Reference no: EM13195283
1. A very small country's gross domestic product is $12 million.
a. If government expenditures amount to $7.5 million and gross private domestic investment is $5.5 million, what would be the amount of net exports of goods and services?
2. How would your answer change in Problem 1 if the gross domestic product had been $14 million?
3. Assume investors expect a 2.0 percent real rate of return over the next year. If inflation is expected to be 0.5 percent, what is the expected nominal interest rate for a one-year U.S. Treasury security?
4. A thirty-year U.S. Treasury bond has a 4.0 percent interest rate. In contrast, a ten-year Treasury bond has an interest rate of 3.7 percent. If inflation is expected to average 1.5 percentage points over both the next ten years and thirty years, determine the maturity risk premium for the thirty-year bond over the ten-year bond.
5. You are considering an investment in a one-year government debt security with a yield of 5 percent or a highly liquid corporate debt security with a yield of 6.5 percent. The expected inflation rate for the next year is expected to be 2.5 percent.
a. What would be your real rate earned on either of the two investments?
b. What would be the default risk premium on the corporate debt security?
6. A Treasury note with a maturity of four years carries a nominal rate of interest of 10 percent. In contrast, an eight-year Treasury bond has a yield of 8 percent.
a. If inflation is expected to average 7 percent over the first four years, what is the expected real rate of interest?
b. If the inflation rate is expected to be 5 percent for the first year, calculate the average annual rate of inflation for years 2 through 4.
c. If the maturity risk premium is expected to be zero between the two Treasury securities, what will be the average annual inflation rate expected over years 5 through 8?
|
How to produce a buffer at ph
: How many mL of 12.0 M HCl should be added to 500 mL of 0.100 M Na2SO3 (Kb2 = 8.13 x 10-13 and Kb1 =1.5 x 10-7) to produce a buffer at pH of 7.00?
|
|
State change in internal energy down the isotherm
: What is the change in the internal energy of the system as the system travels down the isotherm from state A to state C? Change in internal energy down the isotherm = 0.000
|
|
What was the firms 2011 operating cash flow or ocf
: Suppose you also know that the firm's net capital spending for 2011 was $1,340,000, and that the firm reduced its net working capital investment by $63,000.
|
|
Explain examining a bacterium under the microscope
: A student is examining a bacterium under the microscope. The E. coli bacterial cell has a mass of m = 0.700fg (where a femtogram, fg, is 10?15g) and is swimming at a velocity of v = 2.00?m/s , with an uncertainty in the velocity of 8.00 %
|
|
Default risk premium on the corporate debt security
: What would be your real rate earned on either of the two investments and what would be the default risk premium on the corporate debt security?
|
|
State the change in the internal energy of the system
: What is the change in the internal energy of the system as the system travels down the isotherm from state A to state C? Change in internal energy down the isotherm
|
|
Calculate the values using standard potentials
: Calculate the following values at 25C using standard potentials as needed. E°cell, E cell, deltaG°rxn, and deltaGrxn
|
|
Compute the overall break-even point
: Compute the overall break-even point and the cash break-even point Then, compute the DOL, DFL and DCL using the simplified formulas provided for you in the chapter and reiterated in the notes.
|
|
Explain the formula for the complex formed from chromium
: what is the formula for the complex formed from chromium (iv), two moles of water,
|