A 100 g piece of granite and a 100 g piece of lead are placed in an oven that is at 100°C. The initial temperature of the pieces are 25°C. After a couple of minutes, neither one is at 100°C, but which one is warmer? Which one will reach 100°C first? How much energy will it take for both of the objects to reach 100°C?

Suppose the call price is $14.10 and the put price is $9.30 for stock option where the exercise price is $100, the risk free rate is 5 percent (continuously compounded), and the time to expiration is one year. Explain how you would create a synthetic stock position and identify the cost. Suppose you observe a $100 stock price; identify any arbitrage opportunity.

The quantity, q, of a certain skateboard sold depends on the selling price, p, in dollars, so we write q = f(p). You are given that f(100) = 15200 and f '(100) = −90.

(a) What does f(100) = 15200 tell you about the sales of skateboards?

When the price of the skateboard is $_________ , then ______ skateboards will be sold.

What does f '(100) = −90 tell you about the sales of skateboards?

If the price increases from $100 to $101, the number of skateboards sold would _______ (increase/decrease) by roughly________ skateboards

(b) The total revenue, R, earned by the sale of skateboards is given by R = pq. Find R '(p).(chose)

-R '(p) = p 'q

-R '(p) = pf '(p) + f(p)   

- R '(p) = p + q

-R '(p) = q

-R '(p) = f '(p) + f(p)

(c) If the skateboards are currently selling for $100, what happens to revenue if the price is increased to $101?
The revenue  ---Select--- (increases/decreases) by roughly $ _______.

Assignment 1 (assessment worth 10%)
Due Date Monday 8^th May by 5pm GMT+8

[Submission will be strictly observed. Make submission via Turnitin]

Question 1

An Australian investor holds a one month long forward position on USD. The contract calls for the investor to buy USD 2 million in one month’s time at a delivery price of $1.4510 per USD. The current forward price for delivery in one month is F= $1.5225 per USD. Suppose the current interest rate interest is 5%. What is the value of the investor’s position?

Question 2

A speculator can choose between buying 100 shares of a stock for $40 per share or buying 1000 European call options on the stock with a strike price of $45 for $4 per option. For the second alternative to provide a superior payoff to the first alternative at option maturity, must the stock price be above $50 or below $50 explain?

Question 3

Explain in detail the difference between the following terms:

(a) Intrinsic value of an option.

(b) Price of an option.

(c) Exercise price of an option.

Modify the code below to support specifying additional dice type in addition to a 6 sided dice.

For example, the program could support six-sided, eight-sided, 10 sided die.

HINTS: You will need to

• Create an enum type for the dice type and values
• Modify the parameter passing of some of the functions to pass the die type
• Adjust the actual code that simulates the die roll to generate a range of values appropriate to the user's selected die type.

Think about parameter passing. It is possible to do this with a very few modifications to the program.

//Program: Roll dice

#include <iostream>
#include <cstdlib>
#include <ctime>

using namespace std;

int rollDice(int num);

int main()
{
cout << "The number of times the dice are rolled to "
<< "get the sum 10 = " << rollDice(10) << endl;
cout << "The number of times the dice are rolled to "
<< "get the sum 6 = " << rollDice(6) << endl;

return 0;
}

int rollDice(int num)
{
int die1;
int die2;
int sum;
int rollCount = 0;

srand(time(0));

do
{
die1 = rand() % 6 + 1;
die2 = rand() % 6 + 1;
sum = die1 + die2;
rollCount++;
}
while (sum != num);

return rollCount;
}

Following life situations:
Husband/wife, two kids, 1 income, mortgage, good salary, some savings, and no college fund.

Create a 700- to 1,050-word analysis .

1-Describe the risk tolerance for this life situation

1. Which of the following statements is true?

Select one:

a. holding everything else constant, an increase in planned investment spending shifts the AE function downward, leading to a higher level of GDP

b. Most recessions start with a decrease in investment spending.

c. Economists think that decreases in consumer spending often follow decreases in investment spending.

d. Answers (a), (b), and (c) are all true

e. Answers (b) and (c) are both true

2. An increase in the market interest rate

Select one:

a. Will make any given investment project less profitable

b. Will cause companies to rely more heavily on financing their investment projects through retained earnings rather than borrowing.

c. Will reduce the rate of return for any given investment project.

d. Answers (a), (b), and (c) are all correct

3. Suppose the MPC is equal to 0.5. In the simple income and expenditure model, a $100 increase in investment spending will lead to a

Select one:

a. $100 increase in spending in the first round, and a total increase in spending of $500

b. $50 increase in spending in the first round, and a total increase in spending of $100

c. $100 increase in spending in the first round, and a total increase in spending of $200

d. Total increase in spending of $100 since an increase in investment spending does not create a multiplier effect

4. Holding everything else constant, when interest rates rise, this

Select one:

a. Does not affect the profitability of investment projects financed through retained earnings.

b. Makes any given investment project less profitable.

c. Does not affect the opportunity cost of an investment project financed through retained earnings.

d. Leads to a lower level of planned investment spending.

5. In the INCOME EXPENDITURE MODEL, the role of inventories is to

Select one:

a. Ensure that aggregate expenditure is equal to aggregate production

b. Provide a signal to producers to increase or decrease their prices

6. In the short run, an increase in the aggregate price level due to a shift in AD first results in

Select one:

a. A right shift in the SRAS curve.

b. A movement along the SRAS curve.

6. In the long run, the aggregate price level increases. This

Select one:

a. Is due to the short run AS curve shifting to the right and the economy producing a level of aggregate output that is not equal to its potential output.

b. Is due to the AD curve shifting to the right.

c. Has no effect on the level of aggregate production in the economy.

d. Results in the economy moving to the level of production where aggregate output exceeds potential output.

e. Answers (a) and (c) are both correct.

f. Answers (b) and (c) are both correct.

g. Answers (c) and (d) are both correct.

h. No change in the level of aggregate production.

i. A left shift in the SRAS curve.

7.

An increase in the interest rate, holding everything else constant,

Select one:

a.
Reduces investment spending since the cost of borrowing is now higher.

b.
Reduces consumer spending since households will respond to the higher interest rate by saving more

c.
Leads to a reduction in the level of aggregate demand for final goods and services

d. Answers (a), (b), and (c) are all correct.

8. Suppose the aggregate price level in the economy falls. Holding everything else constant, this will result in the wealth effect,

Select one:

a. Which will cause the AD curve to shift to the right.

b. Because the fall in the aggregate price level increases consumers; purchasing power and this increase in purchasing power will result in a downward movement along the AD curve.

c. Which will cause the AD curve to shift to the left.

d. Because the fall in the aggregate price level increases consumers’ purchasing power and this increase in purchasing power will result in an upward movement along the AD curve.

In April 2020, the price of US oil has turned negative for the first time in history. https://www.bbc.com/news/business-52350082
Briefly explain how a negative occurs and what negative price in oil may imply for the oil market.

Explain as fully as possible the following:

a. How is first degree price discrimination similar to second degree price discrimination?

b. How is first degree price discrimination different from second degree price discrimination?

c.Why is it possible for any price maker, including a monopolist, to practice first degree price discrimination?

d. Why is is very easy and common for many firms that are not monopolies to practice second- degree price discrimination. Provide two common examples you observe when you shop.