Microsoft wants to calculate the effect of a worldwide 5% price cut on its sales of Excel to clients in different countries. Microsoft sells Excel at different prices in U.S., Japan and Europe. Before the price cut U.S. sales were twice sales in Japan and Europe. If the price of elasticity of demand in the U.S., Japan and Europe are -3, -4, and -2 respectively, the worldwide sales rise by

A) 10%.

B) 15%.

C) 20%.

D) 25%.

I know that the answer is C but i want to know how to get it

2. The following table gives the age(in years) of 36randomly selected U.S. millionaires. The sample mean ? = 58.53 years. Assume that the standard deviation of ages of all U.S. millionaires is 13.0 years.

3. (a)Test at the 10% significance level whether the average year of all U.S. millionaires is above 55 years.

(b) What is the P-value of the hypothesis test in part (a)?

(c) Obtain a confidence interval corresponding to the hypothesis test in part (a).

(d)Does the interval in part (c) support the result in part (a)? Explain your answer.

4. The following table gives the age (in years) of 36 randomly selected U.S. millionaires. The sample mean x−=58.53 years. Assume that the standard deviation of ages of all U.S. millionaires is 13.0 years.  

1. Test at the 10% significance level whether the average year of all U.S. millionaires is above 55 years.

2. What is the P-value of the hypothesis test in part (a)?

3. Obtain a confidence interval corresponding to the hypothesis test in part (a).

4. Does the interval in part (c) support the result in part (a)? Explain your answer.

In explaining the taxation of Controlled Foreign Corporations, states that “a U.S. person that conducts business or invests abroad through a foreign corporation generally pays no U .S. income tax of the foreign corporation’s foreign-sourced earnings unless and until such earnings are distributed to the U.S. person or the U.S. person disposes of the foreign corporation’s stock.” Briefly explain the operation of the current “deferral system” and its replacement under the new tax law. (Not more than one page in explaining the deferral system and two pages in presenting the new law.)

Consider the world market for computers between the U.S. and China. Let the demand for computers in the U.S. be Du = 3500-2P and in China be Dc = 1800 - 3P. Let the supply of computers in the U.S. be Q u = 500 +P and in China be Qc = 200+2p

Suppose now that the importing country wants to impose an import tariff of $200 per computer. If this tariff is enacted, how much will the consumers in the importing country pay per computer? please draw a graph.

If the $200 tariff is enacted, how much revenue will it generate?

Construct an aggregate demand and aggregate supply diagram in which the U.S. economy is initially at long run equilibrium. Suppose the European Union significantly decreases its purchases of US. exports because of trade disputes that start a trade war. (12 points) a) Show on your graph, and clearly explain in words, what would be the short-run effect on the U.S. economy. b) Show on your graph, and clearly explain in words. how the self-correcting mechanism would bring the U.S. economy back into long run equilibrium.

Commute times in the U.S. are heavily skewed to the right. We select a random sample of 230 people from the 2000 U.S. Census who reported a non-zero commute time.

In this sample the mean commute time is 28.6 minutes with a standard deviation of 19.3 minutes. Can we conclude from this data that the mean commute time in the U.S. is less than half an hour? Conduct a hypothesis test at the 5% level of significance.

What is the $p$-value for this hypothesis test?

Your answer should be rounded to 4 decimal places

suppose you purchase a 7-year AAA-rated Swiss bond for par that is paying an annual coupon of 7 percent and has a face value of 1,300 Swiss francs (SF). The spot rate is U.S. $0.66667 for SF1. At the end of the year, the bond is downgraded to AA and the yield increases to 9 percent. In addition, the SF depreciates to U.S. $0.74074 for SF1.

a. What is the loss or gain to a Swiss investor who holds this bond for a year?
b. What is the loss or gain to a U.S. investor who holds this bond for a year?

3. Collateralized Debt Obligations (CDOs)

(a) are Asset-Backed Securities (ABS) that are based only on sub-prime mortgage loans in the U.S.

(b) are not usually rated by rating agencies as the underlying default-free government securities act as collaterals.

(c) are structured in tranches according to the underlying risk characteristics.

(d) (a) and (b) of the above

(e) (b) and (c) of the above

4. Which of the following was NOT a contributing factor to the sub-prime debt crisis in the U.S.?

(a) The series of cuts in the U.S. official interest rate from late 2001 to reach the level of 1% by early 2004.

(b) The unregulated growth of the CDO market in the U.S..

(c) The unregulated sub-prime mortgage market in the U.S. that constantly supplied assets to be securitized.

(d) The Quantitative easing that led to a four-fold increase in the U.S. money base between Dec 2008 to Apr 2014.

(e) Increased demand for higher-yielding AAA rated USD dollar denominated financial assets.

5. Home equity in relation to the mortgage loan market refers to

(a) The difference between the current market price of the mortgaged house and the remaining amount in the mortgage loan.

(b) The difference between the purchase price of the mortgaged house and the remaining amount in the mortgage loan.

(c) The difference between the face value of the mortgage loan and the remaining amount in the mortgage loan.

(d) The difference between the purchase price and the current market price of the mortgaged house.

(e) None of the above is true