posted 10 months ago

posted 10 months ago

posted 10 months ago

Alternative 1: Receive $100 today:

Alternative 2: Receive $120 two years from now.

posted 10 months ago

a) CCA for the first 5 years

b) DOB for 5 years with no salvage value

ci SL for 5 years with no salvage value

posted 10 months ago

posted 10 months ago

(a) Find the monthly payment for this loan.

posted 10 months ago

What is the nominal annual interest rate?

b. What is the effective annual interest rate?

c. Compare rates of part b) and part a), which one is higher? Why?

If the problem changes, this student bought a $75 used guitar and agreed to pay for it with a single $85 payment at the end of 6 months. Assuming quarterly (3-months) compounding.

d. What is the nominal semi-annual interest rate?

e. What is the effective semi-annual interest rate?

posted 10 months ago

\text { The following is her utility function for wealth }(\omega) \text { and risk }(\Delta) u^{H}(\Delta, \omega)=\omega-\frac{\Delta^{2}}{2}

\text { feasible frontier (also called a risk-return schedule): } \omega(\Delta)=-2+6 \Delta-(\Delta)^{2}

She believes she the relationship between wealth and risk can be explained by the following

Choose the statements that are true among the following.

\text { a. Huong's marginal rate of substitution is } \operatorname{mrs}(\Delta, 0)=-2 \Delta \text {. }

\text { b. Huong's marginal rate of substitution is } \operatorname{mr} s(\Delta,(\omega)=2 \Delta \text {. }

\text { c. Huong's constrained utility maximizing bundle of risk and weatth is }(\Delta=2, \omega=6) \text {. }

\text { d. For Huong, risk is a good and wealth is a bad. }

\text { e. Huong's constrained utility maximizing bundle of risk and wealth is }\left(\Delta=\frac{3}{2}, \omega=\frac{21}{4}\right) \text {. }

\text { g. Huong's marginal rate of substitution is } \operatorname{mrs}(\Delta, 0)=-\Delta \text {. }

\text { h. Huong's marginal rate of substitution is } \operatorname{mrs}(\Lambda, a)=\Delta \text {. }

posted 10 months ago

a. Every indifference curve corresponds to one combination of good x and y.

b. An individual is indifferent between any two points on a given indifference curve.

C.Utility remains constant along any given indifference curve.

d. Indifference curves between a good and bad are upward-sloping.

e. Indifference curves cannot cross as long as the individual has consistent preferences.

f. Indifference curves for Perfect Substitutes are L-shaped.

posted 10 months ago

a. This individual is willing to give up three y to get two x when they hold the same amount of xand y.

\text { d. Marginal rate of substitution } m r s(x, y)=(2 y) /(3 x) \text {. }

\text { c. Marginal utility of y equals } 4 x^{-0.4} y^{0.4}

u(x, y)=10 x^{04} y^{0.6} ?

\text { b. Marginal utility of x equals } 6 x^{-0.6} y^{0.6}