Author Question: Suppose a firm has 100 machines and 100 shares outstanding. The price per share is 2, and the ... (Read 239 times)

dejastew

  • Hero Member
  • *****
  • Posts: 562
Suppose a firm has 100 machines and 100 shares outstanding. The price per share is 2, and the purchase price of a machine is 1. So Tobin's q is equal to
 
  A) 2.
  B) 1.
  C) 0.5.
  D) 1.5.

Question 2

Let: (1 ) Pt be the price of one unit of a market basket of goods (i.e., a composite commodity) in year t; (2 ) Pet+1 be the expected price of one unit of a market basket of goods in year t + 1; (3 ) et+1 be the expected rate of inflation between period t and t + 1; and (4 ) it be the one-year nominal interest rate. Suppose an individual borrows the equivalent of one unit of a composite commodity today. Given this information, which of the following expressions represents (i.e., is equal to) the amount of the composite commodity one must repay in one year?
 
  A) (1 + it)(Pet+1)/(Pt)
  B) (1 + et+1)/(1 + it)
  C) (1 + et+1)/(1 + it) - 1
  D) (1 + it)(Pt)/(Pet+1) - 1
  E) none of the above



SVictor

  • Sr. Member
  • ****
  • Posts: 365
Answer to Question 1

A

Answer to Question 2

A



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Of the estimated 2 million heroin users in the United States, 600,000–800,000 are considered hardcore addicts. Heroin addiction is considered to be one of the hardest addictions to recover from.

Did you know?

Sperm cells are so tiny that 400 to 500 million (400,000,000–500,000,000) of them fit onto 1 tsp.

Did you know?

Only 12 hours after an egg cell is fertilized by a sperm cell, the egg cell starts to divide. As it continues to divide, it moves along the fallopian tube toward the uterus at about 1 inch per day.

Did you know?

During pregnancy, a woman is more likely to experience bleeding gums and nosebleeds caused by hormonal changes that increase blood flow to the mouth and nose.

Did you know?

Though methadone is often used to treat dependency on other opioids, the drug itself can be abused. Crushing or snorting methadone can achieve the opiate "rush" desired by addicts. Improper use such as these can lead to a dangerous dependency on methadone. This drug now accounts for nearly one-third of opioid-related deaths.

For a complete list of videos, visit our video library