ECON632 INTERMEDIATE MICROECONOMICS
S2, 2015
Compulsory Assignment (20%)
Due 3pm Thursday 15 October 2015
(in-class submission)
Instructions:
Answer ALL questions clearly and in your own words. Where diagrams are used to
illustrate your answer, they MUST

Ji Sun
acst603
43534899
Question 1:
Compute the price and modified duration of a bond with
Term to maturity= 5 years
Coupon rate = 6% p.a. convertible semiannually
Yield to maturity = 4% p.a. convertible semiannually
Face value = $1m
Solut

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Energy white paper recommends privatisation of remaining
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bond valuation valuation on a coupon interest payment date
4.0000% coupon rate
2 frequency of coupon payments per year
10 term to maturity in years
$100.00 face value of bond
5.0000% yield to maturity % per year
2 frequency of compounding of yield to matu

amortizing loan: how much can you borrow?
6.0000% interest rate per year i(m)
12 m = frequency of interest compounding per year
12 n = frequency of repayments
$ amount of regular payment on loan = annuity payment per period
6000.00 period
25 term of loan

ECON649/ECON991
Session 1, 2014
Assignment
Due date:
You must submit this assignment
during your class in Week 8 (May 5 9,
2014)
Department of Economics
Read this these instructions CAREFULLY
Instructions: Answer ALL questions, clearly and in your own wor

1. (a)
(i) As known, D = 1400200P
When DQ = 0, P = 7
When P = 0, DQ = 1400
S = 400P1000
When P = 6, SQ = 1400
When SQ = 0, P = 2.5,
Where P = price per loaf of bread
So the diagram as following:
Figure 1.1 Equilibrium price and quantity of bread
The equil

Exercise 1.1
Information for decisions
Ian Boardman has been appointed as the loans officer for the local community bank. One day, a
person walks into the bank looking for a loan to buy a new car. List six items about that individual
that Ian should find

Exercise 9.1
Issue of shares payable in full
The directors of Dunedoo Ltd decided to issue 100 000 ordinary shares.
Required
A. Prepare journal entries (in general journal form) to record the issue of shares as a private
placement to Good Times Ltd for $1

Exercise 12.1
Bad debts direct write-off and allowance methods
(excluding GST)
Centenary Ceramics deals in ceramic pots and figurines. All sales are conducted on a credit basis
and no cash discounts are given. Ignore GST. The following information was ext

Exercise 18.1
Effects of transactions on statement of cash flows
Below is a list of transactions completed by Direct Fashion during 2017. Ignore GST. For each
transaction, indicate (a) the section (i.e. operating, investing or financing) of the statement

Exercise 10.1
Violation of reporting requirements
Several independent situations are described below.
1. The owner of the business included his personal dental expenses in the entitys income statement.
2. The company spent $40 000 on computer software dev

Exercise 16.1
Classification of liabilities
How would each of the following liabilities be classified (current, non-current, or both) at the end of
the financial year?
Unearned revenue
Accrued expenses
Provision for warranty repair costs
10-year debenture

Page 1 of 6
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What's Behind the Bottle Price
When it come to figuring a wine's final price, production costs count, but image is
the wild card
Dana Nigro
Posted: December 19, 2002
Join WineSpectator.com!
There are plenty of

FACULTY OF
BUSINESS AND
ECONOMICS
Individual Assessment Coversheet
FAMILY NAME
GIVEN NAME(S)
FAMILY NAME
TUTORS NAME
STUDENT ID
TUTORIAL DAY/ TIME
UNIT CODE
ECON632
ASSESSMENT TYPE
Assignment
Please tick one box
DUE DATE
Other
Tutorial
ASSESSMENT #
TURN

Page 1 of 2
Bakeries
Croissantonomics
Lessons in managing supply and demand for perishable products
Aug 29th 2015 | NEW YORK | From the print edition
AIRY croissants, rich chocolate-chip biscuits, wedges of succulent cakethe goods at the
City Bakery, in M

$1,000,000.00 Principal
6.00% Interest rate on issue date
2012 Year
12 Month
31 Day
12/31/2012 date of issue
2013 Year
5 Month
31 Day
5/31/2013 date of maturity
151 term to maturity in years
0.4136986301 T=term to maturity in years
24821.9178082192 I=inte

FORMULA SHEET: WEEK 2
P
Principal amount or present value
S
Future value
T
Term of loan / investment
I
Interest earned / paid over term
r
Rate of simple interest per annum
Rate of compound interest per year
SIMPLE INTEREST
i
Formula
,
S PI I S P
Total Int

Q1: How long will it take for $20,000 to grow to $30,000 at 8%p.a. simple interest? (in
years correct to two decimal places)
Solution:
From the question, we know the following values.
S=$30000, P=$20000, r=8%=0.

Sun Ji 43534899
Question 1:
John runs a cleaning business. He is the sole proprietor of the business
which is set up as a sole trader. He has a personal net worth of $500,000
and non-business liabilities of $50,000 being the amount he owes the bank on
a m

Sun Ji 43534899
Question 1:
John runs a cleaning business. He is the sole proprietor of the business
which is set up as a sole trader. He has a personal net worth of $500,000
and non-business liabilities of $50,000 being the amount he owes the bank on

1
Introduction to Valuation of Shares and other Equity
We shall use the concept of Present Value to price shares and other
investments.
Why bother learn about how to do a valuation of shares? Some of the
following reasons suggest themselves:
You are the

1
Bonds
Background: In Australia and the UK and USA, debt securities with a term to
maturity of more than one year are priced on a compound interest basis instead
of on a simple interest basis, while debt securities with a term to maturity of less
than a

Tutorial 2, Week 4
1. Consider the following IS-LM model:
C
= 200 + .25YD
I
= 150 + .25Y - 1000i
G
= 250
T
= 200
(M/P)d = 2Y - 8,000i
i = i0 = 0.05
a. Derive the IS relation. (Hint: You want an equation with Y on the left side, all else on the
right.)
b.

Tutorial 1 answers.
1. Suppose that the economy is characterized by the following behavioural equations:
C = 160 + 0.6 YD
I = 150
G = 150
T = 100
Solve for
a. Equilibrium GDP (Y)
The equilibrium condition is Y = C(YT)+I+G, substitute in the definitions pr

ECON632 Intermediate Microeconomics
Tutorial Week 3
(on Applying the Supply-and-Demand Model)
Solved
1) What would you predict about the elasticities of demand and supply for emeralds? Be sure to state
your reasons in each case.
The demand for emeralds is

ECON632 Intermediate Microeconomics
Tutorial Week 2
(on Supply & Demand)
Solved
Note: Here are just brief answers. Full answers and working are shown in class.
1. In each case below, identify the effect on the market for steak.
a.
An increase in the price

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MH370 deep in minds of Australians, Malaysia Airlines CEO
Christoph Mueller says
Matt O'Sullivan
Published: August 4, 2