ECO 442
Money and Banking
Homework 2
Due: Wednesday, February 5.
Assume that three types of used cars exist: low-quality, mid-quality, and high-quality. A highquality car is worth $6,000, a mid-quality is worth $3,000, and a low-quality is worth $1,000.
S
ECO442
Money and Banking
Homework 3
Due: Thursday, March 16.
Please show your work and explain your answers.
1. Virgil can choose either a safe or a risky project. For every $100
invested, a safe project yields $116 with certainty, while a risky
project i
ECO 442
Money and Banking
Homework 4
Due: Tuesday, March 28.
Ashley and Jordan are savers who each have $200 to lend to Coventry Corp.
Ashley and Jordan, however, can determine Coventrys project only by doing
research. The cost of research is $20, and len
ECO 442
Money and Banking
Homework 2
Due: Tuesday, February 21.
Please explain your answers and show your work.
Firms with safe and risky projects exist in equal numbers. A safe investment
of $100 turns into $108 with certainty. A risky investment is equa
CHEERY ADVICE FOR MID-SEMESTER EXAM
Here are some questions to help you to prepare for the exam on Thursday. The questions constitute neither a
complete list of possible questions, nor a complete survey of possible topics. Most of the topics covered by
th
ECO 442
Money and Banking
February 7.
Homework 1
Due: Tuesday,
Please hand in a neat, legible, stapled copy. Explain all answers. The
number of points you receive depends on the quality of your explanation.
You may hand in a joint copy with at most one ot
University of Dayton
Spring 2017
ECO 442
Money and Banking
Course Syllabus
Purpose: The U.S. financial system is quite complex, and crucial to the functioning of
the economy. We seek to understand the nature and functions of private and
public financial i
ECO 442
Money and Banking
Homework 2
Due: Monday, February 15.
a. Yes, the safe project is efficient. The project expected value is
$106, which is more than the risk free cost of funds. The risky
project is inefficient because it has an expected value of
ECO 442
Money and Banking
fooling).
Homework 4
Due: Friday, April 1 (no
An investor needs $400,000 to finance his project. The return on the project
is 5% and the cost of funds is 2%. The cost of research is $10,000. Anna and
Bella each have $200,000 avai
ECO442
Money and Banking
Homework 3
Due: Monday, March 14.
1. Khalid can choose either a safe or a risky project. For every $100 invested, a safe
project yields $116 with certainty, while a risky project is equally likely to yield $200
or zero. Khalid nee
John Agnello
ECO 442
Money and Banking
Homework 1
Due: Wednesday, January 22.
Please hand in a neat, legible, STAPLED copy. EXPLAIN all answers. The number of points you
receive depends on the quality of your explanation. You make hand in a joint copy wit
John Agnello
ECO 442
Money and Banking
Homework 2
Due: Wednesday, February 5.
Assume that three types of used cars exist: low-quality, mid-quality, and high-quality. A highquality car is worth $6,000, a mid-quality is worth $3,000, and a low-quality is wo
l'Zt'TU 442 0
Money and Banking /
Quiz ]
Namew
I wh' , ~
' lbh 0! 1h ' - .
c iOHOW'W Is a feature ofall economic models?
V. The ' '
ability to predict accurately at least one month in advance
x. v I - I u
C98lihc ability to predict perfectly for peri
ECO 442
Money and Banking
Homework 5
Due: Friday, April 29.
List the techniques that lenders can use to remedy problems of asymmetric
information. For each technique, explain how it works, and the particular
information problem that the technique addresse