The world’s Largest Sharp Brain Virtual Experts Marketplace Just a click Away
Levels Tought:
Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | Apr 2017 |
| Last Sign in: | 327 Weeks Ago, 5 Days Ago |
| Questions Answered: | 12843 |
| Tutorials Posted: | 12834 |
MBA, Ph.D in Management
Harvard university
Feb-1997 - Aug-2003
Professor
Strayer University
Jan-2007 - Present
ECON330
Money and Banking
Homework 1
1. Answer the following questions:
a. If the interest rate is 5%, what is the present value of a security that pays you
$1,050 next year and $1,102.50 two years from now?
b. If this security sold for $2200, is the yield to maturity greater or less than 5%?
Why?
c. Write down the formula that calculates YTM for this security if it sold for $2200. 2. Use demand and supply analysis to show how the equilibrium price and interest rate in bonds
market change if the economy goes into recession. 3. Image that there is excess supply in the market for bonds. Draw supply and demand for bonds and
explain whether bond price is above or below the equilibrium. Also using supply and demand for
bonds and explain whether interest rate is above or below the equilibrium.
-----------