Questions Market Securities:
1/ What is the required rate of return composed of?
Required Rate of Return, which is the rate of return which compensate for the
time, the rate of inflation, and the uncertainty of the return.
1/ What are the risks associated
Solution to Homework 1
1. (Basic Game Theory)
Time magazine and Newsweek are considering which cover story to publish next week. Both of
them have two alternatives to choose from: Impeachment or Financial Crisis. Below there are
three versions of game.
A.
BUS247
Business economics
Chapter Eight: Product Differentiation
In this chapter, we try to explain some kind of paradox that we have observed in reality.
That is, why in many apparently competitive real markets such as, cell phone, credit card,
and soft
Business Economics
Chapter Five : Dynamic Market Competition
Goal of this chapter
1. Understand the basic game theory techniques used in dynamic games
2. Understand the infinitely repeated Bertrand model. 2.1) description of the trigger strategy and 2.2)
BUS247
Business economics
Chapter Eight: Product Differentiation
In this chapter, we try to explain some kind of paradox that we have observed in reality.
That is, why in many apparently competitive real markets such as, cell phone, credit card,
and soft
Business Economics
<Additional Example of Chapter 7>
Model setup:
Here we have three important players: manufacturer (3M, providingpost-it, whose strategy is the
wholesale price w) and 2 retailers (Staples, office depot, whose strategy is the retail price
Business Economics
<Additional Example of Chapter 5>
Model setup:
We have two firms play an infinitely repeated Bertrand game (the firm who
charges the lower price wins the whole market), each with the same marginal cost
20. The market demand function is
Business Economics
<Additional Example of Chapter 7>
Model setup:
Here we have three important players: manufacturer (3M, providingpost-it, whose strategy is the
wholesale price w) and 2 retailers (Staples, office depot, whose strategy is the retail price
Business Economics
<Additional Example of Chapter 6>
Model setup:
Here we have two important players: manufacturer (Hyundai, whose strategy is the wholesale price w)
and retailer (car dealer, whose strategy is the retail price p). Moreover, they move in a
Business Economics
Chapter Four : Oligopoly Competition
Goal of this chapter
1. Understand the Cournot completion and learn how to solve a symmetric Cournot duopoly problem
2. Understand the Bertrand competition and learn how to solve both symmetric and a
Business Economics
<Additional Example of Chapter 6>
Model setup:
Here we have two important players: manufacturer (Hyundai, whose strategy is the wholesale price w)
and retailer (car dealer, whose strategy is the retail price p). Moreover, they move in a
Business Economics
<Additional Example of Chapter 5>
Model setup:
We have two firms play an infinitely repeated Bertrand game (the firm who
charges the lower price wins the whole market), each with the same marginal cost
20. The market demand function is
Homework 2
1. (Price Discrimination)
Indicate the types of price discrimination for the cases below. Based on the above examples, explain the
difference between these types of price discrimination.
Case A1. Gino Pizza offers a lunch special: 5.59$ for a g
Business Economics
Chapter one : Game Theory
Goal of this chapter
1. what is a dominant strategy and how players can use it to solve the game.
2. what is a dominated strategy and how players can use it to solve the game.
3. what is a Nash Equilibrium for
Homework 2
1. (Price Discrimination)
Indicate the types of price discrimination for the cases below. Based on the above examples, explain the
difference between these types of price discrimination.
Case A1. Gino Pizza offers a lunch special: 5.59$ for a g
Homework 1
1. (Basic Game Theory)
Time magazine and Newsweek are considering which cover story to publish next week. Both of them
have two alternatives to choose from: Impeachment or Financial Crisis. Below there are three
versions of game.
A. (Time and N
Business Economics
Chapter two : Review of Basic Microeconomics
Goal of this chapter
1. Refresh what you learned in ECON 102.
2. To learn necessary math techniques to solve the monopolist's problem.
3.To understand some important issues about monopoly and
Business Economics
Chapter Three : Price Discrimination
Goal of this chapter
1. Understand four major types of price discrimination: bundling; perfect price discrimination (1st
degree);
market segmentation (3rd degree); screening/non-linear price discrimi
BUS24I Final Exam
May2020l4
ProfessorCourtadon
Name
TRUE/FALSE. Write T if the statement is true and T if the statement is false.
1) A bond will trade at a discount if its coupon rate is less than its yield to maturity.
1)
2) Firms should use the most acc
Problem solved by file Chapter8IRR.xlsx
Solving for IRR of project A in excel file
Solving for IRR of project B
Solving for question C
Other problems
a) +15Million PV of annuity of 3 payment of 8.6 at a rate of 10.3%
= 15-21.27447479 = -6.27447479 million
Problem solved by file Chapter8IRR.xlsx
Solving for IRR of project A in excel file
Solving for IRR of project B
Solving for question C
Other problems
a) +15Million PV of annuity of 3 payment of 8.6 at a rate of 10.3%
= 15-21.27447479 = -6.27447479 million
Problem 9-30
Billingham Packaging is considering expanding its production capacity by purchasin
million. Unfortunately, installing this machine will take several months and will parti
feasibility study to analyze the decision to buy the XC-750, resulting
Problem 4-22
You are trying to decide how much to save for retirement. Assume you plan to save
$5000 per year with the first investment made one year from now. You think you can
earn 10% per year on your investments and you plan to retire in 43 years, imm
Queens College
Department of Economics
Business 351 Summer 2011
Final Examination
Professor Thurston
1. A security has a price equal to the exercise price on its call option. Which is higher: the
premium on the call with the same exercise price, or the pr