Currently, the spot rate is $1.28/£. As a trader, you believe that the British pound will appreciate significantly in the near future. You decide to speculate by buying a December call option with a strike price of $1.35/£ and a premium of $0.05/£. Please answer the following questions:

1. Explain briefly why buying a call option makes sense in this case.

2. How much is the intrinsic value of the option? And how much is the time value?

3. Please fill in the blanks of the table below.

Currently, the spot rate is $1.33/£. As a trader, you believe that the British pound will depreciate significantly in the near future. You decide to speculate by buying a December put option with a strike price of $1.35/£ and a premium of $0.05/£. Please answer the following questions:

1. Explain briefly why buying a put option makes sense in this case.

2. How much is the intrinsic value of the option? And how much is the time value?

3. Please fill in the blanks of the table below.

Keynes wrote in The General Theory: “If we speak frankly, we have to admit that our basis of knowledge for estimating the yield ten years hence of a railway, a copper mine, a textile factory … amounts to little and sometimes to nothing”. Keynes was not talking about periods of economic turmoil or crisis like that we are experiencing now, when confusion about what happens next is obvious to all. In Keynes’ view, a state of “near ignorance” was the normal state of affairs.

Please discuss Keynes’ concept of “uncertain” knowledge and what it may imply for our ability to (a) measure risk in portfolios of financial assets and to (b) make “rational” investment decisions.

Currently, the spot rate is $1.28/£. As a trader, you believe that the British pound will appreciate significantly in the near future. You decide to speculate by buying a December call option with a strike price of $1.35/£ and a premium of $0.05/£. Please answer the following questions:

1. Explain briefly why buying a call option makes sense in this case.

2. How much is the intrinsic value of the option? And how much is the time value?

3. Please fill in the blanks of the table below. Spot rate at maturity in December Exercise or not? Net profit Moneyness (ITM, ATM or OTM)

$1.20/£

1.25

1.30

1.35

1.40

1.45

You and your friend Paul want to have a bet on how fast it can take to reach another friend Peter who is near the star Sirius B. Knowing that the star has a proper length of 8.6 light years from Earth, Paul thinks that since the maximum speed of your ship is 70% that of the speed of light, it will take about 9 years to get there. However, you reason that around 12 years will make more sense.

a)      Who is right from the perspective of you and Paul?

b)      When you reach Peter and explain the bet, he disagrees about who was right, why is that?

Cohleland, a developing country, has a government that wants to encourage the country’s growth.

In each scenario, what policy would you recommend the government of Cohleland to enact in order to increase growth?

The country has an abundance of capital and labor with low levels of human capital and technology.The country has low levels of capital, human capital, and technology; however, there is plenty of labor.

The country has an abundance of capital and labor with low levels of human capital and technology. Also, Zackburgh, a rich city-state near Cohleland has been offering fast track citizenships to any person from Cohleland who has earned a college degree.  

Explain the phenomenon of induction that was studied in this activity (bringing a negatively charged plastic rod near an uncharged non-metal-coated styrofoam ball that is hanging freely and an uncharged metal-coated styrofoam ball that is hanging). For example, explain how a metal conductor such as a hanging ball of aluminum foil can be attarcted to a charged insulator even though the ball of foil has no net charge so that is is electrically neutral. Can two metal balls with no net charge attract each other? Explain. Can the process of induction cause a neutral conductor to be repelled from a charged insulator? Explain.

Thank you very much :)

TRUE OR FALSE

1. Immediately under the capsule is the cortex of the kidney.(2)

2. Each renal pyramid terminates as a renal papilla, which projects into a major calyx.(2)

3. The basic functioning unit of the kidney is the nephron.(2)

4. The more solids in solution, the lower the specific gravity.(2)

5. The detection of glucose in urine is usually performed with Benedict’s reagent.(2)

6. The largest gland, which lies under the skin of the cheek in front of the ear is the parotid gland.(2)

7. The uterus is a pear-shaped, thick-walled, hollow organ that consists of a fundus, corpus, and cervix.(2)

8. The opening of the submandibular duct is located under the tongue near the lingual frenulum.(2)