Question- A free market economy operates to the benefit of both consumer and producer to achieve the most efficient outcome, and therefore there is no role for a government to play in controlling the market. Consider the extent to which this statement is correct. 25 marks
Q1) Haroon’s budget line relating good X and good Y has intercept of 100 unit of good X and 40 units of good Y. if the price of good X is 24, what is Haroon’s income? What is the price of good Y? What is then slope of budget line?
Suppose the current interest rate is 5% what price should one expect to pay for a $1000 treasury bill, due to mature in one year, which had originally been sold when interest rate was 10%?
Consider a bond with coupon of $80 and a face value of $1000 due to mature in one year's time. The current interest rate is 5%. The current price of this bond is?
9. Shanz Enterprises has a beta of 1.28, the real risk-free rate is 2.00%, investors expect a 3.00% future inflation rate, and the market risk premium is 4.70%. What is Kollo's required rate of return?