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Q. Assume you are thinking of buying a $1000 face-value coupon bond with a coupon rate of 10%, a maturity of 3 years and a cost of $1079.
a. Is yield to maturity going to be above or below 10%? Why?
b. Write down equation that can be solved for yield to maturity of this bond: that is, equation that equates Current value of bond payments to cost of bond.
c. Estimate Current value of bond when interest rate is 8%.
d. Must yield to maturity be above or below 8%?
e. Estimate Current value of bond when interest rate is 5%.
f. Must yield to maturity be above or below 5%?
Explain how much money willyou have earned when the bond reaches maturity in five years.
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Afterward on same day Jane Harris discussed a loan for $5400 at same bank. Exemplify after these transactions, the supply of money.
Explain how supreme as well as comparative advantages were used in your simulation.
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Do sibs have the expected effect. Explain. Holding medic and feduc fixed, by how much do sibs have to increase to reduce predicted years of education by one year.
Illustrate what is the products price after the imposition of the tariff. what is the domestic value added before and after the imposition of the tariff.
All this is known to both players. Suppose both players behave according to the level-k thinking model discussed in class. Two players simultaneously guess a number.
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As your client is intent on investing aggressively, you will want to include the "beta" associated with each instrument relative to the S&P 500 Index.
decides not to play by the rules of the game. Then illustrate what could the final equilibrium position be.
Assume that equilibrium real GDP is 800 billion, potential gdp is 900 billion, the mpc is .80, and the mpi is .40 . What is the size of the GDP gap.
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