Mr. John made a Price Level Adjusted Mortgage (PLAM) of $100,000 loan for 30 years. Nominal interest rate is equal to 12% and payments are made monthly. The lender and borrower agreed that loan balance will be indexed to the CPI (Consumer Price Index) and adjusted annually. If the CPI is equal to 10% at the end of the first year, what is the value of the each monthly payments during the second year?
In: Finance
Mr. John made a Price Level Adjusted Mortgage (PLAM) of $100,000 loan for 30 years. Nominal interest rate is equal to 24% and payments are made monthly. The lender and borrower agreed that loan balance will be indexed to the CPI (Consumer Price Index) and adjusted annually. If the CPI is equal to 10% at the end of the first year, what is the value of the each monthly payments during the second year?
In: Finance
Host A and B are communicating over a TCP connection, and Host B has already received from A all bytes up through byte 99. Suppose Host A then sends two segments to Host B back-to-back. The first and second segments contain 30 and 70 bytes of data, respectively. In the first segment, the sequence number is 100, the source port number is 4321, and the destination port number is 80. Host B sends an ACK whenever it receives a segment from Host A, i.e., no delayed ACK.
In: Computer Science
x A monopoly faces the demand curve P = 110 — Q and has the cost function C (Q) = 10Q + Q2. Compare the total Q, profits, producer surplus, consumer surplus and DWL compared to perfect competition for: a. single-price monopoly, b. the perfectly price-discriminating monopoly, c. and a quantity-discriminating monopoly (block pricing) by considering one possible price schedule: sell its first 25 units (Q1) at P1 = 85 and sell an additional (Q2 — Q1) = —235 units at P2= = 230.
In: Economics
the avg price for 10 televsions from one manufacturer is $687. the avg price of 13 teles from the manufacturer is $705. The standard deviations are $23 and $42 respectively. Assume the price of the televisions for both manufacturers is normally distributed.
a) Is there sufficent evidence to suggest the first manufacturers televisions are less expensive than the second manufacturers?
b)If the sample size were increased to 36 and 38 respectively, how would this change your decision?
C)Do you consider the significance observed to be practical, statistical, or both?Why?
In: Statistics and Probability
.A price-discriminating monopolist sells in two separate markets such that goods sold in one market are never resold in the other. It charges p1 = £4 in one market and p2 = £8 in the other market. At these prices, the price elasticity in the first market is –0.90 and the price elasticity in the second market is –1.30. Which of the following actions is sure to raise the monopolist’s profits?
a. Raise p1.
b. Raise p1 and lower p2.
c. Lower p2.
d. Raise both p1 and p2.
e. Raise p2 and lower p1.
In: Economics
You trade in two types of options. First, you purchase 7 call option contracts on the Euro with an exercise price of 1.25. Second, you sell 8 put option contracts on the Euro with an exercise price of 1.22. The fees/prices on the contracts are $.04 (calls) and $.03 (puts). Forward Rates for the Euro are 1.210-11 $/E. If contract sizes for Euros are 125,000 options per contract and the final price of Euros is 1.40. $/E, how much profit/loss have you made from participation in options?
In: Finance
To an economist, "value" is the same as
| marginal cost. |
| the minimum price that people are willing to pay for another unit of the good. |
| consumer surplus. |
| total surplus. |
| marginal benefit. |
Value and price can be compared by noting that
| value is what we must pay, while price is what we are willing to pay. |
| value is always greater than price. |
| they are the same thing. |
| price is what we must pay, and value is what we are willing to pay. |
| value is what the seller receives when we buy a good, and price is what we must pay when we buy a good. |
A supply curve is the same as a
| marginal benefit curve. |
| total benefit curve. |
| marginal cost curve. |
| deadweight loss curve. |
| total cost curve. |
Which of the following occurs when a market is efficient?
| Consumer surplus is as large as possible. |
| The sum of consumer surplus and producer surplus is maximized. |
| Consumer surplus equals producer surplus. |
| The marginal benefit exceeds the marginal cost by as much as possible. |
| Producer surplus is as large as possible. |
The "equality of opportunity" idea of fairness claims
| it's not fair if the rules aren't fair. |
| only a first-come, first-served system of allocating resources is fair. |
| private property can be transferred under government order. |
| the results and the rules should both be fair. |
| a society should make the poorest as well off as possible. |
In: Economics
Zero-coupon bond. Wesley Company will issue a zero-coupon bond this coming month. The projected bond yield is 10%. If the par value is $5,000, what is the bond's price using a semiannual convention if
a. the maturity is 15 years?
b. the maturity is 35 years?
c. the maturity is 50 years?
d. the maturity is 100 years?
In: Finance
Suppose that a two-year bond with a principal of $100 provides coupons at the rate of 6% per annum semiannually. Suppose that the zero-rates are
| Maturity (years) | Zero Rate (%) |
| 0.5 | 5.0 |
| 1.0 | 5.8 |
| 1.5 | 6.4 |
| 2.0 | 6.8 |
What is the current theoretical price of the bond?
- please use formulas and explain step by step
In: Finance