Other Economics Answers

A.

Using a practical example, explain what is meant by an Effective Annual Interest

Rate?

B.

Z Ltd bond has a 10 percent coupon rate and a K1,000 face value. Interest is paid

semiannually, and the bond has 20 years to maturity. If investors require a 12

percent yield, what is the value of the bond? Also, determine the effective annual

yield on this bond?

C.

Nkandu has a K10,000 to invest in a stock portfolio on LuSE. He intends to invest

in Stock X with an expected return of 14 percent and Stock Y with an expected

return of 10.5 percent. If his goal is to create a portfolio that will generate a return

of 12.4 percent, how much money should he invest in Stock X and Stock Y?

6. The cholesterol level of a sample of 15 female employees are as follows:

154 , 216, 171, 188, 229, 203, 184 ,173, 181, 147, 188, 188, 230, 150, 210

Find and interpret the:

a) mean

b) median

c) mode

1.Suppose that the world price for a good is 40, and the domestic demand and supply curves are given by the following equations:

            Demand: P=80-2Q

            Supply: P=5+3Q

a. How much is consumed? How much is produced domestically?

b. What are the values of producer and consumer surplus?

c. If a 10% tariff is imposed, by how much do consumption and domestic

production change?

d. What is the change in consumer and producer surplus?

e. How much revenue does the government earn from the tariff?

f. What is the net national cost of the tariff?