Discuss the increase in income inequality observed in the U.S. over the last 40 years from the perspective of the Heckscher-Ohlin Model. Analyze the potential causes of this increase and provide graphical illustrations if applicable.

Use the table below to answer the questions below.

The following prices are for call and put options on a stock priced at $50.25. The March options have 90 days remaining and the June options have 180 days remaining. In your profit answers below, assume that each transaction is scaled by 100, reflecting the size of option contracts.

a) (10 pts) You think the stock price will end up in the $49 to $51 range around mid March. Selecting from the March call options only, which option strategy from Chapter 7 would you recommend to provide a profit from this low-volatility forecast? What would be your option transactions be to set up this spread? What would be your maximum possible profit from this strategy?

2. (10 pts) Different Scenario:   You think the stock price will fall modestly and end up around $$44-$45 by mid-June.   Selecting from the June put options only, what option strategy would you recommend from Chapter 7 and what would your option transactions be to set it up?

-What would be your profit, in dollars, if the stock price turned out to be $44 at option expiration?

-What is the breakeven terminal stock price for this strategy?

8.You buy a 30 year zero coupon bond which will pay you $1000 in 30 years at an annual yield of ?? = 6% compounded once per year. A few minutes later the annual yield rises to ?? = 7% compounded once per year. What is the percent change in the value of the bond?

(Hint: the answer should be negative.)

9.You buy a 30 year zero coupon bond which will pay you $1000 in 30 years at an annual yield of ?? = 14% compounded once per year. 25 years later it will be a 5 year zero coupon bond. Suppose the interest rate on this bond will be 14%, what will the price of this bond be in 25 years?

10. You are offered an annuity that will pay you $200,000 once per year, at the end of the year, for 25 years. The first payment will arrive one year from now. The last payment will arrive twenty five years from now. Suppose your annual discount rate is ?? = 5.25%, how much are you willing to pay for this annuity? (hint: this is the same as the present value of an annuity.)

11. You would like to develop an office building. Your analysts forecast that it will cost you $1,000,000 immediately (time 0), and it will cost you $500,000 in one year (time 1). They forecast you can sell the building for $2,400,000 in two years (time 2). If your discount rate is ?? = 25%, what is the net present value of this investment?

12.What is the IRR of the project in question 12? (hint: if you are using an ordinary calculator, all you need to do is to solve a quadratic equation).

13.You consider developing a rental apartment complex. It will cost you $1000,000 per year for the next 2 years to build it, and $20,000 per year for maintenance starting the third year. The revenue will be $152,000 per year. What is the NPV of this project if the interest rate is 6%, and your planning horizon is infinite?

14.What is the fraction of housing in the assets of a typical US household? (1) 10%, (2) 30 %, (3) 50%, (4) 75%. Syntax: if your answer is (1) 10%, enter 1, not (1), and not 10%. Comment: you never need to remember the exact numbers (numbers change, estimates vary, you can always look up), but it is useful to know the approximate magnitudes for qualitative understanding (e.g. 10% and 50% in this question imply very different qualitative characteristics of the housing market) and for back of the envelope calculations w/o looking up every single number.

15.

How large was the decline in house prices during the housing bust of 2007-12? Pick the closest number:

(1) 10%, (2) 30%, (3) 50%, (4) 75%.

(Rock transshipment problem) Bamm Mining Company is currently extracting rock from two mines. Once it is              taken from the ground and loaded on a truck, it is sent to one of two plants for processing. The processed rock               is then shipped to one of three builders’ supply stores, where it is sold for landscaping purposes. The cost of         transportation, the supply available at each mine, and the processing capacity of each plant are given in the        following table.

              Cost per Ton for Shipping

              The cost of shipping from each processing plant to each store and the daily demand are as follows:

              Cost per Ton for Shipping

              Formulate a linear program that can be used to determine how to meet the demands of the three stores at the least cost. (Please define variables and set up the objective function and constraints of this problem using LP) (5 points)

It's managerial economics problem. Please expert solve well.

In 2010 some members of the Pakistan cricket team were accused of conniving
with bookmakers, if not to lose matches, then at least to instigate specific events
in the game. Does efficiency wage theory explain why such scandals are more
likely to arise for relatively low-paid sports people? In this light, what can be done
to reduce corruption in sports?

For each employee, first calculate gross pay. Then determine taxable income used to calculate federal income tax withholding, Social Security tax, and Medicare tax.

NOTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation.

1:An employee works 42 hours (42 - 40 were overtime hours) during a workweek in December of 2017. He earns $40.50/hour, with his employer paying 1.5 times the regular rate of pay for overtime hours. To date, he has earned $126,600 during the year. He has requested that his employer withhold 7% of gross pay, which is to be contributed to a 403(b) plan.

Taxable income for federal income tax withholding = $
Taxable income for social security tax = $
Taxable income for medicare tax = $

2:. An employee works 37 regular hours during a workweek in August of 2017. He was hired four years ago, earns a salary of $135,100/year, and is exempt from the overtime provisions of the FLSA. To date, he has received no compensation beyond his annual salary. He has requested that his employer withhold 8% of gross pay, which is to be contributed to a 401(k) plan.

Taxable income for federal income tax withholding = $
Taxable income for social security tax = $
Taxable income for medicare tax = $

3:An employee works 50 hours (50 - 40 were overtime hours) during a workweek in December of 2017. He earns $9,500/month, with his employer paying 1.5 times the regular rate of pay for overtime hours. To date, he has earned $109,700 during the year. He has requested that his employer withhold 13% of gross pay to contribute to a 403(b) plan.

Taxable income for federal income tax withholding = $
Taxable income for social security tax = $
Taxable income for medicare tax = $

For each employee listed, use the wage-bracket method to calculate federal income tax withholding. Refer to Appendix A, 2017 Federal Tax Tables in your textbook.

NOTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation.

1:Paul Yount (married; 7 federal withholding allowances) earned weekly gross pay of $605.

Federal income tax withholding = $

2:Paulina Robinson (single; 3 federal withholding allowances) earned biweekly gross pay of $1,245. She contributes $75 to a flexible spending account during the period.

Federal income tax withholding = $

3:Lacey Kunis (single; 2 federal withholding allowances) earned monthly gross pay of $3,090. For each period, she makes a 401(k) contribution of 11% of gross pay.

Federal income tax withholding = $

4:Francine Stewart (married; 4 federal withholding allowances) earned semimonthly gross pay of $1,420. She contributes $125 to a cafeteria plan during the period.

Federal income tax withholding = $

6.

Question 6

John Jones is deciding on one of two career choices, before retiring in 40 years time.

Choice 1

John can go to a prestigious graduate school for two years and obtain a degree. Including tuition and living expenses, he expects to pay $75,000 at the end of each year for two years while at school. After graduating, he expects to land a demanding job that pays $150,000 at the end of the third year, and grows at a constant rate of 5% each year (so at the end of the fourth year he expects 150,000*1.05 etc.) He will retire in 38 years after finishing graduate school.

Choice 2

John can continue in his present job. He expects to be paid $84,000 at the end of the year, and expects his salary to increase by 6% every year, paid at the end of each year. He expects to work for 40 years before retiring.

If John’s discount rate is 10%, which career choice should he pursue?

conclusion summary at the end show formulas

Question 1

Simon Dlamini is enrolled for a course in quantitative methods at his home university. Simon lives on the Atlantic seaboard and loves surfing. Every swell is a good reason not to study – and as a result he is not performing too well in his course.

The course is assessed via three assessments: a take home assignment (20%), a mid-term test (30%) and a final test (50%). He has already received his home assignment and mid-term test results and knows what he should get for his final test in order to pass the course. Simon managed to get his hand on the results of a previous class, and based on these results he would like to estimate what his final test mark could be. The results of the previous class are shown in the table below.

1. Decide which linear regression model (with the assignment grade (A) or Midterm (M) or both as independent variable) is the better model to describe the final test score and motivate your selection.

The remaining answers must be based on the model that you have selected in a.

2. What is the total variation in final test grade that is explained by the independent variable(s) that you have selected?

3. Is the overall regression model statistically significant? Test at the 5% level of significance using the model that you have selected in a. For this test formulate the appropriate null and alternative hypothesis, determine the region of acceptance, use an appropriate test statistic and draw the statistical and management conclusions.

4. Write down the linear regression equation in algebraic format using A for the assignment grade, M for the midterm grade and F for the final test grade.

5. Compute Simon’s expected final test grade (out of 50) if he scored 12/20 for his assignment and 13/30 for his midterm test.

6. Compute the 95% confidence interval of the mean test grade for Simon (with his 12/20 assignment grade and 13/30 midterm test grade). Comment on his likelihood of passing the course.