The price of Jamaican Blue Mountain coffee is $100 per bag in 2018. In 2019, it rises to $110 per bag. However, the overall quantity of Jamaican Blue Mountain coffee does not change. What is the most likely explanation?

(A) Both supply and demand increase.

(B) Both supply and demand decrease.

(C) Supply increases, while demand decreases. (D) Supply decreases, while demand increases.

Which of the following is the best example of an inferior good?

(A) A Lamborghini. (B) Instant coffee. (C) Silk scarves. (D) Electricity.

Which of the following is the best summary of Karl Popper's definition of 'science?'

1. (A) Science is the study of the natural world, through observation and experimentation.
2. (B) Science is a set of statements that can be falsfied with data.
3. (C) Science is a systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions about the universe
4. (D) ... Kanye is the GOAT.

Which of the following pairs of goods is most likely to be substitutes?

(A) PS4 and Fortnite.

(B) Marijuana and potato chips. (C) Xbox and Nintendo Switch. (D) Guns and roses.

Suppose that an oil cartel effectively increases the price of oil by 100 percent, leading to a supply shock in both Country A and Country B. Assume that both countries were in the long-run equilibrium (full employment) at the same level of output and prices at the time of the shock.

(a) Describe the short-run impact of this supply shock on prices and output in each country. Do not forget to support your answer on a graph.

(b) Now assume that the central bank of country A takes no stabilizing-policy actions (i.e. central bank of Country A does not try to stabilize output). After the short-run impacts of the adverse supply shock become apparent, the central bank of Country B increases the money supply to stabilize output. Compare the long-run impact of the adverse supply shock on prices and output in each country (taking into account the reaction of the Central Banks described before). Support your answer with a graph.

A firm facing a price of $10 in a perfectly competitive market decides to produce 100 widgets. If its marginal cost of producing the last widget is $12 and it is seeking to maximize profit, the firm should

Suppose AT&T’s current stock price is $100 and it is expected to either rise to 130 or fall to 80 by next April (assume 6-months from today). Also assume you can borrow at the risk-free rate of 2% per 6 months. Using the binomial approach, what would you pay for a call option on AT&T that expires in 6-months and has a strike price of $105? A strike price of $110?

The current price of a 6-month zero coupon bond with a face value of $100 is B1. If a 9-month strip with a face value of $100 is currently trading for B2, find the forward interest rate for the 6 to 9 month period. Solve by both continuous compounding and quarterly compounding. Write your answers for the following:

10. Six-month spot interest rate for quarterly compounding.

11. Nine-month spot interest rate for quarterly compounding.

12. Forward rate (6 to 9 months) for quarterly compounding.

13. Six-month spot interest rate for continuous compounding.

14. Nine-month spot interest rate for continuous compounding.

15. Forward rate (6 to 9 months) for continuous compounding.

16. What is the guaranteed fair price of a 3-month T-Bill to be delivered at 6 months from now, assuming quarterly compounding?

17. What is the guaranteed fair price of a 3-month T-Bill to be delivered at 6 months from now, assume continuous compounding?

B1 = 97.65

B2 = 96.65

CAN YOU PLEASE SHOW WORK

Demand for good X is X = 100 – 4P, where P is the market price of X. A monopolist supplies this market and has a cost function 5X.

When the monopolist produces his optimal level of X, what is the resulting deadweight loss in the economy?

Could you draw the graph with curves?

(a.) $180
(b.) $200
(c.) $222
(d.) $285

1. The current spot price for a stock is $100, using a binomial model, in every period it has been determined that the probability for this stock to go up is 70%, in this case the stock will increase in value a 12 %. If the stock goes down, the value will decrease 13%. For a call option with strike price of $186  and after 12 periods:

            1) Calculate the values of the factor "u" and "d".

            2) Show a diagram with the binomial development of the price for 3 periods.

            3) Calculate theoretically the minimum number of times the stock should go up in order to exercise the call option.

            4)Calculate the probability of exercising the call option.

1. Suppose that an asset price is $100 and that its daily volatility is 1.6%.
   1. What would be a two-standard deviation move in the asset price in two days?
   2. You think that the asset price at the end of five days will be between $100 and 110. How confident should you be if you assume returns are normally distributed with mean 0?
   3. Again assuming normality (mean 0), what’s the probability that the stock price will be 90 or less at that time?

Given the following yields and coupons for bonds with $100 of par value, determine the price for each bond. Maturity 1, annual coupon 10.000%, annual effective yield 8.000%. Maturity 2, annual coupon 4.000%, annual effective yield 8.979%. Maturity 3, annual coupon 20.000%, annual effective yield 9.782%.

The current price of a 6-month zero coupon bond with a face value of $100 is B1. If a 9-month strip with a face value of $100 is currently trading for B2, find the forward interest rate for the 6 to 9 month period. Solve by both continuous compounding and quarterly compounding. Write your answers for the following:

14. Nine-month spot interest rate for continuous compounding.

15. Forward rate (6 to 9 months) for continuous compounding.

16. What is the guaranteed fair price of a 3-month T-Bill to be delivered at 6 months from now, assuming quarterly compounding?

17. What is the guaranteed fair price of a 3-month T-Bill to be delivered at 6 months from now, assume continuous compounding?