Consider a representative university student who decides how much time to spend on study. Let us call this student Bruno, who has been using academic cheating websites for a year in order to 'boost' his performance. Somehow, he has not been caught once. Now consider Angela, another representative university student who also decides how much time to spend on study. She has been a study group which helps her to keep up with the study material as well as to improve her time management and note-taking skills. A year ago, both students studied 35 hours per week and achieved 65%. Currently, they study 32 hours per week and achieve 75%.

Assume i) the two students faced the same feasible frontier a year ago, and

ii) they have the same preference.

Do the following:

Illustrate the effect of cheating on Bruno's feasible frontier and his optimal decision using a fully labelled diagram where

i) the horizontal axis represents the hours of free time per week, and

ii) the vertical axis represents academic performance (measured out of 100).

Illustrate the effect of using a study group on Angela's feasible frontier and her optimal decision using another fully labelled diagram with the same axes as the previous diagram.

. An insurance company sells single premium deferred annuity contracts with return linked to a stock index, the time-t value of one unit of which is denoted by S(t). The contracts offer a minimum guarantee return rate of g%. At time 0, a single premium of amount is paid by the policyholder, and y% is deducted by the insurance company. Thus, at the contract maturity date, T, the insurance company will pay the policyholder (1 y%) Max[S(T)/S(0), (1 + g%)T ]. You are given the following information: (i) The contract will mature in one year. (ii) The minimum guarantee rate of return, g%, is 3%. (iii) Dividends are incorporated in the stock index. That is, the stock index is constructed with all stock dividends reinvested. (iv) S(0) = 100. (v) The price of a one-year European put option, with strike price of $103, on the stock index is $15.21. Determine y%, so that the insurance company does not make or lose money on this contract.

4. For a two-period binomial model, you are given: (i) Each period is one year. (ii) The current price for a nondividend-paying stock is 20. (iii) u = 1.2840, where u is one plus the rate of capital gain on the stock per period if the stock price goes up. (iv) d = 0.8607, where d is one plus the rate of capital loss on the stock per period if the stock price goes down. (v) The continuously compounded risk-free interest rate is 5%. Calculate the price of an American call option on the stock with a strike price of 22. (A) 0 (B) 1 (C) 2 (D) 3 (E) 4 5. Consider a 9-month dollar-denominated American put option on British pounds. You are given that: (i) The current exchange rate is 1.43 US dollars per pound. (ii) The strike price of the put is 1.56 US dollars per pound. (iii) The volatility of the exchange rate is = 0.3. (iv) The US dollar continuously compounded risk-free interest rate is 8%. (v) The British pound continuously compounded risk-free interest rate is 9%. Using a three-period binomial model, calculate the price of the put.

6. You are considering the purchase of 100 units of a 3-month 25-strike European call option on a stock. You are given: (i) The Black-Scholes framework holds. (ii) The stock is currently selling for 20. (iii) The stock's volatility is 24%. (iv) The stock pays dividends continuously at a rate proportional to its price. The dividend yield is 3%. (v) The continuously compounded risk-free interest rate is 5%. Calculate the price of the block of 100 options. (A) 0.04 (B) 1.93 (C) 3.63 (D) 4.22 (E) 5.09 7. Company A is a U.S. international company, and Company B is a Japanese local company. Company A is negotiating with Company B to sell its operation in Tokyo to Company B. The deal will be settled in Japanese yen. To avoid a loss at the time when the deal is closed due to a sudden devaluation of yen relative to dollar, Company A has decided to buy at-the-money dollar-denominated yen put of the European type to hedge this risk. You are given the following information: (i) The deal will be closed 3 months from now. (ii) The sale price of the Tokyo operation has been settled at 120 billion Japanese yen. (iii) The continuously compounded risk-free interest rate in the U.S. is 3.5%. (iv) The continuously compounded risk-free interest rate in Japan is 1.5%. (v) The current exchange rate is 1 U.S. dollar = 120 Japanese yen. (vi) The daily volatility of the yen per dollar exchange rate is 0.261712%. (vii) 1 year = 365 days; 3 months = year. Calculate Company A's option cost.

9. Consider the Black-Scholes framework. A market-maker, who delta-hedges, sells a three-month at-the-money European call option on a nondividend-paying stock. You are given: (i) The continuously compounded risk-free interest rate is 10%. (ii) The current stock price is 50. (iii) The current call option delta is 0.61791. (iv) There are 365 days in the year. If, after one day, the market-maker has zero profit or loss, determine the stock price move over the day. (A) 0.41 (B) 0.52 (C) 0.63 (D) 0.75 (E) 1.11 10-17. DELETED 18. A market-maker sells 1,000 1-year European gap call options, and delta-hedges the position with shares. You are given: (i) Each gap call option is written on 1 share of a nondividend-paying stock. (ii) The current price of the stock is 100. (iii) The stock's volatility is 100%. (iv) Each gap call option has a strike price of 130. (v) Each gap call option has a payment trigger of 100. (vi) The risk-free interest rate is 0%. Under the Black-Scholes framework, determine the initial number of shares in the delta-hedge.

Hassan and Dana had bought a property valued at $1,225,000 for 20% down and a mortgage amortized over 25 years on March 1, 2018. They made equal end-of-month payments towards their mortgage. Interest on the mortgage was 3.29% compounded semi-annually and the mortgage was renewable after five years.

What is the size of each monthly payment?

What is the cost of the mortgageforthe first 5years?

In November2020,theydecidedtorefinancetheirmortgagefortworeasons:rateswere down by quite a lot, and they also wanted to pay off some Line of Credit debt they had accumulated. Suppose the new rate they qualified for was 1.74% compounded semi-annually and they could borrow $1,060,000 from the bank to cover their remaining mortgage balance and LOC debt. The new mortgage is amortized over 25 years, but they also need to pay a penalty for breaking the old mortgage early.

If the penalty is the interest differential over the remaining term of the old mortgage (under the old and the new rates), and if the penalty is also added to the new mortgage, what is the size of their new monthly payment?

We consider an economy in which there are a representative consumer and two firms j = 1,2 producing two goods = 1,2. The consumer supplies an exogenous quantity of labour L. Firm 1 produces good I by using a production function F. (Z, L) where Z, L1 are respectively the quantity of good 2 and labour. Similarly, firm 2 produces good 2 with a production function F(Z, L) where Zi, L2 are respectively the quantity of good 1 and labour. Let denote by w, P1, P2 >>0 wages and prices of good 1 and good 2. The consumer is also the firms owner.

1. Let denote R, the consumer's total revenue. Her/his utility function is given by u(11, 1) =

(i) Derive the consumer's Walrasian/Marshallian demand functions. Compute her/his indi rect utility function.

(ii) Derive the consumer's Hicksian demand functions. Compute her/his expenditure function.

2. Assume that F(-) = 32/L and F(-) = 32/L. Derive the factor demand functions 1/3, and supply functions of good 1 by firm 1 and firm 2. Compute their profit.

3. Define and then compute the general equilibrium for this economy.

(Hint):Do we have a GE for this economy?

Watch the movie "Up in the Air" starring George Clooney. Pay close attention to the role of Natalie as a Business Analyst. As you are watching the movie, jot down your answers to the following questions: In your opinion, is she a good or bad Business Analyst? What types of business analysis tasks does she do to warrant us looking at her as a Business Analyst? What requirements is she gathering? How does she verify and validate these requirements? What are her recommended solutions? Do you agree with her solutions? If not, what would you have done differently?

For your task, submit the deliverable for your personal project. Include the following:

Analyze the current state in regards to the requirements you analyzed for the change request to your project as of today. Define what the future state will be based on the business needs, goals, and objectives of the project. Assess any risks and recommend any actions to alleviate those risks if needed. Describe the current gap between the current and future state and how the project will achieve the future state.

AA business whose only inputs are labour and capital expands its employment level in the long run from 12 to 18 workers and its capital from 4 to 6 machines. Write out dollars and cents, e.g. $1.00 or $0.10 for any monetary amounts entered as a solution below.

Assuming that the daily wage of $100 and the daily upkeep (including wear and tear) per machine of $20 remain constant in the long run, identify the relevant returns to scale and the change in long-run average cost if daily output were to expand in each of the following possible ways.

a. If daily output expands from 130 to 260 units then in this output range the business is experiencing (Click to select) constant decreasing increasing returns to scale while long-run average cost is (Click to select) falling rising staying the same . At 130 units long-run average cost is $ and at 260 units it is $ .

b. If daily output expands from 130 to 195 units then in this output range the business is experiencing (Click to select) constant decreasing increasing returns to scale while long-run average cost is (Click to select) falling rising staying the same . At 130 units long-run average cost is $ and at 195 units it is $ .

c. If daily output expands from 130 to 173 units then in this output range the business is experiencing (Click to select) constant decreasing increasing returns to scale while long-run average cost is (Click to select) falling rising staying the same . At 130 units long-run average cost is $ and at 173 units it is $

Suppose we want to evaluate a public program intervention designed to reduce carbon dioxide emissions. To evaluate the efficiency impact, we need to estimate the benefits to consumers of the reduction in air particulate emissions (and then compare to the costs of the intervention).

a. We can use indifference curve analysis to approach this valuation problem. In particular, draw an indifference curve diagram to represent the preferences between All Other Goods Consumption and CO2 Emissions for a representative consumer in the economy. Do your indifference curves look like those from the All Other Goods Explain.

b. Suppose the consumer in part a. is currently consuming $30,000 of All of Goods and is exposed to 10 units of CO2 Emissions. The program is predicted to reduce CO2 Emissions to 5 units. How would you measure the benefits to the consumer of the 5 unit reduction of CO2 Emissions on your indifference curve diagram? Hint: What is the most the consumer would be willing to pay for the Emissions reduction?

20. Assume the Black-Scholes framework. Consider a stock, and a European call option and a European put option on the stock. The current stock price, call price, and put price are 45.00, 4.45, and 1.90, respectively. Investor A purchases two calls and one put. Investor B purchases two calls and writes three puts. The current elasticity of Investor A's portfolio is 5.0. The current delta of Investor B's portfolio is 3.4. Calculate the current put-option elasticity. (A) -0.55 (B) -1.15 (C) -8.64 (D) -13.03 (E) -27.24 21-24. DELETED 25. Consider a chooser option (also known as an as-you-like-it option) on a nondividend-paying stock. At time 1, its holder will choose whether it becomes a European call option or a European put option, each of which will expire at time 3 with a strike price of $100. The chooser option price is $20 at time t = 0. The stock price is $95 at time t = 0. Let C(T) denote the price of a European call option at time t = 0 on the stock expiring at time T, T > 0, with a strike price of $100. You are given: (i) The risk-free interest rate is 0. (ii) C(1) = $4. Determine C(3)

ensure to answer all