Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 14 years to maturity, and a coupon rate of 7 percent paid annually. If the yield to maturity is 11 percent, what is the current price of the bond?

Early Sociologists

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Choose one of the following early sociologists. Which of them is most relevant in understanding our current society in the United States and today’s world? Why? Make sure you offer a detailed set of arguments to support your position.

a) Auguste Comte
b) Jane Addams
c) Karl Marx
d) Max Weber
e) W.E.B. DuBois

Freddy and Frieda Finance are looking to buy a house. They find a house that they like costing $400,000 and have a $100,000 as a down payment meaning they will need a mortgage loan of $300,000 if they pay their closing costs in cash. Help them evaluate some mortgage options.

1. Nautical Bank offers a 30-year fixed rate mortgage with a nominal annual rate of 3.125%. What would be the Finances’ monthly payment under this loan?

2. Construct an amortization schedule for the 30-year Nautical Bank loan in #1 (see section 5-18 of the textbook). What will be the Finance’s loan balance after 7 years of payments (after payment 84)?

3. Bank of United States offers a 15-year fixed rate mortgage with a nominal annual rate of 2.5%. What would be the Finance’s monthly payment under this loan?

4. Construct an amortization schedule for the 15-year Bank of United States loan in #3 (see section 5-18 of the textbook). What will be the Finance’s loan balance after 7 years of payments (after payment 84)?

Freddy and Frieda Finance are looking to buy a house. They find a house that they like costing $400,000 and have a $100,000 as a down payment meaning they will need a mortgage loan of $300,000 if they pay their closing costs in cash. Help them evaluate some mortgage options.

1. Nautical Bank offers a 30-year fixed rate mortgage with a nominal annual rate of 3.125%. What would be the Finances’ monthly payment under this loan?

2. Construct an amortization schedule for the 30-year Nautical Bank loan in #1 (see section 5-18 of the textbook). What will be the Finance’s loan balance after 7 years of payments (after payment 84)?

3. Bank of United States offers a 15-year fixed rate mortgage with a nominal annual rate of 2.5%. What would be the Finance’s monthly payment under this loan?

4. Construct an amortization schedule for the 15-year Bank of United States loan in #3 (see section 5-18 of the textbook). What will be the Finance’s loan balance after 7 years of payments (after payment 84)?

a) Mario Barnotoli wants to buy designer furniture from Poland for his mansion in Roma, Italy. Current spot rate is PLN 4.2555/EUR and the price for each set of designer furniture is PLN30,000. The annual inflation over the coming year for Poland and Italy are expected to be 6.5% and 2.5% per annum respectively. Assume purchasing power parity holds. How much EUR would Mario needs if he intends to purchase three sets of Polish designer furniture one year from now?

b) S. Krisnamoorthy is planning to purchase his dream motorcycle, a Harley V-twin next year. The Harley V-twin is currently selling at USD 12,500 in United States. However, S.Krisnamoorthy can directly purchase his dream motorcycle in MYR from Harley Davidson of Kuala Lumpur. The current spot rate is MYR4.200/USD and the current inflation rate in United States is 2% whilst in Malaysia is 5%. Assuming 60% complete pass through, what will the price of Harley V-twin be in MYR one year from now?

1. What is fiscal policy and who controls it?

2. What are the two basic fiscal policies that can be used to try to get the economy out of a recession? Name three Presidents who used the government spending technique. Name three Presidents who used the tax technique.

3. Estimate the impact of a $500 billion increase in government purchases, using an MPC of .6. (Use the simple multiplier formula from my notes.)

4. Estimate the impact of a $287 billion tax cut by calculating the change in GDP using an MPC of .6. (Use the simple multiplier formula for tax changes)

5. What is a budget deficit?

6. What are two costs of running a budget deficit for a long period of time?

7. As a percentage of GDP, in what period of time did the United States run the largest budget deficit?

8. The national debt of the United States has increased since 2000. What is one significant policy from the Bush Administration that increased the debt? What is one significant policy from the Obama Administration that increased the debt? What is one significant policy from the Trump Administration that increased the debt?

If the demand for loanable funds shifts to the left and the supply of loanable funds shifts to the right, then the real interest rate rises.

Select one:

True

False

Question text

In the open economy macroeconomic model of the U.S. economy, national savings is equal to the difference between domestic investment and net capital outflow.

Select one:

True

False

Suppose residents of the United States desired to decrease their purchases of foreign assets. Ceteris paribus, the real exchange rate would decrease and the quantity of dollars exchanged in the market for foreign-currency exchange would decrease.

Select one:

True

False

Question text

Suppose that the U.S. imposes an import quota on cars and trucks. The import quota makes the real exchange rate of the U.S. dollar depreciate and the real interest rate in the United States decreases.

Select one:

True

False

Question text

A U.S. corporation borrows funds to build a factory in the U.S. and a factory in China. Borrowing for factories in both locations is included in the U.S. demand for loanable funds.

Select one:

True

False

Purchasing Power Parity If the current spot rate between the U.S. dollar and the Swedish krona was $1 = 7.6123 krona, and if the inflation rate in the United States was 5.7 percent and in Sweden it was 2.7 percent, then what would be the expected spot rate in one year? (Round your answer to 4 decimal places.)

Purchasing Power Parity If the current spot rate between the U.S. dollar and the Swedish krona was $1 = 7.6423 krona, and if the inflation rate in the United States was 6.0 percent and in Sweden it was 3.0 percent, then what would be the expected spot rate in one year? (Round your answer to 4 decimal places.)

Exchange Rate Risk A U.S. firm is expecting cash flows of 16.00 million Mexican pesos and 21.00 million Indian rupees. The current spot exchange rates are: $1 = 11.521 pesos and $1 = 45.545 rupees. If these cash flows are not received for one year and the expected spot rates at that time will be $1 = 11.285 pesos and $1 = 45.025 rupees, then what is the difference in dollars received that was caused by the delay? (Round your answer to 4 decimal places.)