term structure.
- If your portfolio expected annual average total return was 10% and long-term inflation was about 3%, what would your REAL average annual returns be with a 100% equity portfolio? 10% 7% 3% 5% If you put your retirement funds in a savings account earning 0.5% and inflation was 3%, how much would you lose in value each year against inflation by not earning more than inflation on your retirement savings? 0.5% less 3% for minus 2.5% 3% 0.5% 10.2%Assume that 3 year Treasury note has no maturity premium and that the risk free rate is 5 percent. If the t note carries a nominal risk free rate of return of 13 percent and If the expected average inflation rate over the next 2 years is 9 percent. What is the expected inflation rate in year3. a. 9 b. 6 c. 12 d. 18 e. 7Need help. Assume that securitization combined with borrowing and irrational exuberance in Hyperville have driven up the value of asset-backed financial securities at a geometric rate, specifically from $4 to $8 to $16 to $32 to $64 to $128 over a six-year time period. Over the same period, the value of the assets underlying the securities rose at an arithmetic rate from $4 to $6 to $8 to $10 to $12 to $14. If these patterns hold for decreases as well as for increases, by how much would the value of the financial securities decline if the value of the underlying asset suddenly and unexpectedly fell by $6? Instructions: Give your answer as a whole number.