Assignment 2
.xlsx
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School
York College of Pennsylvania *
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Course
583
Subject
Economics
Date
Apr 29, 2024
Type
xlsx
Pages
84
Uploaded by jaguar42895 on coursehero.com
Banking Data
Median
Median Years
Median
Median
Median Household
Average Bank
Age
Education
Income
Home Value
Wealth
Balance
35.9
14.8
$91,033
$183,104
$220,741
$38,517
37.7
13.8
$86,748
$163,843
$223,152
$40,618
36.8
13.8
$72,245
$142,732
$176,926
$35,206
35.3
13.2
$70,639
$145,024
$166,260
$33,434
35.3
13.2
$64,879
$135,951
$148,868
$28,162
34.8
13.7
$75,591
$155,334
$188,310
$36,708
39.3
14.4
$80,615
$181,265
$201,743
$38,766
36.6
13.9
$76,507
$149,880
$189,727
$34,811
35.7
16.1
$107,935
$276,139
$211,085
$41,032
40.5
15.1
$82,557
$182,088
$220,782
$41,742
37.9
14.2
$58,294
$123,500
$132,432
$29,950
43.1
15.8
$88,041
$194,369
$267,556
$51,107
37.7
12.9
$64,597
$119,305
$186,156
$34,936
36.0
13.1
$64,894
$141,011
$160,017
$32,387
40.4
16.1
$61,091
$194,928
$113,559
$32,150
33.8
13.6
$76,771
$159,531
$197,264
$37,996
36.4
13.5
$55,609
$123,085
$105,582
$24,672
37.7
12.8
$74,091
$143,750
$217,869
$37,603
36.2
12.9
$53,713
$112,649
$117,441
$26,785
39.1
12.7
$60,262
$126,928
$161,322
$32,576
39.4
16.1
$111,548
$230,893
$331,009
$56,569
36.1
12.8
$48,600
$105,737
$106,671
$26,144
35.3
12.7
$51,419
$104,149
$111,168
$24,558
37.5
12.8
$51,182
$106,898
$88,370
$23,584
34.4
12.8
$60,753
$95,869
$143,115
$26,773
33.7
13.8
$64,601
$103,737
$134,223
$27,877
40.4
13.2
$62,164
$114,257
$144,038
$28,507
38.9
12.7
$46,607
$94,576
$114,799
$27,096
34.3
12.7
$61,446
$122,619
$161,538
$28,018
38.7
12.8
$62,024
$134,430
$149,351
$31,283
33.4
12.6
$54,986
$105,647
$126,929
$24,671
35.0
12.7
$48,182
$114,436
$102,732
$25,280
38.1
12.7
$47,388
$92,820
$118,016
$24,890
34.9
12.5
$55,273
$102,468
$126,959
$26,114
36.1
12.9
$53,892
$92,968
$129,176
$27,570
32.7
12.6
$47,923
$104,539
$88,384
$20,826
37.1
12.5
$46,176
$92,654
$101,964
$23,858
23.5
13.6
$33,088
$105,430
$44,223
$20,834
38.0
13.6
$53,890
$108,446
$95,013
$26,542
33.6
12.7
$57,390
$111,836
$134,434
$27,396
41.7
13.0
$48,439
$100,788
$124,474
$31,054
36.6
14.1
$56,803
$149,138
$101,695
$29,198
34.9
12.4
$52,392
$93,875
$133,101
$24,650
36.7
12.8
$48,631
$95,490
$105,202
$23,610
38.4
12.5
$52,500
$105,377
$139,199
$29,706
34.8
12.5
$42,401
$106,478
$94,867
$21,572
33.6
12.7
$64,792
$116,071
$185,714
$32,677
37.0
14.1
$59,842
$106,949
$135,329
$29,347
34.4
12.7
$65,625
$129,688
$175,000
$29,127
37.2
12.5
$54,044
$108,654
$140,726
$27,753
35.7
12.6
$39,707
$89,552
$80,124
$21,345
37.8
12.9
$45,286
$108,431
$91,928
$28,174
35.6
12.8
$37,784
$92,712
$60,721
$19,125
35.7
12.4
$52,284
$92,143
$146,028
$29,763
34.3
12.4
$42,944
$86,192
$98,778
$22,275
39.8
13.4
$46,036
$99,508
$98,343
$27,005
36.2
12.3
$50,357
$90,750
$126,613
$24,076
35.1
12.3
$45,521
$82,720
$105,346
$23,293
35.6
16.1
$30,418
$139,739
$24,999
$16,854
40.7
12.7
$52,500
$94,792
$147,222
$28,867
33.5
12.5
$41,795
$94,456
$91,806
$21,556
37.5
12.5
$66,667
$78,906
$143,750
$31,758
37.6
12.9
$38,596
$95,364
$54,453
$17,939
39.1
12.6
$44,286
$93,103
$110,465
$22,579
33.1
12.2
$37,287
$75,561
$86,591
$19,343
36.4
12.9
$38,184
$80,099
$76,438
$21,534
37.3
12.5
$47,119
$88,958
$102,993
$22,357
38.7
13.6
$44,520
$96,112
$93,915
$25,276
36.9
12.7
$52,838
$101,705
$75,040
$23,077
32.7
12.3
$34,688
$82,870
$93,750
$20,082
36.1
12.4
$31,770
$74,525
$47,446
$15,912
39.5
12.8
$32,994
$89,223
$50,592
$21,145
36.5
12.3
$33,891
$72,739
$81,880
$18,340
32.9
12.4
$37,813
$86,667
$69,643
$19,196
29.9
12.3
$46,528
$88,889
$96,591
$21,798
32.1
12.3
$30,319
$67,083
$34,367
$13,677
36.1
13.3
$36,492
$172,768
$24,999
$20,572
35.9
12.4
$51,818
$80,357
$135,185
$26,242
32.7
12.2
$35,625
$64,737
$76,321
$17,077
37.2
12.6
$36,789
$86,563
$69,764
$20,020
38.8
12.3
$42,750
$77,717
$95,192
$25,385
37.5
13.0
$30,412
$138,911
$24,999
$20,463
36.4
12.5
$37,083
$70,909
$95,833
$21,670
42.4
12.6
$31,563
$81,597
$71,759
$15,961
19.5
16.1
$15,395
$67,500
$24,999
$5,956
30.5
12.8
$21,433
$83,456
$24,999
$11,380
33.2
12.3
$31,250
$91,049
$52,976
$18,959
36.7
12.5
$31,344
$77,541
$36,510
$16,100
32.4
12.6
$29,733
$60,252
$27,531
$14,620
36.5
12.4
$41,607
$76,270
$98,455
$22,340
33.9
12.1
$32,813
$40,313
$79,167
$26,405
29.6
12.1
$29,375
$52,096
$24,999
$13,693
37.5
11.1
$34,896
$65,357
$81,818
$20,586
34.0
12.6
$20,578
$113,239
$24,999
$14,095
28.7
12.1
$32,574
$50,244
$49,662
$14,393
36.1
12.2
$30,589
$69,375
$48,890
$16,352
30.6
12.3
$26,565
$64,038
$42,543
$17,410
22.8
12.3
$16,590
$67,850
$24,999
$10,436
30.3
12.2
$9,354
$91,708
$24,999
$9,904
22.0
12.0
$14,115
$53,923
$24,999
$9,071
30.8
11.9
$17,992
$46,885
$24,999
$10,679
35.1
11.0
$7,741
$99,375
$24,999
$6,207
Credit Risk Data
Loan Purpose Checking Savings Months CustomerMonths Employed
Gender Marital Status Age
Small Appliance
$0
$739
13
12
M
Single
23
Furniture
$0
$1,230
25
0
M
Divorced
32
New Car
$0
$389
19
119
M
Single
38
Furniture
$638
$347
13
14
M
Single
36
Education
$963
$4,754
40
45
M
Single
31
Furniture
$2,827
$0
11
13
M
Married
25
New Car
$0
$229
13
16
M
Married
26
Business
$0
$533
14
2
M
Single
27
Small Appliance
$6,509
$493
37
9
M
Single
25
Small Appliance
$966
$0
25
4
F
Divorced
43
Business
$0
$989
49
0
M
Single
32
New Car
$0
$3,305
11
15
M
Single
34
Business
$322
$578
10
14
M
Married
26
New Car
$0
$821
25
63
M
Single
44
New Car
$396
$228
13
26
M
Single
46
Used Car
$0
$129
31
8
M
Divorced
39
Furniture
$652
$732
49
4
F
Divorced
25
New Car
$708
$683
13
33
M
Single
31
Repairs
$207
$0
28
116
M
Single
47
Education
$287 $12,348
7
2
F
Divorced
23
Furniture
$0 $17,545
34
16
F
Divorced
22
Furniture
$101
$3,871
13
5
F
Divorced
26
Furniture
$0
$0
25
23
M
Married
19
Furniture
$0
$485
37
23
F
Divorced
27
New Car
$0 $10,723
11
15
M
Single
39
Business
$141
$245
22
33
M
Single
26
Used Car
$0
$0
19
58
M
Single
50
Used Car
$2,484
$0
49
46
M
Single
34
Small Appliance
$237
$236
37
24
M
Single
23
Small Appliance
$0
$485
19
12
M
Single
23
Education
$335
$1,708
37
7
M
Single
46
Small Appliance
$3,565
$0
31
32
M
Single
35
Small Appliance
$0
$407
13
2
F
Divorced
28
Business
$16,647
$895
16
34
M
Single
25
Business
$0
$150
49
46
F
Divorced
36
Small Appliance
$0
$490
5
41
M
Single
41
Furniture
$0
$162
25
1
M
Divorced
54
Small Appliance
$940
$715
9
40
F
Divorced
43
Small Appliance
$0
$323
49
42
M
Married
33
New Car
$0
$128
13
74
M
Single
34
Other
$218
$0
49
0
M
Single
39
Used Car
$0
$109
25
26
M
Single
34
Small Appliance
$16,935
$189
37
60
M
Single
30
Furniture
$664
$537
31
33
M
Single
48
Furniture
$150
$6,520
12
1
F
Divorced
19
Small Appliance
$0
$138
7
119
M
Married
29
Furniture
$216
$0
19
3
F
Divorced
26
New Car
$0
$660
17
75
M
Single
42
Business
$0
$724
25
8
M
Single
30
Small Appliance
$0
$897
19
5
M
Married
38
Small Appliance
$265
$947
25
5
M
Married
21
Furniture
$4,256
$0
16
36
F
Divorced
32
Business
$870
$917
28
6
M
Single
35
New Car
$162
$595
22
10
M
Divorced
46
Used Car
$0
$789
25
28
M
Single
37
Education
$0
$0
37
114
M
Single
39
Furniture
$0
$746
13
16
F
Divorced
29
New Car
$461
$140
19
32
M
Single
27
New Car
$0
$659
19
5
F
Divorced
22
Furniture
$0
$717
37
60
M
Single
40
New Car
$0
$667
29
10
M
Single
44
New Car
$580
$0
11
8
M
Single
26
Small Appliance
$0
$763
13
46
F
Divorced
57
New Car
$0
$1,366
19
17
M
Single
34
Small Appliance
$0
$552
25
4
M
Married
47
Small Appliance
$0 $14,643
16
115
M
Single
46
Business
$758
$2,665
13
31
M
Single
38
Used Car
$399
$0
31
0
F
Divorced
52
Furniture
$513
$442
7
0
M
Single
34
Furniture
$0
$8,357
25
5
M
Single
29
New Car
$0
$0
22
9
M
Single
39
Small Appliance
$565
$863
10
81
M
Single
36
Business
$0
$322
28
28
M
Single
25
Furniture
$0
$800
13
69
M
Single
59
Small Appliance
$0
$656
37
85
M
Single
27
New Car
$166
$922
13
2
F
Divorced
24
Business
$9,783
$885
13
3
F
Divorced
25
Business
$674
$2,886
49
32
M
Single
29
Repairs
$0
$626
43
0
M
Single
64
Business
$15,328
$0
25
9
M
Single
31
New Car
$0
$904
12
6
M
Single
38
Education
$713
$784
61
17
M
Single
41
New Car
$0
$806
19
3
F
Divorced
22
Education
$0
$3,281
19
20
F
Divorced
29
New Car
$0
$759
16
59
M
Single
32
Small Appliance
$0
$680
25
3
F
Divorced
34
Used Car
$0
$104
37
25
M
Single
23
Small Appliance
$303
$899
13
3
M
Single
21
Small Appliance
$900
$1,732
37
11
F
Divorced
49
Furniture
$0
$706
31
14
M
Divorced
31
Education
$1,257
$0
10
65
F
Divorced
40
Small Appliance
$0
$576
7
14
F
Divorced
28
Repairs
$273
$904
7
2
M
Married
21
Business
$522
$194
25
79
M
Divorced
30
Small Appliance
$0
$710
25
1
F
Divorced
37
Small Appliance
$0
$5,564
25
93
M
Single
33
Small Appliance
$0
$192
46
13
M
Single
22
New Car
$0
$637
13
21
F
Divorced
23
Small Appliance
$514
$405
49
13
F
Divorced
21
Furniture
$457
$318
19
108
M
Single
40
Small Appliance
$5,133
$698
19
14
M
Single
36
New Car
$0
$369
10
16
M
Single
29
Retraining
$644
$0
13
88
M
Single
37
Furniture
$305
$492
19
1
F
Divorced
26
New Car
$9,621
$308
25
41
M
Single
37
Education
$0
$127
13
22
M
Single
39
Business
$0
$565
19
14
M
Married
27
Furniture
$0 $12,632
16
9
F
Divorced
19
New Car
$0
$116
49
45
M
Single
45
Used Car
$0
$178
13
89
M
Single
34
Small Appliance
$6,851
$901
13
21
F
Divorced
43
Furniture
$13,496
$650
19
20
M
Single
33
Business
$509
$241
25
14
M
Single
35
Used Car
$0
$609
37
6
M
Single
31
Furniture
$19,155
$131
25
24
M
Single
25
Furniture
$0
$544
19
15
F
Divorced
27
Small Appliance
$0 $10,853
25
81
F
Divorced
56
Used Car
$374
$0
25
14
M
Single
45
Large Appliance
$0
$409
49
15
M
Single
53
Furniture
$828
$391
9
12
F
Divorced
23
Furniture
$0
$322
13
9
F
Divorced
25
Small Appliance
$829
$583
7
18
F
Divorced
63
Small Appliance
$0 $12,242
25
53
M
Single
34
Furniture
$0
$479
19
0
M
Single
24
New Car
$939
$496
19
56
M
Single
35
New Car
$0
$466
25
42
M
Single
30
New Car
$889
$1,583
37
79
M
Single
29
Furniture
$876
$1,533
31
21
F
Divorced
20
Small Appliance
$893
$0
16
94
M
Single
49
Business
$12,760
$4,873
13
73
M
Single
56
Furniture
$0
$0
13
94
M
Single
48
Small Appliance
$0
$717
22
10
F
Divorced
24
Small Appliance
$959
$7,876
28
20
M
Single
22
Small Appliance
$0
$4,449
25
87
M
Single
30
Other
$0
$0
25
54
M
Single
39
Business
$0
$104
25
23
M
Married
20
Repairs
$0
$897
19
2
F
Divorced
22
New Car
$698
$4,033
16
20
M
Married
24
Furniture
$0
$945
13
6
M
Divorced
41
Furniture
$0
$836
25
99
M
Single
32
Small Appliance
$0
$325
19
13
F
Divorced
23
Small Appliance
$12,974 $19,568
13
7
F
Divorced
41
Furniture
$0
$803
13
89
M
Single
52
Small Appliance
$317 $10,980
13
17
M
Single
65
Business
$0
$265
13
10
F
Divorced
26
Repairs
$0
$609
31
3
M
Divorced
33
Small Appliance
$0
$1,851
12
0
F
Divorced
56
Furniture
$192
$199
25
5
F
Divorced
24
New Car
$0
$500
28
7
F
Divorced
20
New Car
$0
$509
16
3
M
Single
35
Used Car
$0
$270
25
25
M
Single
34
New Car
$0
$457
13
63
M
Single
38
Used Car
$0
$260
25
78
M
Single
34
New Car
$942
$3,036
25
36
M
Single
37
Small Appliance
$0
$643
19
6
M
Single
31
New Car
$3,329
$0
19
15
M
Single
67
Used Car
$0
$6,345
25
19
M
Single
26
Education
$0
$922
37
9
F
Divorced
24
Furniture
$0
$909
25
3
M
Single
21
Large Appliance
$0
$775
19
8
M
Married
46
Furniture
$0
$979
25
48
M
Single
22
Furniture
$0
$948
19
2
F
Divorced
20
Business
$339
$2,790
22
55
M
Divorced
60
Used Car
$0
$309
49
37
M
Single
25
Small Appliance
$0
$762
10
1
F
Divorced
21
Small Appliance
$0
$970
13
14
F
Divorced
22
Used Car
$105
$320
28
54
M
Single
29
Small Appliance
$0
$861
13
111
M
Single
56
Repairs
$216
$262
37
2
M
Single
32
Furniture
$113
$692
11
14
M
Divorced
30
Used Car
$109
$540
37
1
M
Married
27
New Car
$0
$470
13
0
F
Divorced
37
New Car
$0
$192
7
2
M
Single
39
New Car
$8,176 $12,230
7
5
M
Married
26
Repairs
$0
$772
25
19
M
Divorced
32
Furniture
$468 $14,186
22
24
M
Single
31
Used Car
$7,885
$6,330
16
14
M
Single
35
Small Appliance
$0 $18,716
19
93
M
Single
31
New Car
$0
$886
22
96
M
Single
64
Business
$0
$750
37
2
M
Divorced
27
Small Appliance
$0
$3,870
25
11
F
Divorced
31
Small Appliance
$0
$3,273
13
4
M
Married
32
Business
$0
$406
6
35
M
Single
73
Furniture
$0
$461
13
48
F
Divorced
30
Furniture
$0
$340
19
4
M
Married
42
Small Appliance
$0
$6,490
19
85
M
Single
45
Small Appliance
$734
$348
7
100
M
Single
27
Furniture
$0
$506
25
3
F
Divorced
22
Used Car
$0 $14,717
28
7
M
Single
26
Business
$172
$0
25
36
M
Single
33
New Car
$644
$1,571
19
1
F
Divorced
27
New Car
$0
$0
25
19
F
Divorced
24
Furniture
$617
$411
31
3
M
Married
21
New Car
$0
$544
25
0
F
Divorced
28
Small Appliance
$586
$0
13
0
M
Single
51
Furniture
$0
$835
19
42
F
Divorced
21
Small Appliance
$0
$823
25
47
M
Single
27
Business
$0
$5,180
22
4
M
Single
40
Small Appliance
$0
$408
16
12
M
Single
34
New Car
$0
$821
48
5
F
Divorced
34
Education
$522
$385
10
66
M
Single
63
New Car
$585
$2,223
16
0
M
Single
33
New Car
$5,588
$0
22
10
F
Divorced
28
New Car
$0
$605
37
20
F
Divorced
24
Furniture
$352
$7,525
13
4
F
Divorced
18
Small Appliance
$0
$3,529
14
0
F
Divorced
63
Business
$2,715
$1,435
49
14
M
Divorced
37
Other
$560
$887
25
20
M
Single
38
Small Appliance
$895
$243
13
4
M
Married
22
New Car
$305
$4,553
7
2
F
Divorced
31
Small Appliance
$0
$418
19
4
M
Single
31
New Car
$0
$771
25
0
M
Single
42
Furniture
$0
$463
11
13
M
Single
24
Business
$8,948
$110
31
90
M
Single
65
Used Car
$0 $10,099
16
108
M
Single
22
Used Car
$0 $13,428
7
0
F
Divorced
22
Small Appliance
$0
$208
13
23
M
Single
51
Small Appliance
$0
$552
13
15
F
Divorced
23
Education
$0
$3,105
16
19
F
Divorced
30
Small Appliance
$483
$415
19
6
M
Married
32
Large Appliance
$0
$1,238
13
0
F
Divorced
21
Education
$0
$238
13
2
F
Divorced
52
Furniture
$0
$127
31
35
F
Divorced
22
Business
$663
$0
19
57
M
Single
41
New Car
$624
$785
37
9
F
Divorced
53
Repairs
$0
$718
19
0
F
Divorced
54
Furniture
$0
$493
13
21
M
Single
37
Small Appliance
$152
$757
49
45
M
Single
27
New Car
$0
$9,125
13
24
F
Divorced
25
Small Appliance
$0
$364
13
12
F
Divorced
34
Business
$498
$598
37
14
M
Divorced
29
New Car
$0
$374
10
19
M
Single
27
Small Appliance
$156
$0
13
58
F
Divorced
32
Used Car
$1,336
$0
37
11
M
Single
29
New Car
$0
$508
13
3
M
Single
32
Small Appliance
$0
$956
25
4
F
Divorced
28
Furniture
$0
$636
22
41
F
Divorced
25
New Car
$2,641
$0
13
71
F
Divorced
51
Used Car
$0
$1,519
40
74
M
Single
44
Business
$0
$922
19
29
M
Single
33
Furniture
$0
$180
5
2
F
Divorced
22
Used Car
$0
$701
22
108
M
Single
35
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Related Questions
Jennifer, a CFP® practitioner meets with new clients, Max and Alicia, for the first time. She reviews their overall financial and estate planning goals, and their list of current assets. Max and Alicia have the following assets: Max’s 401(k) $250,000 - Alicia is the beneficiary Alicia’s 403(b) $520,000 – Max is the beneficiary House owned as TbyE valued at $350,000 Vacation home Max inherited with his sister Ava as JTWROS valued at $500,000 Mutual fund account owned as TIC valued at $700,000 Bond portfolio owned JTWROS valued at $600,000 Max and Alicia have two children – Doug and John. Doug is single and has no children. John was killed in a car accident last year, leaving two children, Tammy and Denise. Max and Alicia ask Jennifer several questions about their estate planning. Assuming Max predeceases Alicia and Alicia does not change her will, what is the amount that Tammy will inherit at Alicia’s death?
Select one:
a. $1,235,000
b. $1,110,000
c. $617,500
d. $605,000
arrow_forward
Question 3
I should do my best to get a credit card from a company that will tell me both my
interest rate and my credit limit before I commit to taking the card.
True.
False.
DELL
%23
24
&
2
4.
7
e
r
t
y
u
C
b
arrow_forward
The table below shows Demand and Supply for loanable fund at given time.
Real interest rate
Quantity of loanable fund demanded (billion $)
Quantity of loanable fund supplied (billion $)
0.01
1000
400
0.02
950
450
0.03
900
500
0.04
850
550
0.05
800
600
0.06
750
650
0.07
700
700
0.08
650
750
0.09
600
800
0.10
550
850
0.11
500
900
0.12
450
950
0.13
400
1000
0.14
350
1050
0.15
300
1100
Instructions:
Using excel, find the equilibrium real interest rate and quantity of loanable fund.
show the equilibrium on a graph.
If this country experiences a recession business cycle phase that decreases the demand for loanable fund by $200 billion.
Find the new equilibrium real interest rate and quantity of loanable fund.
Show the shift on the graph.
list Two factors that shift SLF rightward and two factors that shift DLF rightward
What is the meaning of crowding out?…
arrow_forward
Explain the difference of the demand of financial services of the rich and middle income people and poor people. *
arrow_forward
Q17. What is a general partnership in Canada?
a) A business owned by two or more individuals with equal shares
b) A business owned by two or more individuals with different shares
c) A business owned by a single individual
d) A business owned by a corporation
arrow_forward
Compare credit, savings, and investment services available to the consumer from financial institutions.
arrow_forward
Calculate the accrued interest (in $) and the total purchase price (in $) of the bond purchase. (Round your answers to the nearest
cent.)
Time
Coupon
Market
Accrued
Commission
Bonds
Total
Company
Since Last
Rate
Price
Interest
per Bond
Purchased
Price
Interest
Company 2
9.7
79.75
23 days
$
$9.55
15
$
arrow_forward
7.0%
6.5%
6.0%
5.5%
5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
LL 2.0%
1.5%
1.0%
0.5%
0.0%
$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 $150 $160
Bank Excess Reserves ($Billion)
The model of the federal funds market that we have learned is sometimes called the
corridor model. This is because, in this model the equilibrium fed funds rate fluctuates
between the discount rate and the interest on reserves. This gives the Fed a tool to
control the fluctuations in the equilibrium fed funds rate. Let's see how. Assume that
the supply of federal funds equals $70 billion.
Suppose that currently the discount rate is 4.5 percent and the interest on reserves
equals 1.5 percent. In this case, if demand for reserves increases by $40 billion dollars,
the equilibrium fed funds rate will increase to
percent, and if it
decreases by $40 billion, the equilibrium fed funds rate will decrease to
percent.
Now suppose the Fed wants to reduce the fluctuations in the equilibrium fed funds
rate. So it…
arrow_forward
7.0%
6.5%
6.0%
5.5%
5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
LL 2.0%
1.5%
1.0%
0.5%
0.0%
$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 $150 $160
Bank Excess Reserves ($Billion)
Consider the above graph that shows demand for excess reserves by the banking
system as a whole. The discount rate is 4.5 percent and the Fed pays an interest of
1.50 percent on excess reserves. Currently banks as a whole are holding an excess
reserve of $70 billion. This means that the equilibrium fed funds rate is
0.03
percent.
Suppose that demand for excess reserves by the banking system increases by $20
billion (banks collectively want to hold $20 billion more excess reserves). In that case,
the equilibrium fed funds rate will increase to 0.02
percent.
Suppose that demand for excess reserves by the banking system increases by another
$20 billion (now demand has increased by a total of $40 billion). In that case, the
equilibrium fed funds rate will increase to 0.01
percent.
Federal Funds Rate
arrow_forward
1. A man deposited $4,000 in a bank at a rate of 12% per annum from
January 10,1999 to November 18,1999. Find the exact simple interest.
Group of answer choices
$410.3014
210.3014
P310.3014
#510.3014
2. A man deposited $2,000 in a bank at a rate of 12% per annum from
January 10,1999 to November 18,1999. Find the accumulated amount.
Group of answer choices
2205
2105
2305
2255
arrow_forward
The table below shows the market for credit cards at various interest rates in millions of dollars. What is the equilibrium
interest rate?
Interest
Quantity of Financial Capital Supplied
Quantity of Financial Capital Demanded
Rate
(Lending) ($ millions)
(Borrowing) ($ millions)
9%
$200
$275
10.5%
$205
$255
12.0%
$210
$235
13.5%
$215
$215
15.0%
$220
$195
16.5%
$225
$175
Provide your answer below:
arrow_forward
Subprime mortgages are O mortgages issued to borrowers with flawed credit histories. government-backed mortgages issued by Fannie Mae and Freddie Mac. mortgages issued to borrowers who fail to document that their incomes are high enough to afford their mortgages. mortgages which are bundled together by financial institutions and sold to investors.
arrow_forward
Peter Scents has been given two competing offers for short-term financing. Both offers are for borrowing $15,00 for 1 year. The first offer is a discount loan at 8%; the second offer is for interest to be paid at maturity at a stated interest rate of 9%. Show Solutions and Explanation.
A. Calculate the effective annual rates for the discount loan. (Format: 1.11%)
B. Calculate the effective annual rates for the loan with interest to be paid at maturity. (Format: 1.1%)
arrow_forward
1.Which of these is not a tax-advantaged retirement account?
Question options:
Thrift Savings Plan
401(k)
Roth IRA
Brokerage Fund
2.
You have decided to set aside 15% of your salary towards retirement. You work at a firm where your employer matches your contribution to your 401(k) plan, dollar for dollar, up to 5% of your salary. Which of these statements is correct?
Question 4 options:
If you contribute 6% of your salary, the employer match is equivalent to a 100% return on your contribution.
What your employer contributes should not play into your decision.
It is always a good idea to contribute less than your employer does.
This stuff is stupid.
arrow_forward
Consider a 25-year loan with an annual interest rate of 7 percent and monthly payments of $1,201.53. The discount points charged by the lender at origination are 3 percent and the cost of borrower title insurance and mortgage insurance are, respectively, 0.5 percent and 2.0 percent of the loan amount. Additional fees paid to other third parties (i.e., not the lender) will equal $4,000. What is the loan amount? What is the lender’s yield/IRR? What is the effective borrowing cost (EBC)?
USE EXCEL
arrow_forward
First America Bank's monthly payment charge on a 48-month, $19,000 loan is $508.26. The U.S. Bank's monthly payment fee is
$517.70 for the same loan amount.
What would be the APR for an auto loan for each of these banks? (Use Table 14.1.)
Note: Round your final answers to the nearest hundredth percent.
APR
First America Bank
between
%
and
%
U.S. Bank
between
%
and
%
arrow_forward
A 25-year-old student is offered an opportunity to
invest some money in a retirement account that
pays 5% annual interest compounded continuously.
How much does the student need to invest today
to have 1 million when she retires at age 56?
What if she could
earn 6% annual interest
compounded continuously instead?
90,717.65
.a
.a
135,335.28
.b
.a
102,452.13
.b
.C
197,473.56
.1
arrow_forward
Question No 03
If you go to an Islamic bank and ask for financing for following purposes, which financial product Islamic bank will most likely to use and why?
1. 10 years financing to start a new project2. 5 years financing to construct a house on your land3. 3 years financing for a heavy duty generator4. 6 months financing for IPhone 12
arrow_forward
( Solve the following problems. Draw the cash flow diagram for each problem and use the interest rate with five decimal places. Box your final answer and upload the picture of your complete solution. )
arrow_forward
You borrow $100 from one friend. You sell another friend an old cell phone case for
$30. You give a third friend an $80 loan. Which of the following represents all of
your assets?
The $100 you owe your friend, plus the cellphone case, plus the $80 your friend
owes you
The $100 you owe your first friend, plus the $80 your third friend owes you
The $30 your second friend gave you for the old cell phone case, plus the $80
the third friend owes you.
The $100 you owe the first friend
The $30 your second friend gave you for the old cell phone case
arrow_forward
Suppose a bond pays annual interest of $50. Compute the interest rate per year that a bondholder can earn for each face value in the following table.
Face Value Interest Rate per Year
(Dollars)
200
500
1,000
(Percentage)
If the annual interest paid stays the same and the face value of the bond goes up, then the interest rate paid for the bond per year
arrow_forward
Describe how financial statements are used to help businesses make finance-related decisions
arrow_forward
For the following questions, choose the letter of the best answer (Show any work and explanations):
1. A home loan is taken out for $162,000. The loan is for 30 years, with a nominal annual rate of 7.5%,resulting in monthly payments of $1,132.73. The interest portion of the first payment will be what?
a) $1,012.50
b) $682.73
c) $120.23
d) Answer cannot be determined without more information
2. A $100,000 asset has a $20,000 salvage value after its 10-year useful life. The depreciation allowanceusing straight-line depreciation is closest to what value?
a) $2,000
b) $8,000
c) $10,000
d) $12,000
3. With reference to the straight-line depreciation method, which statement is false?
a) The deprecation life (n) is set based on the MACRS property classes.
b) An equal amount of depreciation is allocated in each year.
c) The book value of the asset decreases by a fixed amount each year.
d) The asset is depreciated down to a book value equal to the salvage value.
4. This past year, CLL…
arrow_forward
Bank Three has equity = $250 million, return on equity (ROE) = 15%, interest expense = $105 million, provision for loans (P) = $30 million, noninterest income = $45 million, noninterest expense = $20 million and a tax rate = 34%.
What is the total interest income required?
$216.82 million.
$236.82 million.
$146.82 million.
$166.82 million.
arrow_forward
Question 2 of 10. Paul owns 100 shares of stock in an S corporation which he purchased for $57 per share. He gave 10 shares to his daughter, Julie. He also sold 10 shares to his friend, Bill, for $65 a share. What are Paul, Julie, and Bill's respective bases after those transactions? Paul: $4,560Julie: $570Bill: $570 Paul: $4,560Julie: $570Bill: $650 Paul: $5,700Julie: $570Bill: $570 Paul: $5,700Julie: $570Bill: $650
arrow_forward
Tucker works for a retail distribution company that was recently started. Tucker has invested a lot of his earnings into shares of the company. When quarterly earnings are posted, Tucker receives a check for 8% of the quarterly profit of the company. Tucker belongs to a __________ corporation.
arrow_forward
What is a bond?
A certificate representing a loan from an investor to a corporation or government entity that makes fixed payments for a set time and eventually pays back the loan in full.
A certificate of ownership in a corporation with the right to a percentage of the earnings.
A payment for an investor to a corporation for the rights to future profits.
A group of stocks sold together for a set price.
arrow_forward
SEE MORE QUESTIONS
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ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Related Questions
- Jennifer, a CFP® practitioner meets with new clients, Max and Alicia, for the first time. She reviews their overall financial and estate planning goals, and their list of current assets. Max and Alicia have the following assets: Max’s 401(k) $250,000 - Alicia is the beneficiary Alicia’s 403(b) $520,000 – Max is the beneficiary House owned as TbyE valued at $350,000 Vacation home Max inherited with his sister Ava as JTWROS valued at $500,000 Mutual fund account owned as TIC valued at $700,000 Bond portfolio owned JTWROS valued at $600,000 Max and Alicia have two children – Doug and John. Doug is single and has no children. John was killed in a car accident last year, leaving two children, Tammy and Denise. Max and Alicia ask Jennifer several questions about their estate planning. Assuming Max predeceases Alicia and Alicia does not change her will, what is the amount that Tammy will inherit at Alicia’s death? Select one: a. $1,235,000 b. $1,110,000 c. $617,500 d. $605,000arrow_forwardQuestion 3 I should do my best to get a credit card from a company that will tell me both my interest rate and my credit limit before I commit to taking the card. True. False. DELL %23 24 & 2 4. 7 e r t y u C barrow_forwardThe table below shows Demand and Supply for loanable fund at given time. Real interest rate Quantity of loanable fund demanded (billion $) Quantity of loanable fund supplied (billion $) 0.01 1000 400 0.02 950 450 0.03 900 500 0.04 850 550 0.05 800 600 0.06 750 650 0.07 700 700 0.08 650 750 0.09 600 800 0.10 550 850 0.11 500 900 0.12 450 950 0.13 400 1000 0.14 350 1050 0.15 300 1100 Instructions: Using excel, find the equilibrium real interest rate and quantity of loanable fund. show the equilibrium on a graph. If this country experiences a recession business cycle phase that decreases the demand for loanable fund by $200 billion. Find the new equilibrium real interest rate and quantity of loanable fund. Show the shift on the graph. list Two factors that shift SLF rightward and two factors that shift DLF rightward What is the meaning of crowding out?…arrow_forward
- Explain the difference of the demand of financial services of the rich and middle income people and poor people. *arrow_forwardQ17. What is a general partnership in Canada? a) A business owned by two or more individuals with equal shares b) A business owned by two or more individuals with different shares c) A business owned by a single individual d) A business owned by a corporationarrow_forwardCompare credit, savings, and investment services available to the consumer from financial institutions.arrow_forward
- Calculate the accrued interest (in $) and the total purchase price (in $) of the bond purchase. (Round your answers to the nearest cent.) Time Coupon Market Accrued Commission Bonds Total Company Since Last Rate Price Interest per Bond Purchased Price Interest Company 2 9.7 79.75 23 days $ $9.55 15 $arrow_forward7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% LL 2.0% 1.5% 1.0% 0.5% 0.0% $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 $150 $160 Bank Excess Reserves ($Billion) The model of the federal funds market that we have learned is sometimes called the corridor model. This is because, in this model the equilibrium fed funds rate fluctuates between the discount rate and the interest on reserves. This gives the Fed a tool to control the fluctuations in the equilibrium fed funds rate. Let's see how. Assume that the supply of federal funds equals $70 billion. Suppose that currently the discount rate is 4.5 percent and the interest on reserves equals 1.5 percent. In this case, if demand for reserves increases by $40 billion dollars, the equilibrium fed funds rate will increase to percent, and if it decreases by $40 billion, the equilibrium fed funds rate will decrease to percent. Now suppose the Fed wants to reduce the fluctuations in the equilibrium fed funds rate. So it…arrow_forward7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% LL 2.0% 1.5% 1.0% 0.5% 0.0% $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 $150 $160 Bank Excess Reserves ($Billion) Consider the above graph that shows demand for excess reserves by the banking system as a whole. The discount rate is 4.5 percent and the Fed pays an interest of 1.50 percent on excess reserves. Currently banks as a whole are holding an excess reserve of $70 billion. This means that the equilibrium fed funds rate is 0.03 percent. Suppose that demand for excess reserves by the banking system increases by $20 billion (banks collectively want to hold $20 billion more excess reserves). In that case, the equilibrium fed funds rate will increase to 0.02 percent. Suppose that demand for excess reserves by the banking system increases by another $20 billion (now demand has increased by a total of $40 billion). In that case, the equilibrium fed funds rate will increase to 0.01 percent. Federal Funds Ratearrow_forward
- 1. A man deposited $4,000 in a bank at a rate of 12% per annum from January 10,1999 to November 18,1999. Find the exact simple interest. Group of answer choices $410.3014 210.3014 P310.3014 #510.3014 2. A man deposited $2,000 in a bank at a rate of 12% per annum from January 10,1999 to November 18,1999. Find the accumulated amount. Group of answer choices 2205 2105 2305 2255arrow_forwardThe table below shows the market for credit cards at various interest rates in millions of dollars. What is the equilibrium interest rate? Interest Quantity of Financial Capital Supplied Quantity of Financial Capital Demanded Rate (Lending) ($ millions) (Borrowing) ($ millions) 9% $200 $275 10.5% $205 $255 12.0% $210 $235 13.5% $215 $215 15.0% $220 $195 16.5% $225 $175 Provide your answer below:arrow_forwardSubprime mortgages are O mortgages issued to borrowers with flawed credit histories. government-backed mortgages issued by Fannie Mae and Freddie Mac. mortgages issued to borrowers who fail to document that their incomes are high enough to afford their mortgages. mortgages which are bundled together by financial institutions and sold to investors.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage LearningPrinciples of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax