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Scenario: You have been appointed the authority to mandate vaccinations for COVID variant Z anywhere in the world to any adult. The first dose reduces the chance of transmission by 40 percentage points, the second [together with the first] by 60, & the booster by 70 [together with the first and second]. The world's population has been split evenly between developed & developing countries, & the "developed" citizens have already had one dose. Subsequently, you receive enough vaccine for one dose for half of the world. If you are trying to minimize deaths worldwide, what do you do & what is the economic principle? What is the marginal product in terms of percentage point reduction in the likelihood of transmission of the next vaccine dose in the developed and undeveloped countries? Now suppose that a new third batch of the vaccine for half of the world is available, & simultaneously, a 100% cure is developed that must take place in a hospital. If the developed countries have all of the hospital bed capacity, what should be done & what is the economic principle? In terms of deaths avoided, what is the marginal product of the next vaccine dose in the developed word?

Suppose that there are three states of the world, a, b, and c. The probabilities of the three states are ?1 = 0.25, ?2 = 0.5, and ?3 = 0.25. Let A, B, and C denote the Arrow-Debreu securities that pay $1 in states a, b, and c, respectively. That is, A = (1,0,0), B = (0,1,0) and C = (0,0,1). Let pa = 0.4, pb = 0.5 and pc = 0.2 denote the prices of A, B, and C.

Consider a security X which is worth $2 in state a, $3 in state b, and $1 in state c. If there are liquid markets for A, B, C and X, what is the price of X?

\fUse the following uble's drin, everpied from The Wall Street Journal of Turaday, March 12, 1934, to answer questions i to 4. Call-Lay underlying Apr May Jun Apr May Jun 31:250 British Pounds cents perunit. H7 10 157 1 #3400 New Zealand Dollan anb Per Unit WTH 1.13 1.10 6.350030 Japanese Ten- louche of a cent perunit. 1.41 4412 1.12 F-not braded. s-no option offered. Last is premium(purchase pricek 1. What is the Last quote for an April call option on our with a strike price of 1557 A. 0.0 2. What is the last quote for a May put option on wen with a strike price of 587 3. What is the last quote for a June put option on pry with a strike price of 93 1/2? A. The option was not traded on Monday March 21. & For the options below, what is the intrinsic value? Is the intrinsic value greater than, less than, or equal to the option premium) (a) June call on car with a strike price of 150.1. The only difference between European-style and American-style options is that Eun pean-style options are traded only in Europe while American options are traded only in the us. 1. The buyer of an option has an obligation to purchase the underlying asset in the cine of a call, or sell in the case of a put, while the seller of an option has the right to deliver in the case of a call, or take delivery in the case of a put. 3. A put offers the holder of an asset protection from drops in the underlying as- at's value, while a call provides protection from an increase in the underlying ovel's price. 4. The intrinsic value of a call is its risk-adjusted expected value. 5. The immediate exercise value of an option is its value alive. 6. If a call's strike price exceeds the spot rate, the call is in the money. 7. If an in-the money put has positive value, It's value is based pandy on time 5. A European-style call will always be at least as valuable as a comparable American call. 9. An option is always at bast as valuable as the comparable forward contract