MACROECONOMICS W/CONNECT
18th Edition
ISBN: 9781307253092
Author: McConnell
Publisher: Mcgraw-Hill/Create
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Question
Chapter 17, Problem 3RQ
To determine
Relationship between the current price of Asset X and the current price of Asset Y.
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Students have asked these similar questions
A share of stock currently costs $35. You can purchase either the shares, or options to buy the stock anytime this year at $38.50. These options cost $0.75 per.
What price must the stock rise to this year to make the stock options equally profitable (meaning equal capital gain) to purchasing the stock? (Assume you exercise the options/sell the stock at this price.)
What price must the stock rise to this year to make purchasing the stock options 6 times as profitable (meaning 6 times the capital gain) as purchasing the stock?
For this question, assume that the interest rate is greater than 0. Given this information and the information about the
payments provided below, rank the following three sequences of payments according to their present value:
"X"
"Y"
"Z"
2005
$190 $200 $210
2006
$200 $200 $200
2007
$210 $200 $190
O A. Y>X>z
O B, Z>Y>X
ocZ>X>Y
O D.X>Y>Z
O E. X>Z>Y
5. Josh wants to save for his college education. He plans to make equal monthly deposits for four years.
The savings account he has chosen will pay annual interest of 2% cornpounded monthly.
(1
r): - 1
a. Use the future value formula F = I(1 + r)' + A
' + A ( ¹² + 1)² - ¹) t to write an algebraic rule that expresses
?
the balance at the end of four years as a function of the amount Josh deposits each month.
(initial deposit is $0.00)
48
F(48 months) = 0(1+.02) " + A((1+.02)
.02
- 1)
48
Unit 4.1.1 →
4.1.4 (2
b. To which function family does this function belong? Explain your choice.
c. Josh wants to have $5,000 at the end of the four years. Write an equation that could be used to
determine how much Josh needs to save each month,
solve the equation.
then
(find the monthly deposit needed if you start with =0)
Chapter 17 Solutions
MACROECONOMICS W/CONNECT
Ch. 17 - Prob. 1DQCh. 17 - Prob. 2DQCh. 17 - Prob. 3DQCh. 17 - Prob. 4DQCh. 17 - Prob. 5DQCh. 17 - Prob. 6DQCh. 17 - Prob. 7DQCh. 17 - Prob. 8DQCh. 17 - Prob. 9DQCh. 17 - Prob. 10DQ
Ch. 17 - Prob. 11DQCh. 17 - Prob. 12DQCh. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 8RQCh. 17 - Prob. 9RQCh. 17 - Prob. 10RQCh. 17 - Prob. 1PCh. 17 - Prob. 2PCh. 17 - Prob. 3PCh. 17 - Prob. 4PCh. 17 - Prob. 5PCh. 17 - Prob. 6P
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