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2411 Economics Quiz 2 Name: __________________________ _____________ Instructions: Circle the letter that corresponds to the best Answer. 1. A discount bond is a debt security A) with just one payment. B) that pays interest forever and never repays the principal. C) that makes a regular interest payment until maturity, at which time the face value is repaid (so there is no amortization). D) that makes the same dollar payment every year, amortizing the principal. 2. If your after-tax realized real interest rate was 2 percent over the past year and you owned a one-year bond that paid 8 percent interest, what was the inflation rate if your tax rate was 15 percent? A) 4.8 percent B) 5.1 percent C) 5.4 percent D) 6.0 percent 3. A perpetuity is a debt security A) with just one payment. B) that pays interest forever and never repays the principal. C) that makes a regular interest payment until maturity, at which time the face value is repaid (so there is no amortization). D) that makes the same dollar payment every year, amortizing the principal. 4. According to _____, the long-term interest rate is equal to the average of current and expected future short-term interest rates. A) the expectations theory of the term structure of interest rates B) the rational-expectations hypothesis C) the segmented-markets hypothesis D) the yield curve theory Date:
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5. The ex-post real interest rate is also known as the A) realized real interest rate. B) expected real interest rate. C) after-tax real interest rate. D) ex-ante real interest rate. 6. When the yield curve is flat, then according to the complete theory of the term structure of interest rates (the theory that incorporates a term premium), investors expect shortterm interest rates in the future to A) rise. B) not change. C) fall. D) rise for a short time, then fall later. 7. The process of turning assets such as mortgages into securities sold to investors is A) default. B) standard deviation. C) standardization. D) securitization. 8. One way that homeowners and banks can share the risk of inflation is through A) fixed-rate mortgages. B) refinancing. C) default. D) adjustable-rate mortgages. 9. When a recession is about to begin, you are likely to observe that A) the yield curve is sharply upward sloping. B) the yield curve is somewhat upward sloping. C) the yield curve is flat or inverted. D) the yield curve is upward sloping for short times to maturity, then downward sloping for longer times to maturity. 10. According to the Fisher hypothesis, if the real interest rate is 5 percent and the inflation rate rises from 2 percent to 4 percent, then the nominal interest rate will rise by _____ percentage points and the real interest rate will change by _____ percentage points. A) 0; 2 B) 2; 2 C) 2; 0 D) 1; 1
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11. According to the Truth-in-Savings Act, the interest rate that banks are required to report when you deposit money in an account, which allows you to compare the returns on different accounts compound that interest with different frequencies, is known as A) capital-gains yield. B) annual percentage yield. C) current yield. D) total return. 12. Put the following securities in order according to their after-tax interest rates, from lowest to highest. The federal tax rate on interest income is 20 percent. A: A corporate bond pays an interest rate of 8 percent. B: A corporate bond identical in every way to bond A, but with an interest rate of 8.5 percent. C: A local government bond identical in every way to bond A, but with an interest rate of 7 percent. A) A, B, C B) B, A, C C) C, B, A D) C, A, B 13. The equation that allows us to compare dollar amounts to be received or paid at different dates is the A) present-value formula. B) Taylor rule. C) interest-rate parity equation. D) yield curve. 14. If the expected inflation rate was 7 percent and the actual inflation rate was 3 percent, then A) borrowers gained in real terms at the expense of lenders. B) lenders gained in real terms at the expense of borrowers. C) borrowers and lenders were not affected. D) the government gained because it collected more in taxes. 15. Which of the following would you rather have if your rate of discount is 20 percent? A) $300 in one year B) $350 in two years C) $420 in three years D) $1500 in ten years
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Essay Question (10 Points) 16. a. Suppose the Fisher hypothesis holds for an economy that has an expected real interest rate of 3 percent. For each of the expected inflation rates of 0, 3, 6, 9, and 12 percent, calculate the after-tax expected real interest rate (expressed in percentage points with two decimals), if the tax rate is 15 percent. Suppose the Fisher hypothesis does not hold, but instead that the after-tax expected real interest rate will be unchanged at 2.5 per...

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UConn - EC - 230

Name: _ Date: _ Instructions: Circle the letter that corresponds to the best answer. 1. In the aggregate-demand/aggregate-supply model, an increase in taxes causes _ to _ in the long run. A) output; increase B) output; decline C) output; be unchanged

UConn - EC - 214

Page 1 of 4Economics 214 Name_ Quiz 7 Fall 2006Definitions or Equations ( 10 pts )First Order Condition for a stationary point for a multivariate functionIf the functionis differentiable with respect to each of its argument on a domain and

UConn - EC - 214

Economics 2301 Quiz 3 Definitions or Equations ( 10 pts)Name_ Fall, 2008Transpose of the product of two conformable matrices AB'=B ' A'The inverse of the product of two nonsingular matrices A and B. AB-1=B-1 A-1 The inner product of the two n

UConn - EC - 230

Name: _ Date: _ Instructions: Circle the letter that corresponds to the best answer. 1. Asymmetric information exists when A) one party to a transaction knows more than another. B) the government has imperfect credibility. C) opportunity costs are la

UConn - EC - 310

Chapter 17 Problem Solutions Problem 17.1 a)E e =Ee e' e 1 e '2 e e 2IT 1 E ee' =E 1 1 =E 1 1 = ' ' e2 e2 0 e2 e e 2 e1 2 e1 E e1 = =0 0 e2 E e2 '-102 I T 2=W-1X = X ' W-1 X -1 X 'W -1 y = 0 ' 10X' 2

UConn - EC - 230

Name: _ Date: _ 1. The policymaking institution that determines the money supply, sets the rules for how checks are cleared and how banks obtain new currency, and determines what activities banks may or may not engage in and whether banks are operati

UConn - EC - 310

Economics 310Lecture 27 Distributed Lag Models Type of ModelsIf the regression model includes not only the current but also the the lagged (past) values of the explanatory variables (the X's) it is called a distributedlag model. If t

UConn - EC - 214

Economics 214Lecture 32 Univariate OptimizationSecond-Order ConditionsThe second-order condition provides a sufficient condition but, as we will see, not a necessary condition, for characterizing a stationary point as a local maximum or a local

UConn - EC - 310

Economics 310Lecture 18 Simultaneous Equations Simultaneous EquationsThere is a twoway, or simultaneous, relationship between Y and (some of) the X's, which makes the distinction between dependent and explanatory variables of dubious

UConn - EC - 310

Economics 310Lecture 12 Heteroscedasticity Heteroscedasticity Violation of classic assumption of constant variance of disturbance. The variance of the disturbance may be different for some or all of the subpopulations. Subpopulations

UConn - EC - 310

Economics 310Lecture 23 Logit Analysis Properties of Maximum Likilihood EstimatorLn(L)^ 2^ 112 Properties of Maximum likelihood estimator of Probit^ has a limiting distribution that is normal with mean vector and variance -

UConn - EC - 214

Economics 214Lecture 18 Ceteris ParibusEconomic analysis often proceeds by considering the consequences of a certain event, ceteris paribus. The advantage of this approach is that it identifies the exclusive impact of the variable un

UConn - EC - 310

Economics 310Lecture 28 Polynomial Distributed lagsRational for Polynomial Lags Koyck restriction solved problem of infinite lag. Polynomial Lag does same for finite lag. Reduces number of parameters to be estimated. Saves degrees of freedo

UConn - EC - 310

Economics 310Lecture 7 Testing Linear Restrictions Single Linear RestrictionBasic mod el : yt = 1 + 2 X t 2 + 3 X t 3 + et Null Hypothesis : a1 1 + a2 2 + a3 3 = c Alternative Hypothesis : a1 1 + a2 2 + a3 3 c let l = a1b11 + a2b2 + a

UConn - EC - 214

Constrained OptimizationEconomics 214 Lecture 412nd Order Conditions Constrained OptimizationSufficient conditions in optimization problems require determining The sign of the second total differential. The sign of the second Total differential

UConn - EC - 310

Economics 310Lecture 8 Linear Restrictions and nonsample informationNon-Sample information More information about our model not contained directly within data. Most nonsample information comes from our economic theory Constant returns to sc

UConn - EC - 310

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UConn - EC - 310

sample 1 28read Q Y P QLAG1.917 2560 1.363 1.861.981 2652 1.361 1.9171.937 2840 1.454 1.9811.924 2882 1.62 1.9371.947 2900 1.688 1.9242.039 3167 1.664 1.9471.985 3220 1.76 2.0392.018 3350 1.812 1.9852.016 3443 1.984 2.0182.114 3546 1.996 2

UConn - EC - 310

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CSU Long Beach - IS - 320

IS 320Summer 2003SimulationThe Essence of Computer Simulation A stochastic system is a system that evolves over time according to one or more probability distributions. Computer simulation imitates the operation of such a system by using the

CSU Long Beach - CHAPTER - 2

The women in this photograph display the type of head deformation that wasa popular custom among women of the Kwakiutl tribes of northern Vancouver,Canada. Wooden boards were strapped to the heads of female infants, andthe resulting elongation of

CSU Long Beach - CHAPTER - 5

The court battles of the Yankton Sioux of southwestern Minnesota showedthe frustration Native Americans were experiencing with the white justicesystem. The Yankton were deeded land and exclusive rights to the RedPipestone Quarry by a treaty in 18

CSU Long Beach - CHAPTER - 3

The Navajo family system is matrilinear, so that when a man marries, hegoes to live with his wife and her parents. Originally a nomadic people,the Navajo tended to travel together in small bands of families. Theyfirst made their living as hunter

CSU Long Beach - CHAPTER - 4

While Indian agents of the 1880s could not be categorized as a group, manywere considered as corrupt as the agency that hired them. Indian agentswere thought to be profiting from graft while the Indians starved. Thiscartoon shows general Nelson

UConn - WEB - 06

Wrack Lines 6:2Find Your Way Around the SoundA marvelous partnership between the Connecticut Department of Environmental Protection and the University of Connecticut has brought us a host of new photos and maps of the Long Island Sound and Connect

UConn - WEB - 2

Wrack Lines 6:2Find Your Way Around the SoundA marvelous partnership between the Connecticut Department of Environmental Protection and the University of Connecticut has brought us a host of new photos and maps of the Long Island Sound and Connect

UConn - WEB - 06

Letter from the editorGreetings, Wrack Lines readers! I trust that as you make the transition from 2006 to 2007, you've made some terrific resolutions. One of mine was, to occasionally flee the barrage of email on the computer, and actually get outs

UConn - WEB - 2

Letter from the editorGreetings, Wrack Lines readers! I trust that as you make the transition from 2006 to 2007, you've made some terrific resolutions. One of mine was, to occasionally flee the barrage of email on the computer, and actually get outs

UConn - WEB - 05

Letter From the EditorDear readers,The transition from 2005 to 2006 seemed to happen all too quickly for me, and by the time you read this Winter issue, hints of Spring may be in the air. Nevertheless, the topics covered are not only timely, but in

UConn - WEB - 2

Letter From the EditorDear readers,The transition from 2005 to 2006 seemed to happen all too quickly for me, and by the time you read this Winter issue, hints of Spring may be in the air. Nevertheless, the topics covered are not only timely, but in

UConn - WEB - 06

Black Hands, Blue Seas Exhibit making a Splash at Mystic Seaport Museum of America and the SeaA new exhibit at the Mystic Seaport Museum of America and the Seas chronicles the significant contributions of African Americans to maritime history. Blac

UConn - WEB - 2

Black Hands, Blue Seas Exhibit making a Splash at Mystic Seaport Museum of America and the SeaA new exhibit at the Mystic Seaport Museum of America and the Seas chronicles the significant contributions of African Americans to maritime history. Blac

UConn - WEB - 07

Letter from the editorDear readers,Days of summer are upon us, and as you put on your rosy, root-beer, or spruce-colored glasses, once again here is my nagging reminder to protect yourself by tossing sunscreen or sunblock into your beach bag or tac

UConn - WEB - 2

Letter from the editorDear readers,Days of summer are upon us, and as you put on your rosy, root-beer, or spruce-colored glasses, once again here is my nagging reminder to protect yourself by tossing sunscreen or sunblock into your beach bag or tac

UConn - WEB - 02

Vol. 2 No. 1In this IssueEditor Peg Van Patten Contributing Writers Kathleen O'Neil Peg Van Patten Tessa Simlick-Getchis Design/Illustration Peg Van Patten Razor Clams - the Cutting Edge of Aquaculture Wrack Lines is published twice a year, or as

UConn - WEB - 2

Vol. 2 No. 1In this IssueEditor Peg Van Patten Contributing Writers Kathleen O'Neil Peg Van Patten Tessa Simlick-Getchis Design/Illustration Peg Van Patten Razor Clams - the Cutting Edge of Aquaculture Wrack Lines is published twice a year, or as

UConn - MATH - 1152

ID: Last:First: HONORS CALC II F 08, MIDTERM I et dt. t x (Suggestion: Write integral as a dierence between two integrals, one from 0 to x and the another from 0 to x. t Write f (t) = et . Setx x x x(1) Find the derivative of the functionI(x

UConn - MATH - 115

1. [12 pts.] In 1910 the population of Mars was about 12 million and growing at 3.5% annually. (a) Write an expression for the function f(t) that gives the population of Mars, in millions, t years after 1910. (b) Find the rate of growth, in people/ye

UConn - MATH - 1122

MATH1122 Practice FinalIMPORTANT: The following practice problems should give you a good idea of what will be on the nal. This practice nal does not, however, include all of the types of questions asked on the nal. Consequently, you should also look

CSU Long Beach - FIN - 350

CHAPTER TENMARKET EFFICIENCYPractical Investment Management Robert A. StrongOutlineThe Efficient Market HypothesisTypes of Efficiency Degrees of Informational Efficiency The Semi-Efficient Market Hypothesis Security Prices and Random Wa

CSU Long Beach - FIN - 650

CHAPTER THIRTEEN CHARACTERISTICS OF COMMON STOCKS1THE CORPORATE FORM FEATURES OF THE CORPORATE FORM common stock with limited liability charter issued to begin stock certificates ownership claim transfer agent conducts title change registra

CSU Long Beach - NAAPAE - 2003

NAAPAE/CTA-PAAC CONFERENCE 2003 April 3-5, 2003 The Queen Mary, Long Beach, California REGISTRATION FORM Name: Last Affiliation:Position/Title: Mailing Address: Tel: ( E-Mail: REGISTRATION FEES ) (Office); ( ) (Home)Middle InitialFirstType of

CSU Long Beach - NAAPAE - 2003

NAAPAE National Conference Long Beach, California, April 3-5, 2003CALL FOR PAPERS, PANELS AND WORKSHOPSCONFERENCE THEME: Weaving Our Collective Strength. STRANDS: Education, Community Development, Social And Cultural Issues EDUCATION (includes, but

CSU Long Beach - AIS - 2000

Americas Conference on Information Systems August 10 through 13th, 2000Invitation to ExhibitThe Association of Information Systems Americas conference (AMCIS) will be held at the Westin Hotel in Long Beach, CA, from Thursday morning, August 10, 200

CSU Long Beach - AIS - 2000

Things to do in Long BeachThe Long Beach Aquarium of the Pacific(562) 590-3100The Long Beach Aquarium of the Pacific is one of the largest aquariums in the United States! Its 550 species fill 17 major living habitats, 30 smaller exhibits and take

CSU Long Beach - AIS - 2000

IMPORTANT AUDIO-VISUAL INFORMATION FOR AMCIS 2000 PRESENTERS If you presenting a paper, or are doing a workshop or tutorial, please note the following: Each room will have an overhead projector, and an LCD projector for PowerPoint presentations. The

UConn - CRB - 05006

COMPRESSED SENSING A LOOK BEYOND LINEAR PROGRAMMING Christian R. Berger, Javier Areta, Krishna Pattipati and Peter Willett Department of Electrical and Computer Engineering, University of Connecticut, Storrs, CT 06269ABSTRACT Recently, signicant at

UConn - ME - 312

ME 312 Fall 2002 Journal Article Assignment Due in class, Tuesday Oct. 29 Pick 1 article from the Journal of Fluid Mechanics that directly utilizes the Navier-Stokes equations. Please choose an article that is at least 3 years old but not more than

UConn - ME - 5110

UConn - ME - 5110

Name:1. (20 points) a) A gas undergoes a free expansion in an isolated system. Evaluateas I to av udetermine theentropy increase as a function of pressure, volume, and temperature. What is the change in entropy for an ideal gas expanding from

UConn - CSE - 230

The CT Insurance Department ProjectProf. Steven A. Demurjian, Sr. Computer Science & Engineering Department The University of Connecticut 191 Auditorium Road, Box U-155 Storrs, CT 06269-3155steve@engr.uconn.edu http:/www.engr.uconn.edu/~steve (860)

CSU Long Beach - CHAPTER - 5

Reformer John Collier (1884-1968) created the American Indian DefenseAssociation in 1923 to fight the assimilationist policies of the DawesSeveralty Act of 1887. Collier valued the Indian spirit of communitycommitment over individual gain, and fo

UConn - MATH - 3160

Mathematics 231. Chapter 3:Example of Tree Diagram Probability CalculationsIf a sample space is subdivided into a nite or countably innite collection of pairwise mutually exclusive events (a complete system of alternatives, or partition), then th

UConn - MATH - 115

Calculating IndeterminatesWe have implicitly made use of the following theorem, which is an almost immediate consequence of the preliminary denition of a limit. Theorem 1. If f (x) = g(x) for x = c and either f or g has a limit at c, then both must

UConn - MATH - 1132

Parametric EquationsWe sometimes have several equations sharing an independent variable. In those cases, we call the independent variable a parameter and call the equations parametric equations. In many cases, the domain of the parameter is restrict

UConn - MATH - 1132

Integration By PartsIntegration by Parts is a technique that enables us to calculate integrals of functions which are derivatives of products. Its genesis can be seen by dierentiating a product and then ddling around. Write out the formula for the

UConn - MATH - 106

The Natural Logarithm Function and The Exponential FunctionOne specic logarithm function is singled out and one particular exponential function is singled out. Denition 1. e = limx0 (1 + x)1/x Denition 2 (The Natural Logarithm Function). ln x = loge

UConn - MATH - 105

Solving Word ProblemsThe strategy for solving word problems, presented in written form, may be summarized in three words:Read the Question!Well expand on how to read the question.Strategy Look for variables and unknowns represent them by symb

UConn - MATH - 115

Dierent Types of LimitsBesides ordinary, two-sided limits, there are one-sided limits (lefthand limits and right-hand limits), innite limits and limits at innity. Consider limx5 One-Sided Limitsx2 4x 5.One might think that since x2 4x 5 0

UConn - MATH - 115

The Product RuleThe formula for the derivative of a product turns out to be more complicated than the formulas for derivatives of sums and dierences. In plain language, The derivative of a product is equal to the rst factor times the derivative of t

UConn - MATH - 115

LimitsDenition 1 (Limit). If the values f (x) of a function f : A B get very close to a specic, unique number L when x is very close to, but not necessarily equal to, a limit point c, we say the limit of f (x), as x approaches c, is L and write lim