12. Suppose that a farmer is a price taker for potato sales with cost functions given by T C = 0.1q 2 + 2q + 100 MC = 0.2q + 2 The firm’s supply curve is given by

(a) q = 2P − 5

(b) q = 5P − 10

(c) q = 1/2P + 2

(d) q = 10P − 2

Consider the cost functions of Frank the farmer given above. If P = $6, the profit-maximizing level of output is

(a) 80

(b) 40

(c) 20

(d) 10

1. If d1=.15, What is N(d1)? (round to 4 decimal places)

2. S₀=105; X=100; r=.02; T=60 days; standard deviation of daily returns = .012; Assume 365 calendar days in a year and 255 trading days in a year. Assume N(d1) =0.76 and N(d2) = 0.74 (irrespective of your calculations for d1 and d2), what is the price of a call option according to Black-Scholes? (round to 2 decimal places)

Bond H, described in the table below, is sold for settlement on 20 April 2020.

What is the full price (per 100 of par value) that Bond H will settle at on 20 April 2020? Round your answer to three decimal places.

In which of the following situations can multiple regression be performed? Select all that apply.

Select all that apply:

• predicting next year's salary of a free-agent baseball player, given the player's previous season's salary and the player's age

• predicting the price of a book, in dollars, given the number of pages

• predicting a 40-year-old man's height, in centimeters, given his shoe size and his weight, in kilograms

• predicting the grade of a research paper (out of 100 points), given the word count

Use the information below and answer the questions that follow:
Selling price                             = N$650.00
Lease and rent payments          = N$850 000.00
Cost of goods sold                    = N$70.00
Interest expense                      = N$ 100 000.00
Labour costs                            = N$80.00
A)    What is the company’s contribution margin?           
B)    Calculate the break-even point in units.               
C)   If the company wants to earn a profit of N$200 000.00 instead of breaking even, what is the number of units that the company must sell?   

Apple Incorporated (AI) board of directors has indicated that they will repurchase AI’s stock effective July 1st, 2020. You currently hold 100 AI’s stock. Explain in detail, the concept of “information content” to be derived from the board of director’s pronouncement. Discuss the likely impact of this pronouncement on AI’s stock price? In respect of this announcement, discuss the concept of the “signaling theory” and how will managers of AI be placed in an advantageous position ahead of the normal investor? (Word count limit(250-500)

8. Consider a firm producing under conditions of pure competition, in a market characterized by the following demand and supply conditions:

            P = 200 – Qd (Demand);                    P = 100+ Qs (Supply)

a) What is the market equilibrium price and quantity?

b) If a representative firm has a Marginal Cost function that is depicted below, at what level of output would it maximize its individual profits?

MC = 50 + 100q

c) If all of the firms were identical, how many would constitute the market?

Question 4

A. Show that a dominant bidding strategy in an English auction is to continue bidding as long as the price in the auction is less than your true value of the good.

B. Suppose that there are six bidders in an English auction for an antique 1950s Vaporizer. Each has his or her own private value for the vintage machine. In ascending order, these values are $50, $60, $70, $80, $90, and $100.

a. What will be the winning bid?

b. What will be the winning bid if the highest three bidders collude?