ECON-2819 Final: Final Exam Practice #2

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burgundywhale514

6 Oct 2011

School

University of Winnipeg

Department

ECONOMICS

Course

ECON-2819

Professor

Hai Ta

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Document Summary

______--. --. ---__ : bhattacharyya/ l. elkow/ g. jacoby/ l. longobartli. Note: it is your responsibility to verify that this examination has 15 pages: multiple c. hoice section. 1s;lch nf the following questions or statements is followed by several suggested answers or completions. Select the best alternative and place the corresponding letter on the. ;icconlp:lnying computerized answer sheet. (value: 12 x 2. 5 = 30 marks) ; the l ollowing information applies to questions i and 2. Spot rates of interest for zero-coupon government of canada bonds are observed for different terms to maturity as follows: a ~~ iwji~i~i~ii bond has a face value of ,000 and matures 4 years from today. If" you believe in the pure expectations theory of the term structure, what do you expect the price of. Your broker has recommended that you buy the stock of a new company.

Related Questions

Please answer the following questions:

Your firm manages money for a professional tennis player Maria Juarez. She has asked you to give her information about what determines the level of various interest rate. Your boss has prepared some questions for you to consider. Please answer the following questions:

5. What is the pure expectations theory? What does the pure expectation theory imply about the term structure of interest rate?

6. Suppose you observe the following term structure for treasury securities (see grid) below, now assume that the pure expectations theory of the term structure is correct. (This implies that you can use the yield curve provided to âback outâ the marketâs expectations about future interest rates.) What does the market expect will be the interest rate on 1-year securities 1 year from now? What does the market expect will be the interest rate on 3-year securities 2 years from now? Calculate these yields using geometric averages. Maturity Yield 1 year 6.0% 2 years 6.2% 3 years 6.4% 4 years 6.5% 5 years 6.5%

7. Describe how macroeconomic factors affect the level of interest rates. How do these factors explain why interest rates have been lower in recent years?

sangriacicada217

Give an orginal concise but thorough answer to the following questions.

Chapter 1:

a. Define social responsibility. How does this view of the role of business differ from your previous perceptions? How is it consistent with your attitudes and beliefs about business?

b. If a company is named to one of the âbest in social responsibilityâ lists, what positive effects can it potentially reap? What are the possible costs or negative outcomes that may be associated with being named to one of these lists?

c. What historical trends have affected the social responsibilities of business? In light of current trends and issues, what changes in these responsibilities and expectations do you predict over the next five years?

Questions:

1, Now assume the following specific demand equation: p = 9 â 0.3q; r = 0.1; R= 80; mc = 2. Suppose the resource price is currently $3 per unit. What is the depletion year for this resource under perfection completion? (Note: you may need to carry out some calculations in a spreadsheet).

2, Given the information provided in question 1,

a) What is the equation of MR?

b) What is the specific MR corresponding to the initial point characterized by p = 3?

c) Compute the optimal depletion year.

PLEASE ANWSER ALL THE QUESTIONS AND LABEL WHICH ONE YOU ARE ANWSERING

ECON-2819 Final: Final Exam Practice #2

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