COURSE : ECONOMICS EXAMINATION : APRIL 2011 QUESTION 1 A) What is market equilibrium? With the aid of a diagram‚ explain how it is determined? (4marks) Answer: Market equilibrium is a situation in which the supply curve of an item is exactly equal to its demand curve. Since there is neither surplus nor shortage in the market‚ price tends to remain stable in this situation. Price D S E P S D 0 Q
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Grade Details 1. Question: The primary operating goal of a publicly-owned firm interested in serving its stockholders should be to _________. Your Answer: maximize its expected total corporate income maximize its expected EPS minimize the chances of losses maximize the stock price per share over the long run‚ which is the stock’s intrinsic value CORRECT maximize the stock price on a specific
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94 D. .92 E. .38 Answer: D 2. Suppose that for a certain football game the probability that the home team will be ahead at half-time is 0.60 and the probability that the home team will be ahead at half- time as well as at the final gun is 0.45. What is the probability that the home team will win this game given that it is ahead at the half? A. .45 B. .75 C. .15 D. .27 E. None of the above. Answer: B 3. A company markets two products
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will be held in class from 9:00 a.m. - 11:00 a.m. on Thursday October 27‚ 2011. There will also be a 3-hour final examination
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Chapter 6 Interest Rates Learning Objectives After reading this chapter‚ students should be able to: List the various factors that influence the cost of money. Discuss how market interest rates are affected by borrowers’ need for capital‚ expected inflation‚ different securities’ risks‚ and securities’ liquidity. Explain what the yield curve is‚ what determines its shape‚ and how you can use the yield curve to help forecast future interest rates. Chapter 6: Interest Rates
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TREASURY BILLS Treasury bills are instrument of short-term borrowing by the Government of India‚ issued as promissory notes under discount. The interest received on them is the discount which is the difference between the price at which they are issued and their redemption value. They have assured yield and negligible risk of default. Under one classification‚ treasury bills are categorised as ad hoc‚ tap and auction bills and under another classification it is classified on the maturity period
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It gives their private equity investors the opportunity to diversify. C) It gives access to much larger amounts of capital through the public markets in subsequent offerings. D) It reduces the complexity of requirements regulating the company’s management (6) How does the total cost of issuing shares for the first time compare to the issuance costs of other securities? A) substantially less than the costs for most other securities B) substantially less than the cost for a few other securities C)
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3530 F10 Final Exam and Solutions - Type A 1. Two years ago Zippy Inc. issued a zero-coupon bond with a $1‚000 face value and a ten year maturity. If the bond’s yield to maturity today is 3.50%‚ what is the current price of the bond? (assume annual compounding) A) $708.92 B) $759.42 C) $825.50 D) $933.51 E) $1000 Solution B PV of bond = 1000/(1.035)^8 = $759.41 2. Topaz Bank’s earnings and dividends are expected to grow at a rate of 10% during the next 2 years‚ at 8% in the third year‚ and at a constant
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Question # 1 (4 marks) Reardon Inc. publishes accounting textbooks and expects to sell 6‚000 during the coming year. The average selling price per textbook is $75. Projected costs for 6‚000 textbooks are as follows: Direct Materials $94‚500 Direct Labour $45‚000 Variable Manufacturing Overhead $48‚000 Fixed Manufacturing Overhead $96‚000 * Fixed Selling and Administrative $42‚500 Variable Selling and Administrative $25‚000 * Total Fixed Manufacturing Overhead increases
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For your final‚ I will chose questions from this list” 1) Can a country have a trade deficit forever? 2) Use national demand and supply curves to show (a) the incentives for trade to begin between nations. (b) the effect on the likely pattern of trade of a change in technology in A that causes A’s national supply curve to shift out. (c) the effect on the likely pattern of trade of a change in tastes in B in favor of good S. 3) Given the input-output relationships in the table below:
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