2. React to the following situation:
One of the employees you supervise asks you to have Friday off because some relatives arrive from the United States and he wants to share with them. You as your supervisor tried to give you the day off and it was not possible due to need for service. When informing the employee, he was upset and indicated that he would talk to the hospital administrator and when he left his office, he threw the door.
As a supervisor, what is your opinion of the employee's attitude and whether or not he followed the chain or unity of command? Explain, what has been the best attitude of the employee? (Minimum 200 words)

The National Health and Nutrition Examination Survey (NHANES) assesses the health and nutritional status of adults and children in the United States using data from interviews and direct physical examinations. From 1999 to 2002, 712 men between the ages of 20 and 29 were examined. The mean body weight in this sample was 183.0 pounds. The margin of error associated with this estimate for 95% confidence was plus or minus 3 pounds. What is the probability (expressed as a percent) that the true population mean weight of men between the ages of 20 and 29 is between 180 and 186 pounds?

Lakonishok Equipment has an investment opportunity in Europe. The project costs €10 million and is expected to produce cash flows of €1 million in Year 1, €1.4 million in Year 2, and €2.5 million in Year 3. The current spot exchange rate is $1.25 / €; and the current risk-free rate in the United States is 1.8 percent, compared to that in Europe of 1 percent. The appropriate discount rate for the project is estimated to be 10 percent, the U.S. cost of capital for the company. In addition, the subsidiary can be sold at the end of three years for an estimated €8 million. Use the exact form of interest rate parity in calculating the expected spot rates. What is the NPV of the project in U.S. dollars?

• Is inequality necessary? Is it good?
  • Describe economic inequality in America.
    • Compared with other countries or with the United States in the past, how unequal is the distribution of income?
    • Who is rich and who is poor ? Are there demographic differences between rich and poor Americans?
  • Should we equalize income for all Americans? Explain the utilitarian and Rawlsian arguments for egalitarian social policies.
  • Should we equalize income for all Americans? Explain alternative arguments against egalitarian policies, such as natural rights arguments (John Locke and Robert Nozick) and utilitarian arguments (Arthur Okun).
  • Are egalitarian policies gendered? Do women benefit more from egalitarian policies that reduce disparities in income? Why?

Which of the following are included in calculating this year's GDP?

a. Interest received on a security of the U.S. government

b. The purchases of a new automobile

c. The services of a gardener in weeding her garden

d. The purchase of a life insurance poliy

e. The money received by John when he sells his computer to Mary

f. The purchases of new office equipment by the U.S government

g. Unempolyment compensation benefits received by a former autoworker

h. A new apartment building built by a construction firm

i. Travel by people in Canada to the United States to visit Disneyland

Why do economics prefer to compare real GDP figures for different years instead of nominal GDP figures?

Absolute and Comparative Advantage

Use the table below to answer the questions concerning absolute and comparative advantages.

1.     Which country has an absolute advantage in producing lumber?

2.     Which country has an absolute advantage in producing automobiles?

3.     Which country has a comparative advantage, if any, in producing lumber?

4.     Which country has a comparative advantage, if any, in producing automobiles?

5.     Should the U.S. trade with Canada? If so, what should be imported and what should be exported?

6.     Should Canada trade with the U.S.? If so, what should be imported and what should be exported?

How would you define income inequality? How is income inequality measured? What has happened to income inequality in the United States since the end of the Second World War in 1945? What evidence can you provide to support your answer? What are the reasons for the changes in income inequality since 1945. Suggestion: Click here to visit the Web site for the documentary film Inequality for All. The site enables you to rent or purchase the film, if you choose. Or you can click on “Graphics Package” to download a free copy of informative graphics from the film. Take a look at those. Summarize what you learn, and share your thoughts.

Part 5. Parity conditions

1a. Forecast the expected exchange rate in one year for the Russian ruble.

b. What parity condition does this rely on?

2a. Forecast the expected exchange rate in six months for the Brazilian real.

b. What parity condition does this rely on?

3a. What is the expected nine month forward rate for the Ghanaian cedi?

b. What parity condition does this reflect?

Q-2 (25p)        Let us assume that around Dec. 2019, the spot exchange rate between the Swiss Franc and U.S. dollar was 1.0485 (USD per SWF). Interest rates in the United States and Switzerland were 0.75% and 0.25% per annum, respectively with continuous compounding. Assume also that the four-month forward exchange rate was 1.0630 (US$ per SWF).

1. Is there an arbitrage opportunity for you to make money? (Hint: Recall how to find no-arbitrage forward price!)

2. If there is NO arbitrage opportunity, explain WHY?

3. If there is an arbitrage opportunity, using 1.0m USD or 1.0m SWF, how much arbitrage profit you can have in four-month in USD?

Suppose that the spot price of the Canadian dollar is U.S. $0.95 and that the Canadian dollar/U.S. dollar exchange rate has a volatility of 8% per annum. The risk-free rates of interest in Canada and the United States are 3% and 6% per annum, respectively. Calculate the value of a European call option to buy one Canadian dollar for U.S. $0.95 in nine months. Use put-call parity to calculate the price of a European put option to sell one Canadian dollar for U.S. $0.95 in nine months.

What is the CAD-denominated price of a European call option to buy one U.S. dollar for Canadian $1.0526(=1/0.95) in nine months?