government price controls or union wage pressures. a) tax b) financial system c) regulatory d) triangular Ans: c Section: The value of the multinational financial system Level: Easy 20.4 Subsidiaries A and B buy from and sell to each other. Suppose that A has excess cash‚ whereas B is short of cash. How can A funnel money to B? a) A can lead payments owed to B b) B can lag payments owed to A c) A can raise transfer prices on goods sold to B d) a and b only Ans: d Section: Leading and
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An Economic Analysis of Financial Structure Why do Financial Institutions Exist? (Why is Indirect Finance so Important?) Chapter 8 Chapter Preview W e take a closer look at why financial institutions exist and how they promote economic efficiency. Topics include: • A Few Basic Facts About Financial Structure • Transaction Costs • Asymmetric Information: Adverse Selection and Moral Hazard Chapter Preview (cont.) • The Lemons Problem: How Adverse Selection Influences Financial
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Bond B .95 .91 .87 .80 .70 10 10 10 10 110 5 5 5 5 105 A. Calculate the price of each bond assuming there are no arbitrage opportunities in the market. (That is‚ calculate the present value of each of the bonds.) B. Now suppose that in fact bond A is traded at $111.97 while bond B is traded at $91.41. Are there arbitrage opportunities in the market? If yes‚ how would you take advantage of them? [Assume that zero coupon bonds are traded.] C. Calculate the yields to maturity
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another part is tested. List the possible outcomes of this experiment regarding two parts. tGE 3. A.r."y of 54 students at the Wall College of Business showed the following majors: 1. Accounting 10 Finance Economics Management Marketing 5 3 6 10 Suppose you select a student and observe his or her maior. a. What is the probability he or she is a management major? b. Which concept of probability did you use to make this estimate? 4. A large company that must hire a new president prepares a final list
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1 Gauss’ theorem Chapter 14 Gauss’ theorem We now present the third great theorem of integral vector calculus. It is interesting that Green’s theorem is again the basic starting point. In Chapter 13 we saw how Green’s theorem directly translates to the case of surfaces in R3 and produces Stokes’ theorem. Now we are going to see how a reinterpretation of Green’s theorem leads to Gauss’ theorem for R2 ‚ and then we shall learn from that how to use the proof of Green’s theorem to extend it
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(Caution: the terms here are imprecise‚ and we use terms such as ‘explanation’ or ‘reason’ in different ways than just outlined.) Example. Suppose I say: “I believe that there are no triangles.” You say “Why do you believe that?” You can be either asking for the cause of my belief or (more likely in this case) for my reasons for believing it. Suppose that you are interested in the explanation of why (as a matter of fact) I hold the belief. I may tell you (truthfully) that I hold this belief
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(Assignment 1) Consolidated Computers . James Pruitt was ushered into the president’s office. Three months ago he had been appointed manager of the first foreign plant of Consolidated Computers‚ Inc. He appeared to be the ideal person for this assignment‚ as a proven division manager of many talents. He was an innovator and very much interested in a foreign appointment. Now he was calling on his superior just before catching the plane for Riyadh. “I wanted to talk to you‚” the president
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NAME: MASSAWE BARAKA‚ REG. NO: 2010-04-03894. 12 FINANCE 202 INDIVIDUAL ASSIGNMENT UDBS Consider a 10 year bond that has a face value shs 1000‚ a coupon rate of 6% and pays interest once a year. (a)Suppose person A bought this bond at par when it was initially issued and sold it 1 year later to person B for shs 1024.What is B’s total return? Soln Total return =[ Interest paid +(selling price – buying price)]/buying price Given; Annual interest paid = coupon rate x par value‚ coupon
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Compute the growth in nominal GDP‚ real GDP‚ and the GDP deflator in 2008 and 2009. For each year‚ identify the variable that does no change. Explain your answers. [10 marks] Did economic well-being rise more in 2008 or 2009? Explain. [3 marks] Suppose you are given the following information: Qs = 100 + 3P Qd = 400 – 2P
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Please turn in a hard-copy of your homework to the class. Show all your work to receive full credit for each question. 1. Suppose a stock had an initial price of $91 per share‚ paid a dividend of $2.40 per share during the year‚ and had an ending share price of $102. Compute the percentage total return. What was the dividend yield? The capital gains yield? 2. Suppose you bought a 7 percent coupon bond one year ago for $1‚040. The bond sells for $1‚070 today. a. Assuming a $1‚000 face
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