Answering economics questions may become a significant problem for many students at a certain point in their education process. You may have a short economics question that seems not so hard and time-consuming, but when you finally get to do it, you realize that it is more complicated than it looks, and Google search is not helping at all. There are a few websites that offer economics questions and answers for free, but they do not always provide solutions to the particular problems you have. If you need assistance with your economics homework problems or need answers to economics worksheet, test or quiz questions, be it multiple choice or free answer questions, Assignment Expert will be glad to provide it. We offer professional help with questions in a variety of economics topics you may find confusing or difficult to comprehend. Ask your economics question here, and our economics experts will answer it for free. If you need a solution to the entire set of questions or assistance with an economics project, order now, and our economics experts will help you for a reasonable price.
Answer 7.72 percent
2.Briefly explain the difference between savings and dissavings
where, TC is the firm’s monthly total cost in dollars and Q is the firm’s monthly output.
a) If the industry is in long-run equilibrium, what is the price of the Rosemont Company’s product?
b) What is the firm’s monthly output?
Currency 700 billion
money market mutual funds 2,000 billion
demand deposits 300 billion
other checkable deposits 300 billion
traveler's check 10 billion
Last Open High Open Low High Low Most Recent Change
Nov 2007 80.25 81.55 81.45 82.02 79.45 80.24s 0.01
Dec 2007 79.28 80.35 80.3 80.8 78.5 79.28s 0.00
Jan 2008 78.44 n/a 79.58 79.9 77.75 78.50s -0.06
Feb 2008 77.68 n/a 78.85 78.86 77.22 77.87s -0.19
Mar 2008 77.32 n/a 78.25 78.62 76.75 77.34s -0.02
April 2008 76.83 n/a 77.61 77.61 76.28 76.86s -0.03
(a) Here the futures price is lower the greater the time to expiration; what does this imply about the convenience yield of oil? Specifically, is it greater than the cost of carrying oil? (Hint: carry cost model).
Fixed rate Floating rate
Firm A 8% LIBOR + 1%
Firm B 9% LIBOR + 1.4%
Premium paid by B over A 1% 0.4%
Also assume that A ultimately wants a floating rate loan while B wants a fixed rate loan. Design an interest rate swap so that both can benefit, assuming that no swap bank is involved
Strike Price Open High Low Last sett
1540 -- -- -- -- 31.70
1600 1.70 3.60 1.70 3.00 3.35
(a) Which option is in the money?
(b) Decompose the value of 1540 call, $31.7, into intrinsic value and time value.
(c) Again using the call with exercise price of 1540, what would be your cash proceeds if you exercise the option on October 1 (index options are settled by cash)? Assume that both dividends and transaction costs are small enough to be ignored. Based on this answer and answer on (b), does it make sense to exercise an American call before expiration?
(d) Assume that put-call parity holds for these options. What should be the value of a PUT on S&P 500 with exercise price of 1600? Assume that the annual risk-free rate is 5%