Exercise 1: Suppose there is a market demand function for good X as: = -2PX + 10 Questions:
Draw the market demand curve for good X
Evaluate the demand elasticity for the price at various points of this demand curve having prices of P = 5; P = 4; P = 2,5; P = 1 và P = 0.
Give some comments on relationship between the X'sprice and one's demand elasticity for the price demand elasticity for the price.
2) Suppose there are market supply and demand functions of good X as: S + + + + The market supply function of X: Q = 4P - 2
+ The market demand function of X: Q = -2P + 10
Question:
a. Define the equilibrium price and quantity of the market
b. Evaluate the market supply and demand elasticity at the equilibrium point

Information on gerken power co., is shown below. assume the company’s tax rate is 40 percent. debt: 9,400 8.4 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 100.5 percent of par; the bonds make semiannual payments. common stock: 219,000 shares outstanding, selling for $83.90 per share; beta is 1.24. preferred stock: 12,900 shares of 5.95 percent preferred stock outstanding, currently selling for $97.10 per share. market: 7.2 percent market risk premium and 5 percent risk-free rate. required: calculate the company's wacc. (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) wacc %

Arestaurant that creates a new type of sandwich is using (blank) as a method of competition.

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.