User Account

All Pages

Interest rate instead of alternative investments

Assignment Help Microeconomics
Reference no: EM131040214

Back in December 2008 short term Treasury Bills (maturity dates of a few days to one year) were at or near 0% interest. This means that if you purchased a $100,000 90 day T-Bill at the end of 90 days you would receive your $100,000 but that is all you would receive. There were no interest payments, since it was 0% interest-you only received your principle back.

Yet many millionaires and billionaires were purchasing tens of millions of dollars of these short term T-Bills. Explain why people were investing millions of dollars in these T-Bill at a 0% interest rate instead of alternative investments.

Reference no: EM131040214

Questions Cloud

Company with a rapidly growing customer base : You are the CIO of a small company with a rapidly growing customer base. Which CRM system would you use: an on-premise CRM system, an on-demand CRM system, or an open-source CRM system?
Statements about health care and war : Which of the following statements about health care and war is true? Choose the BEST answer.
Write the sample logistic regression equation : Developing the memo: In the body of the memo write the sample logistic regression equation. In the body of the memo interpret the meaning of the intercept and slopes for your fitted model
Effectiveness of future monetary policy : What is the current Federal Funds rate? What does that tell you about the effectiveness of future monetary policy? (Remember the Fed to counter a recession uses expansionary monetary policy that results in lower interest rates.)
Interest rate instead of alternative investments : Yet many millionaires and billionaires were purchasing tens of millions of dollars of these short term T-Bills. Explain why people were investing millions of dollars in these T-Bill at a 0% interest rate instead of alternative investments.
What made emancipation a military necessity : What made emancipation a " military necessity"? How much antiwar sentiment was there in the union and the confederacy?
Demand for loans leads : If $1,000 in reserves is added to the banking system that has a required reserve ratio of 20%, and the demand for loans leads to no excess reserves being left in the system, by how much will the money supply increase?
Discuss the main reasons why this perspective is relevant : Sociologists explain deviance by three (3) major perspectives: biological, functional conflict, and symbolic interaction. Identify your role, for example, as a parent and which perspective best reflects your personal experience. Discuss the main r..
Have each team locate several organizations : Have each team locate several organizations that use IOSs, including one with a global reach. Students should contact the companies to find out what IOS technology support they use (e.g., an EDI, an extranet, etc.) and what issues they faced in i..

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd