Problem
1. What would you estimate the eurodollar deposit rate to be if the domestic U.S. dollar deposit rate is 6½ percent, the reserve requirement on time deposits is 2 percent, and the combined cost of taxes and deposit insurance amounts to 10 basis points (1 @10 percent)?
2. Explain in terms understandable to a non-economist why, for example, when interest rates rise sharply, the subsequent headline in the newspaper may say "Bond Prices Plunge in Active Trading."
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.