Homework 3 - ECONOMICS 002 Name Fall Semester 2009 Homework...

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ECONOMICS 002 Name: ___________________________________________ Fall Semester 2009 Homework Assignment 3 TA and Time: ___________________________________________ Due October 20, 2009, in class [Note: this is one lecture later than the tentative date in the course syllabus.] Please write your name and the meeting time of your recitation section on your homework. As room is provided for your answers, you can use these sheets if you would like. 1. [15 points] Which of the following are physical capital, and which are financial capital? a. A Toyota Camry at Avis Car Rental b. A loan you take out to start a small business. c. New desktop publishing equipment. d. A bond issued by the U.S. government. e. A bond issued by IBM. f. A pizza oven at Pizza Hut. g. Ten shares of stock issued by Apple computers. h. Stock in a central European company purchased by a U.S. investor. 2. [20 points] Suppose a 4-year bond has a 10 percent coupon and $10,000 face value, and the current market interest rate is 10 percent. (a) What is the price of the bond? Now suppose you knew for sure that
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This note was uploaded on 03/10/2010 for the course ECON 2 taught by Professor Taylor during the Fall '09 term at Georgetown KY.

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Homework 3 - ECONOMICS 002 Name Fall Semester 2009 Homework...

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