Consider the following three bonds:

Assume that coupons are paid every 6 months and the face values of all the bonds are $1,000.

(a) Determine the spot rate curve. (That is, determine s_0.5, s₁, and s_1.5 in yearly terms.) (Keep 4 decimal places, e.g. 0.1234)

     s_0.5:          s₁:            s_1.5 :

(b) Suppose that the 0.5- and 1.5-year zero-coupon bonds are available. Determine their respective prices. (Keep 2 decimal places, e.g. xxx.12)

     P_Z0.5:               P_Z1.5:

(c) Determine the forward rate f _0.5,1 (in yearly term) on a 6-month Treasury bill 6 months from now. (Keep 4 decimal places, e.g. 0.1234)

(d) Determine the forward rate f_0.5,1.5 (in yearly term) on a 12-month Treasury bill 6 months from now. (Keep 4 decimal places, e.g. 0.1234)

(e) Price the 1.5-year coupon bond 6 months from now. (Keep 2 decimal places, e.g. xxx.12)?

Consider the following information:

a. Calculate the return predicted by CAPM for a portfolio with a beta of 1.5. (Round your answer to 2 decimal places.)

Return???

b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)

Beta???

c.  If the simple CAPM is valid, is the situation above possible?

Yes or No???

discuss at least one pro and con of putting a price on a specific environmental good of your choosing. Using a specific resource or environmental amenity, discuss:

• What characteristics of the good restrict market valuation?
• In what instances would we want to put a price on the good?
• In what cases can a price actually harm the resource in question rather than help it?
• What estimation techniques did the researchers use in this National Park study and is this tool the best tool for estimating the value of your chosen amenity? Why or why not?
• In your response to a classmate's post, offer an alternative valuation method and briefly explain why it would be an acceptable tool for the amenity discussed.

200-400 Words

A New York City daily newspaper called "Manhattan Today" charges an annual subscription fee of $108. Customers prepay their subscriptions and receive 270 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $110 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $100 per hour. The company estimates that approximately 30% of the coupons will be redeemed.

Required:

Prepare the journal entry to recognize the sale of 10 new subscriptions, clearly identifying the revenue or unearned revenue associated with each performance obligation.

2. Given a 28-acre watershed with the following land use mix: 8 acres of SFR (38% impervious) on HSG-B soils, 5 acres of SFR (30% impervious) on HSG-C soils, and 15 acres of open space (park and playground) in fair condition on HSG-C soils. Watershed time of concentration is 21 minutes. The design return period 24-hour rainfall depth is 5.25 inches.

1. The runoff-weighted average curve number (CN) =                             
2. The area-weighted unit hydrograph peak rate factor (PRF) =                                                                 

c)    The runoff volume from a rainfall of 3.25 inches (watershed inches) =                             

d)   The runoff volume from a rainfall of 0.47 inches (watershed inches) =

Fill in the blanks.

Players,(....) , and payoffs are the defining characteristics of a game. At the Nash equilibrium of a game, everyone is playing a (....) .

A firms long-run supply curve is the portion of the [... ] cost that is above the marginal cost curve. The long-run competitive market equilibrium price must be such that all firms earn zero profit because [ ... ] .

If [.......] is greater than marginal cost the firm can increase profits by producing more output.

The following is an example of a source of monopoly power: [ ......] . The monopoly market output is inefficient due to [...] .

Amusement parks generally charge a lower price for admissions for children; this is an example of [.. ] price discrimination. If the amusement park could charge every individual their exact willingness to pay then this would be [ ...... ] price discrimination.

4. Which of the following pricing practices represents price discrimination? Explain.

a. Local businesses in a small college town offer a 10% discount to anyone showing a student ID card.

b. Fred’s Fridges advertises a one-day sale on refrigerators. The ad specifies that no phone orders are accepted and that the buyer must transport the refrigerator.

c. A hardback copy of the last Harry Potter book sold for $30 at an independent bookstore; but for $25 at the local outlet of a national bookstore chain.

d. Freshman tuition and fees at Penn State-University Park for academic year 2018-2019 was about $18,000 for Pennsylvania residents and $35,000 for out-of-state students (a pricing pattern that is typical of state universities.)

1. An increase in revenue always:
   1. increases stockholders' equity.
   2. increases assets.
   3. decreases stockholders' equity.
   4. decreases assets.

2. Which of the following journal entries would decrease stockholders' equity?
   1. Debit Prepaid Insurance and credit Cash.
   2. Debit Deferred Revenue and credit Service Revenue.
   3. Debit Supplies and credit Accounts Payable.
   4. Debit Insurance Expense and credit Cash.

3. In April, the Surf and Sand Hotel books and accepts a cash payment for $25,600 for vacation services to be provided during in July. The journal entry recorded in April will include a debit to:
   1. Cash and a credit to Deferred Revenue.
   2. Accounts Payable and a credit to Service Revenue.
   3. Accounts Receivable and a credit to Service Revenue.
   4. Prepaid Expenses and a credit to Service Revenue.

Define economics. explain briefly how the economic way of thinking-interms of rational, self interested people responding to incentives- relates to each of the following situations.

a. A student deciding whether to purchase a textbook for a particular class.

b. Government officials seeking more funding for mass transit through higher taxes.

c. A muncipality taxing hotel guests to obtain funding for a new sports stadium.

1-2. Some people claim the "economic way of thinking" does not apply to issues such as health care. Explain how economics does apply to both a low-income household and a middle-income household? Can the same phrase be applied to very high-income household?