Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

Economics


Home >> Microeconomics

problem: Suppose the interest rate for a one-period bond is 4%.

a) What is the price of an asset paying (1,1,1) which means 1 after 1 period, 1 after 2 periods, and 1 after 3 periods.

b) What is the price of an asset paying (1.5,0,1.5)?

c) What is the price of an asset paying (0,0,3)?

d) What is the price of an asset paying (0,0,3,0,0,3,0,0,3)?

problem: Suppose the interest rate for a one-period bond is 4% between the current period and the next. Then the rate becomes 5% for ever.

a) What is the price of an asset paying (1,1,1) which means 1 after 1 period, 1 after 2 periods, and 1 after 3 periods.

b) What is the price of an asset paying (1.5,0,1.5)?

c) What is the price of an asset paying (0,0,3)?

d) What is the price of an asset paying (0,0,3,0,0,3,0,0,3)?

problem: Suppose that the one-period rate is 4%. describe why a two-period rate of 6% cannot be an equilibrium when individuals expect the one-period rate to remain constant.

problem: Suppose that the one-period rate is 4% and that the two-period rate is 6%. What sort of expectation for the one-period rate next period makes this situation an equilibrium?

problem: Consider an asset paying 1 next period and 2 in two periods. Suppose that the one-period rate is 4% and that it will remain constant. Show that a price of 2.5 is not an equilibrium price for this asset.

problem: Suppose that the annual rate of interest is 4%.

(a) What is the monthly rate?

(b) Consider a 3-year lease on a car that is worth $20,000 today. The first payment on the lease is next month. After 3 years the price of the car is estimated at $15,000. What is the monthly rent?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M9307

Have any Question? 


Related Questions in Microeconomics

Question suppose that there are only three types of fruit

Question: Suppose that there are only three types of fruit sold in the United States. Annual sales are 1,200,000 tons of blueberries, 5,400,000 tons of strawberries, and 11,000,000 tons of bananas. Suppose that of those ...

Question discuss ways in which you would develop a

Question: Discuss ways in which you would develop a performance measurement system for a firm that purchased a supplier of its intermediate goods. What information would you begin trying to preserve? How might you want t ...

Question 1 what is the participation rate if there are 125

Question: 1. What is the participation rate if there are 125 million people in the labor force, 100 million people employed, and 25 million not in the labor force? 2. Last year, Linus earned a salary of $25,000 and he sp ...

Question assume there are only two producers of tennis

Question: Assume there are only two producers of tennis rackets: Wilson and Prince. The market demand for tennis rackets is depicted by the algebraic formula P = 100 - Q, where P stands for price and Q stands for quantit ...

Question in june of 2009 the us house of representatives

Question: In June of 2009 the U.S. House of Representatives passed H.R. 2454, which introduced a "cap-and-trade" system to reduce carbon emissions associated with global warming. The federal government will issue a fixed ...

Question assume that a piece of property is purchased for

Question: Assume that a piece of property is purchased for $500,000. A 20% down payment is made and the rest is financed through a 30-year mortgage loan with a 5.25 % annual interest rate, compounded monthly. The loan wi ...

Question suppose that households change their preferences

Question: Suppose that households change their preferences so that they wish to consume more and save less in the current year. Since the households reduce savings, the interest rate in the economy increases. a. Show on ...

Question - after reading business cycles by christina d

Question - After reading Business Cycles By Christina D. Romer, answer this: What were the causes of business cycles before 1914? What happened to Business Cycles between 1929 and 1948? What was the history of Business C ...

Question it appears that in the twenty-first century by far

Question: It appears that in the twenty-first century, by far the biggest increase in Federal spending will occur in increased medical care expenditures for the aged and the poor. If this does indeed turn out to be a pol ...

Question adult iq scores have a bell-shaped distribution

Question: Adult IQ scores have a bell-shaped distribution with mean of 100 and a standard deviation of 15. Use the Empirical Rule to find the percentage of adults with scores between 70 and 130 If 250 adults are randomly ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As

Follow Us

© Copyright 2013-14 mywordsolution.com All rights reserved