+61-413 786 465

info@mywordsolution.com

## Economics

 Basic Economics Macroeconomics Microeconomics Business Economics Econometrics International Economics Managerial Economics Game Theory Public Economics

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 on the television show jeopardy contestants in the

Question: On the television show Jeopardy contestants in the final round must choose some part of their winnings to bet on their answer to an upcoming question, and the winner's bet is added to the amount he has already ...

### Question jones and smith have a contract that will produce

Question: Jones and Smith have a contract that will produce \$100 in benefits for each of them if they both carry out their duties under it. If Jones breaches the contract, he will create \$140 in benefits for himself, and ...

### Question assume that workers whose incomes are less than

Question: Assume that workers whose incomes are less than \$10,000 currently pay no federal income taxes. Suppose a new government program guarantees each worker \$5000, whether or not he or she earns any income. For all e ...

### Question according to shaw and barry deciding what sort of

Question: According to Shaw and Barry, deciding what sort of economic arrangements would best promote human happiness requires the utilitarian to consider many things. What are the five considerations mentioned by Shaw a ...

### Question a local finance company will loan 8000 to a

Question: A local finance company will loan \$8,000 to a home-owner. It is to be repaid in 24 monthly payment of \$498 each. The first payment is due 30 days after the \$8,000 is received. What interest rate per month are t ...

### Question the producer of a movie has sole rights to make

Question: The producer of a movie has sole rights to make DVDs of it and is thus a monopolist in that particular movie. Assume that Blockbuster Video also has a near-monopoly on retail rentals. The producer could charge ...

### Question how does a franchise contract in which the parent

Question: How does a franchise contract in which the parent company supplies ingredients to a franchise holder reallocate risk between the parties, as opposed to the situation faced by a non-franchise business and its sp ...

### Question in the solow growth model with labor-augmenting

Question: In the solow growth model, with labor-augmenting technological progress and population growth, if the production function is y= k^1/2, s= .15, depreciation= .02, n=.02 and g= .01: a. what is the steady-state le ...

### Question the moroccan monetary authority is using a heavily

Question: The Moroccan monetary authority is using a heavily managed float to keep the dirham at \$0.12 per dirham. Under current foreign exchange market conditions, nonofficial supply and demand would clear at \$0.15 per ...

### Question southern california edisons prices service quality

Question: Southern California Edison's prices, service quality, and investments in new facilities are pervasively regulated by governments under long-standing rules. Do you expect that a given decision will be made at a ...

• 13,132 Experts

## 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.

### 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