Hi, answer them correctly.

at Year 3 using the returns for the first three years. The next rolling average would be calculated using the returns from Years 2, 3, and 4, and so on. a. Using the annual returns for large company stocks and Treasury bills, calculate both the 5- and 10-year rolling average return and standard deviation. h, Over how many 5-year periods did Treasury bills outperform large company stocks? How many 10-year periods? c. Over how many 5-year periods did Treasury bills have a larger standard deviation than large company stocks? Over how many 10-year periods? bills. d. Graph the rolling 5-year and 10-year average returns for large company stocks and Treasury e. What conclusions do you draw from the above results? Mini Case A JOB AT EAST COAST YACHTS You recently graduated from college, and your job search led you to East Coast Yachts, Because you felt the company's business was seaworthy, you accepted a job offer. The first day on the job, while you are finishing your employment paperwork, Dan Ervin, who works in Finance. stops by to inform you about the company's 401(k) plan. A 401(k) plan is a retirement plan offered by many companies. Such plans are tax- deferred savings vehicles, meaning that any deposits you make into the plan are deducted from your current pretax income, so no current taxes are paid on the money. For example. assume your salary will be $50,000 per year. If you contribute $3.000 to the 401(k) plan, you will pay taxes on only $47.000 in income. There are also no taxes paid on any capital gains or income while you are invested in the plan, but you do pay taxes when you withdraw money at retirement. As is fairly common, the company also has a 5 percent match. This means that the company will match your contribution up to 5 percent of your salary, but you must contribute to get the match. The 401(k) plan has several options for investments, most of which are mutual funds. A mutual fund is a portfolio of assets. When you purchase shares in a mutual fund, you are actu- ally purchasing partial ownership of the fund's assets. The return of the fund is the weighted average of the return of the assets owned by the fund, minus any expenses. The largest expense is typically the management fee, paid to the fund manager. The management fee is compensa- tion for the manager, who makes all of the investment decisions for the fund. East Coast Yachts uses Bledsoe Financial Services as its 401(k) plan administrator, Here are the investment options offered for employees: Company Stock One option in the 401(kj plan is stock in East Coast Yachts. The company is currently privately held. However, when you interviewed with the owner, Larissa Warren, she informed you the company was expected to go public in the next three to four years. Until then, a company stock price is simply set each year by the board of directors. Bledsoe S&P 500 Index Fund This mutual fund tracks the S&P 500, Stocks in the fund are weighted exactly the same as the S&P 300. This means the fund return is approximately the return on the S&P 500, minus expenses. Because an index fund purchases assets based on the composition of the index it is following. the fund manager is not required to research stocks and make investment decisions. The result is that the fund expenses are usually low. The Bledsoe S&P 500 Index Fund charges expenses of 15 percent of assets per year. Bledsoe Small-Cap Fund This fund primarily invests in small-capitalization stocks. As such, the returns of the fund are more volatile. The fund can also invest 10 percent of Its assets in companies based outside the United States. This fund charges 1.70 percent in expenses.Consider two bonds, one issued in euros (!) in Germany, and one issued in dollars ($) in the United States. Assume that both government securities are one-your bonds-paying the food value of the band one your from now. The face valves and prices on the two bonds are given by Face Value Price United States $10,000 59,615.38 Germany (10,000 19,433.95 Compute the nominal interest rate on each of the bonds. Nominal interest rate on the U.S. bond = |%. (Enter your response as a whole number.] Nominal interest rate on the German bond = %. (Enter your response as a whole number.) The exchange rate, E. stands at $1 = (1.24, Compute the expected exchange rate next year consistent with uncovered interest party. The expected exchange rate next year with uncovered interest parity is | ES. (Round your response to two decimal places.) If you expect the dollar to depreciate relative to the euro, which bond should you buy? You should buy the bondQUESTION 4: a) During the early 1990's, Japan experienced an asset price bubble collapse followed by a massive decrease in economic activity. At that time, Japanese inflation was running at 1.76% (i) Assuming that inflation expectations in Japan were equal to the previous period's inflation rate, show (and explain), using the multiplier model, the labour market model, and the Phillips Curve, how the abovementioned asset price bubble collapse led to drop in economic activity in the short-run and deflationary pressure into the medium run (MR), ceteris paribus. [8]Question 1 (60 pts) True, False or Uncertain. You must answer any ten (10). There is a total of 18. Explain whether each of the following statements is true, false, or could go either way, depending on the circumstances. If a question has more than one part, please briefly explain why each part is true, false, or uncertain. Use the analytical tools learned in this course (use diagrams if these are relevant and helpful) to back up your answers. YOUR EXPLANATION IS BY FAR THE MOST IMPORTANT PART OF YOUR GRADE. YOU WILL RECEIVE REDUCED CREDIT IF YOU DO NOT PROVIDE AN EXPLANATION. a) (6 pts) According to the Japanese government, nominal GDP in Japan in 2008 was lower than in 1993. This information implies that Japan experienced a contraction in real economic output between 1993 and 2008. Circle one: TRUE FALSE UNCERTAIN b) (6 pts) Between 1975 and 1990, total factor productivity (TFP) in Argentina declined at an annual rate of 2.8% while real GDP per capita declined less rapidly at an annual rate of 1%. Based on this information, it must be the case that either the capital-labor ratio also declined or the employment to population ratio also declined in Argentina between 1975 and 1990. Circle one: TRUE FALSE UNCERTAIN c) (6 pts) According to the Bureau of Labor Statistics, the unemployment rate in the United States increased from 6.3% in January 1980 to 10.4% in January 1983. This fact implies that the labor force participation rate must have necessarily decreased during the same time period. Circle one: TRUE FALSE UNCERTAIN ActiRead the Economist article below "Put out" (Economist, 7/4/2009, Vol. 392, issue 8638, p 74). Summarize the article. In your summary make sure to answer the following questions, and refer to the AD/AS model presented in class: a. What is meant by an 'output gap'? b. According to the article, why is it difficult to estimate and measure the output gap and how much deflationary threat it causes? How is this related to the fact that during recessionary times, potential output also changes? c. Relating to your answer in part (b). how and why do you think NAIRU ("non- accelerating inflation rate of unemployment", or the natural rate of unemployment), thus potential output changes during recessionary times? d. How is the change in NAIRU related to the flexibility of the labor market