Question:

Investor A has a square root utility function (i.e., U(W) =

logarithmic utility function (i.e., U (W ) = ln W ). Both investors have initial wealth W0 = $1, 000 and must decide how much how much to invest in a bond and how much to invest in a stock. The current (t = 0) prices of the bond and stock are B0 and S0 respectively.

Both investors expect to receive income from selling these securities at their t = 1 prices, which are B1 for the bond and S1 for the stock. Since the bond is riskless, its t = 1 price is known with certainty to be B1 = B0(1+r), where r is the riskless rate of interest. The price of the stock at t = 1 can be high or low; i.e., it will be S0(1+s) with probability .6 and it will be S0(1-s) with probability .4. Furthermore, assume that r = .02 and s = .12.

A. How much (in dollars and percentages) of Investor A's initial wealth should be invested in the stock and in the bond?

B. How much (in dollars and percentages) of Investor B's initial wealth should be invested in the stock and in the bond?

QUESTION 4 donates 2-carbon units during fatty acid synthesis. O acetoacetate O malonyl-CoA O oxaloacetate biotin QUESTION 5 A cell's [NADPH/NADP * ] ratio is very low: what would you expect to happen? O B-oxidation is inhibited ketone body synthesis is inhibited O triglyceride synthesis is inhibited Fatty acid synthesis is inhibitedParagraph Question 5c (ib) Styles Use the market for foreign exchange to determine the impact on exports, Imports and the Balance of trade due to the following: (ib) Increased remittance flows to your country during the Christmas Season Exports Answer 1 Choose.. Choose. Balance of Trade Answer 2 balance of trade remain unchanged cheaper Imports Answer 3 balance of trade decrease balance of trade increase more expensive remain unchanged PhotoGrid Question 5c (jib) Use the market for foreign exchange to determine the impact on exports, Imports and the Balance of trade due to the following (ii) The local interest rates increase relative to the rest of the world Exports Choose. Answer 1 Choose. Balance of Trade Answer 2 more expensive remain unchanged Imports balance of trade decrease Answer 3 balance of trade increase cheaper balance of trade remain unchanged PhotoGridThe component of the capital and financial account include: (select the best choice) universal transfers. balance of trade. universal transfers and direct foreign investment. e balance of trade and direct foreign investment. direct foreign investment. balance of trade and universal transfers.E. One month Question 5: An increase in real wealth in India will . Select all that apply. Choose one or more: A. increase Indian aggregate demand B. decrease Indian aggregate demand C. increase U.S. aggregate demand D. decrease U.S. aggregate demand Question 6: Choose the right answer: Net exports will increase/decrease/stay the same when the value of the dollar result, the aggregate demand curve will shift left/increase. ECON 1204-001 Principles of Macro Spring 2019 Question 7