Suppose a 15-year bond with $100 face value, 5.50% coupon rate and quarterly coupons is currently trading at par. All else constant, if the yield to maturity of the bond suddenly changes to 8.00% APR, what will happen to this bond’s price?

e. Your company has an issue of $100 par value annual coupon bonds with 8 years remaining until maturity. The annual coupon rate is 4.10%, along with the current price $92.00 of the bonds. What is the yield to maturity on the bonds?

What is the present value of $100 per month at a discount rate of 6%, if the first payment is received 5 years from now and the last payment is received 18 years from now?

Given a 6 percent discount rate compounded quarterly, what is the present value of a perpetuity of $100 per month if the first payment does not begin until the end of year five?

You are planning to save for retirement over the next 25 years. To do this, you will invest $3,000 a quarter in a stock account and $1,000 a quarter in a bond account. These investments will be made at the beginning of each quarter. The return of the stock account is expected to be 8%, and the bond account will pay 4%. When you retire, you will combine your money into an account with a 6% return. How much can you withdraw each month (starting one month from the retirement date) from your account assuming a 20-year withdrawal period?

Now that you are going to save 100 €/month, you decided to save those 100€ per month in a bank account that offers a 2% interest rate compounded monthly, till the day you retire (that is to say, in 20 years). Please answer the following questions:

If you decide to do your deposits at the end of every month (similarly to ex.1, so your first deposit will be in one month from today) in a bank account that offers a 2% interest rate compounded monthly, and the deposits will increase in a 0.1% month after month, and you keep on doing so for the next 20 years:

1. Draw the timeline (at least the first five periods) with its corresponding numeration of periods and cashflows in their corresponding points                                                                                                                                                                                                                      (10 points)

2. how much money will you have at the end? Show the workout                                                                                                         (10 points)

3. What would it happen if the growth rate and the interest rate is the same?                                                                                      (10 points)

Consider the Monty Hall problem.Verify the results using by writing a computer program that estimates the probabilities of winning for different strategies by simulating it.

1. First, write a code that randomly sets the prize behind one of three doors and you also randomly select one of the doors. You win if the the door you selected has the prize (Here, we are simulating ’stick to the initial door’ strategy). Repeat this experiment 100 times and compute the average number of wins.

2. Next, try simulating the switching strategy. Find the door the host will open and change your initial door with the door not opened by the host. Also repeat this experiment 100 times and compute the average number of wins. If you did everything right, the first code should yield the probability of winning as ≈ 1/3 and the second code should yield ≈ 2/3. You can use any programming language you want (MATLAB, Python etc.)

Chapter 6 Problem A consumer finds only three products, X, Y, and Z, are for sale. The amount of utility which their consumption will yield is shown in the table below. Assume that the prices of X, Y, and Z are $10, $2, and $8, respectively, and that the consumer has an income of $74 to spend. Product X (Price $10) Product Y (Price $2) Product Z (Price $8) Quantity Utility Marginal Utility per $ Quantity Utility Marginal Utility per $ Quantity Utility Marginal Utility per $ 1 42 1 14 1 32 2 82 2 26 2 60 3 118 3 36 3 84 4 148 4 44 4 100 5 170 5 50 5 110 6 182 6 54 6 116 7 182 7 56.4 7 120 (a) Complete the table by computing the marginal utility per dollar for successive units of X, Y, and Z to one or two decimal places. Remember the marginal utility per dollar would be calculated by first getting the marginal utility which is the change in utility as quantity increases and then dividing it by the price. When doing Quantity 1 you are going from 0 units to 1 unit. The utility for 0 units would be $0. (b) How many units of X, Y, and Z will the consumer buy when maximizing utility and spending all income? Show this result using the utility maximization formula. (Meaning they need to spend all of their income of $74) (c) Why would the consumer not be maximizing utility by purchasing 2 units of X, 4 units of Y, and 1 unit of Z?

How much is the price of a perpetuity paying $1000 per year, if the discount rate is 8.0% and its first payment is in 3 years?

Write a Java program called RevenueAdvanced to calculate the revenue from a sale based on the unit price and quantity of a product input by the user. (use if and if-else statements)
• The discount rate is
o 0% for the quantity purchased between 1 and 49 units.
o 10% for the quantity purchased between 50 and 99 units.
o 15% for the quantity purchased between 100 and 149 units.
o 25% for the quantity purchased greater than or equal150 units.
New: Catch any invalid inputs as the following, if so, output a warning message and end the program.
o Employee Number: should be nine digits, no zero leading, non-negative, and no decimal points.
o Item Price: should be within the range [0.25, 100], and non-negative.
o Quantity: non-negative, and no decimal points.

Demo (1) a successful run:
Welcome to "Temple" store
Enter item price: 10
Enter quantity: 60
The item price is: $10.0
The order is: 60 item(s)
The cost is: $600.0
The discount is: 10.0%
The discount amount is: $60.0
The total is: $540.0
Thank You for using "Temple" store

Demo (2) a failed run:
Welcome to "Temple" store
Enter item price: -30
This is not a valid item price.
Please run the program again
Thank You for using "Temple" store

Demo (3) another failed run:
Welcome to "Temple" store
Enter item price: 10
Enter quantity: -90
This is not a valid quantity order.
Please run the program again
Thank You for using "Temple" store

90) The difference between a perfectly competitive firm's total revenue and its total cost is

A) always zero.

B) greatest at the profit-maximizing level of output.

C) always positive.

D) always negative.

91) Currently kidneys are allocated based on the needs of each perspective recipient, their blood type, and the urgency of their case. An alternative way to allocate kidneys is to go by the order in which patients were placed on the waiting list. In that case, the allocation of resources is made using

A) personal characteristics.

B) market price.

C) auction.

D) first-come, first-served

93) Suppose the price of a football is $20.00 and the price of a basketball is $10.00. The ________ of a football is ________.

A) relative price; 1/2 basketball per football

B) relative price; 2 basketballs per football

C) opportunity cost; $20.00

D) opportunity cost; $10.00

94) The supply curve for CDs shows the

A) maximum price that consumers are willing to pay if a given quantity of CDs is available.

B) maximum price that producers must be offered to get them to produce a given quantity of CDs.

C) minimum price that producers must be offered to get them to produce a given quantity of CDs.

D) minimum price that consumers are willing to pay if a given quantity of CDs is available.