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1) Which project(s) should be chosen if the discounted payback must be achieved in at least 4 years? 2) Which project(s) should be chosen if internal rate of return period is the criteria for each pro
Assume that consumer spending is $1,000, government expenditures are $250, investments by industry are $200, and the excess of exports over imports is $300. Compute the GDP. (please show your work)
Compute the GDP of Tanzania by using the following hypothetical information (all amounts are in trillions of dollars):
Discuss the principal limitations of monetary policy relative to current economic conditions?
With regards to current economic conditions, what is the effect of a large carry trade on U.S. monetary policy?
Problem 1. Do you think regulators should step in? Why or why not? Problem 2. How can ordinary investors protect themselves against losses at the hands of high-frequency traders using this tactic?
The variance of Willow is 0.2700, and the variance of Sky Diamond is 0.1300. The covariance of the returns between Willow Stock and Sky Diamond Stock is 0.0730. Calculate the correlation coefficient
Some of the empirical research suggests that the net interest cost to issuers is likely to be somewhat higher when a new issue is sold on a negotiated basis (the negotiations being with a single tea
a) Compute the IRR of this project. b) Compute the NPV of this project. c) To select a project would you use IRR or NPV? Explain. d) What is the economic interpretation of IRR and NPV?
If the investor allocates 30% of his money to Scott Corp. and the remaining 70% to Bill Corp and the correlation of returns of the 2 stocks is 0.5, what is the expected returns and standard deviatio
(a) Illustrate how to derive the covered interest rate parity condition. (b) Explain what a foreign exchange risk premium in the forward market is. Why does it exist?
Based on our discussion in class and on what you have read, in what ways can the large current account deficit in the US over the past several years be considered. a.) beneficial for the US economy?
In the context of a closed economy IS-LM model; (1) Under what circumstances would the following have no effect of the level of output? i. An increase in government spending. ii. An open market purcha
In principle could the Federal Reserve conduct monetary policy through the purchase and sale of stocks on the New York Stock Exchange? Do you see any possible drawbacks to such a policy.
True or False and Explain. a) Savings and investment are juse two words for the same thing b) When I buy a share of Microsoft stock I have invested; when I buy a government bond I have not. c) Higher
If the quantity of money demanded exceeds the quantity supplied: a. the supply of money curve will shift to the left b. the demand for money curve will shift to the right c. the interest rate will ris
Question: What is the result of a price ceiling that is set below the equilibrium price? Question: Name 2 results of price ceilings. Do not mention Shortages or Surpluses.
As Beck's financial manager, you have access to insider information concerning a switch in product lines which would not change the growth rate, but would cut Beck's beta coefficient in half. If you
An increase in a firm's expected growth rate would normally cause the firm's required rate of return to
Create a brief investment strategy. Set a monetary goal, it could be a million dollars or some other dollar amount. Make the investment plan by considering the income level, age, and potential caree
What is the multiplier effect? What will the multiplier be when the MPS is 0, .4, .6, and 1? What will it be when the MPC is 1, .9, .67, .5, and 0? How much of a change in GDP will result if firms i
In the spot market, 1 U.S. dollar can be exchanged for 121 Japanese yen. In the 1-year forward market, 1 U.S. dollar can be exchanged for 125 Japanese yen. The 1-year, risk-free rate of interest is
Calculate the expected return on the portfolio [E (R)] of the following assets if you invest 20% in asset 1, 30% in asset 2, and 50% in asset 3. How and why will your answer change if you shift 20%
Question 1. Do normal demand/supply fluctuations move bond prices? Question 2. Or is it based on changes in the required yield (which is factored into the bond calculation, thus changing the prices)
Use a graph to determine the optimal solution, and check your solution algebraically. Fully interpret solution values.