The rates of return on the students investment projects

Assignment Help Business Economics
Reference no: EM131009652

Three students have each saved . Each has an investment opportunity in which he or she can invest up to . Here are the rates of return on the students’ investment projects: Harry Ron Hermione If borrowing and lending is prohibited, so each student uses only personal saving to finance his or her own investment project, how much will each student have a year later when the project pays its return? Now suppose their school opens up a market for loanable funds in which students can borrow and lend among themselves at an interest rate . What would determine whether a student would choose to be a borrower or lender in this market? Among these three students, what would be the quantity of loanable funds supplied and quantity demanded at an interest rate of ? At ? At what interest rate would the loanable funds market among these three students be in equilibrium? At this interest rate, which student(s) would borrow and which student(s) would lend? At the equilibrium interest rate, how much does each student have a year later after the investment projects pay their return and loans have been repaid? Compare your answers to those you gave in part (a). Who benefits from the existence of the loanable funds market—the borrowers or the lenders? Is anyone worse off? Also provide supply and demand schedules to explain these answers. 

Reference no: EM131009652

Questions Cloud

Many firms in the bankruptcy every year : Many firms in the United States file for bankruptcy every year, yet they still continue operating. Why would they do this instead of completely shutting down?
Different conclusions about relative inflation : Year Price level Price level Exchange Real exchange rate For China for U.S rate 1997 100.0 100.00 0.12 0.12 1998 99.20 101.55 0.12 0.117 1999 97.81 103.77 0.12 0.113 2000 98.20 107.27 0.12 0.110 2001 98.91 110.29 0.12 0.108 2002 98.16 112.05 0.12 0.1..
Highlight the tension between two competing values : Remember that the best statement of the issue will... Highlight the tension between two competing values. Focus on whether the outcome would help everyone achieve their highest ethical goals instead of just taking care of yourself. How to ensure envi..
The rates of return on the students investment projects : Three students have each saved . Each has an investment opportunity in which he or she can invest up to . Here are the rates of return on the students’ investment projects: Harry Ron Hermione If borrowing and lending is prohibited, so each student us..
Thinking about what action will support good ethical results : After considering the duties that you have in this situation and after thinking about what action will support good ethical results, the time has come to make your final choice. Below is a list of all the options we've been exploring. In order to mee..
Charging prices closer to what consumers are willing to pay : Charging prices closer to what consumers are willing to pay for a good:
Marginal rate of technical substitution for labor : A perfectly competitive firm has Marginal Rate of Technical Substitution for labor with capital K/L . That is ?MRTS?_LK=K/L. The prices of labor and capital are P_L=1 and P_K=2 dollars respectively. The firm has decided that the lowest total cost the..
Works cited business law : Works Cited Business Law I (Burlington County College) Dynamic business Law, Third Edition. By Nancy Kubasek), M. Neil Browne, Daniel Herron, Lucien Dhooge, Linda Barkacs.After reading Chapter 10, did you purchase a defective item? Did you get injure..

Reviews

Write a Review

Business Economics Questions & Answers

  Compute total revenue at the three meal prices

Suppose you are the manager of a restaurant that serves an average of 400 meals per day at an average price per meal of $20. On the basis of a survey, you have determined that reducing the price of an average meal to $18 would increase the quantity d..

  What will its new price have to be

If the company will sell the number of units obtained in part d, and wants to maintain the same level of profit as last year, what will its new price have to be?

  Two-part tariffs valid-ethical economic strategies

Why or why not? More generally, are pricing strategies such as odd pricing, price discrimination, cost-plus pricing, and two-part tariffs valid, ethical economic strategies? Why or why not?

  GDP is broken down into categories of Consumption

GDP is broken down into categories of Consumption, Investment, Governement Expenditures, and Net Exports. What role did each category play in the recent recession and subsequent recovery?

  Cause a decrease in the quantity supplied at each price

Assume the supply function for good X can be written as Qs = -100 + 27Px - 5Py - 1.8W, where px=the price of x, Py=the price of good y, and w = wage index for workers in industry x. According to this equation: 1. each one unit increase in price cause..

  Complete with respect to materials and 30% complete with

During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods.

  Arcade games on the horizontal axis

Draw a graph with arcade games on the horizontal axis also newspapers on the vertical axis. Joe has $10 every week to allocate between these commodities.

  What is the policys benefit per sugar producer per year

Suppose the nation of Sugarland consists of 50,000 households, 10 of whom are sugar producers. Arguing that the sugar industry is vital to the national economy, sugar producers propose an import tariff. The loss in consumer surplus due to the tariff ..

  Your son is graduating from high school and is about

Your son is graduating from high school and is about to enter the work force. He has developed a strong curiosity about our economic system and how it works

  Identify impact of event to equilibrium price and quantity

The following events occur in the market for good B, which is a normal good: Identify the impact of the event to the equilibrium price and quantity of each event.

  Opponents of the minimum wage point out that minimum wage

Opponents of the minimum wage point out that the minimum wage:

  Excise tax is tax on specific good-excise tax on gas-liquor

Do you agree/disagree with the following statement: If the government increases the excise tax on bikes, the prices of bikes will rise? However, this will then cause the demand to decrease and as a result prices will fall back to their original level..

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!

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