Given that: Consumption Investment Money supply Transaction-precautionary demand for money Speculative demand for money C = 0.7Y + 100 I = -40r +1000 Ms = 4300 L1 = 0.2Y L2 = -40r + 230 %3D
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- Given that: C = 0.7Y + 100 Consumption Investment %3D I =-40r + 1000 Money supply Transaction-precautionary demand for money Speculative demand for money Ms = 4300 L1 = 0.2Y L2 = -40r + 230 %3D %3D ;Value of interest rate (r) is 10 O 12 O 60You have been promoted to head of Treasury and Investment Management at Ecobank andhave been handed information on a number of issues for which immediate answers arerequired. For each excerpt from the issues presented below answer the associatedquestion(s):(i) Ecobank holds ¢500 million T-Bill but is in short of cash. It needs cash to meetthe requirement of a customer who has come to withdraw ¢400million.Youhave been asked to approach Barclays Bank to sell the T-Bill for ¢495 millionwith agreement to repurchase within 4 working days.(a) How much in cedis does Ecobank lose in this transaction(b) What is the Repo Rate on this transaction (ii) You have just been offered a commercial paper with a face value of ¢45,000,000which bears a discount of 36% and has 182 days to mature.(a) How much will you be prepared to pay for this paper? (b) What is the cedi discount on the paper? (iii) Ecobank plans to issue a 2-year bond with a face value of ¢500,000,000 bearing20% coupon rate. The market…SET B l. It is the practice of almost all banks in the Philippines that when they grant a loan. The interest for one year is automatically deducted from the principal amount upon release of money to a borrower. Let us therefore assume that you applied for a loan with a bank and the Php 80, 000 was approved at an Interest rate of 14% of which Php 11.200 was deducted and gou were given a check of Php 68. 800. Since you have to pay the amount of Php 80. 000 one year after. what then will be the effective interest rate?
- A manufacturer is planning to sell a total of 500 machines to both foreign and domestic firms. The price the manufacturer can expect to receive for the machines will depend on the number of machines made available. It is estimated that if the manufacturer supplies x machines to the domestic market and y machines to the foreign market, the machines will 5y sell for 1200 - 3x + pesos per unit domestically, and 7 2x 2200 - 2y + pesos per unit abroad. 7 the rev (b) Evaluate Ry (100, 400) and interpret this value in the context of the problem.Racine Tire Co. manufactures tires for all-terrain bicycles, The tires sell for P60 and variable cost per tire is P45; monthly fixed cost is P450,000. Requirement: 1. Calculate the firm's break-even point in sales pesos 2. What will be the new net income? 3. If the company can increase sales volume by 15 percent above the current level, 8,400,000 tires monthly What will be the increase in net income?Mf1. 6) Lindsey Lohan is a foreign exchange trader for a bank in New York. She has $1 million (or its Swiss franc equivalent) for a short-term money market investment and she decides to seek the full 4.800% return available in US dollars by not covering her forward dollar receipts -- an uncovered interest arbitrage (UIA) transaction. Assess this decision. She faces the following quotes: Assumptions Value Arbitrage funds available $1,000,000 Spot exchange rate (SFr./$) 1.2810 3-month forward rate (SFr./$) 1.2740 Expected spot rate in 90 days (SFr./$) 1.2700 U.S. dollar 3-month interest rate 4.800% Swiss franc3-month interest rate 3.200%
- The demand D (in billions of £) for a bond with coupon rate 5% and face value FV = 1000, andtwo years to maturity as a function of its price P is D = 4000 − 2P. The supply in (billions of£) as a function of the price of the bond is S = 2P + 400. b) Suppose that the yield to maturity of the bond is i = 0.05. What is the quantitydemanded/supplied at this interest rate? What happens to the demand/supply of the bond asthe interest rate increases? Explain why. c) What is the equilibrium interest rate? d) Suppose that the bond trades at premium. Is there excess demand or supply? Explain.e) There is a business cycle expansion, so both supply and demand shifts. After the shift, thenew demand curve is given by: D = 4000 + X − 2P, whereas the new supply curve is S =2P + 200. For which values of X will the interest increase/decrease? Which values of X arein line with empirical data?The demand D (in billions of £) for a bond with coupon rate 5% and face value FV = 1000, andtwo years to maturity as a function of its price P is D = 4000 − 2P. The supply in (billions of£) as a function of the price of the bond is S = 2P + 400. b) Suppose that the yield to maturity of the bond is i = 0.05. What is the quantitydemanded/supplied at this interest rate? What happens to the demand/supply of the bond asthe interest rate increases? Explain why. c) What is the equilibrium interest rate?2. An automobile company sells certain automotive parts. Present sales volume is 450,000 units a year at selling price of P0.55 per unit. Fixed expenses is P85,000 per year. What is the break-even point in pesos?
- TUNIS geoiduzil.AT/-3.02 Note: Please make sure to properly format your answers. All dollar figures in the answers need to include the dollar sign and any amount over 1,000 should include the comma ($2,354.67). All percentage values in the answers need to include a percentage sign (%). For all items without specific rounding instructions, round your answers to two decimal places, show both decimal places (5.06). If you borrow $220,000 at an APR of 3.5% for 25 years, you will pay $1,101.37 per month. If you borrow the same amount at the same APR for 30 years, you will pay $987.90 per month. a. What is the total interest paid on the 25-year mortgage? $110,411.00 b. What is the total interest paid on the 30-year mortgage? $135,644.00 X c. How much more interest is paid on the 30-year mortgage? Round to the nearest dollar. d. If you can afford the difference in monthly payments, you can take out the 25-year mortgage and save all the interest from part c. What is the difference between the…Complete the table for the time t (in years) necessary for P dollars to triple when interest is compounded annually at rate r. (Round your answers to two decimal places.) 2% 3% 5% 6% 7% t Create a scatter plot of the data. r O 60 40 50 O 30 20 10 60 50 40 30 20 10 2 2 3 3 4 4 5 5 4% 6 6 7 8 t ......r 8 7 r 60 50 40 O 30 20 10 60 50 40 30 20 10 2 2 3 3 4 4 5 6 5 6 7 7 8 8 t rAssume the following: Spot USDBRL = 5.0500 1YR USD Money Market Rates = 1.50% 1YR BRL Money Market Rates = 9.00% What is the 6MO USDBRL forward rate? (Recall that Money Market Rates are quoted as annualized rates)