Suppose you've just inherited $10,000 from a relative. you're trying to decide whether to put the $10,000 in a non-interest-bearing checking account so that you can use it whenever you want (that is, hold it as money), or to use it to buy a u. s. treasury bond. suppose the interest rate on the bond is 5% per year. a) what would be the opportunity cost of holding the $10,000 as money? b) suppose the interest rate fell to 2% per year. what would happen to the opportunity cost of holding the $10,000 as money? c) what does this previous analysis suggest about the market for money?

What does the consumer price index measure? a. the change in prices of all goods and services over time b. the change in prices of specific goods and services over time c. the change in prices of final goods and services over time

The link between volume of production and the cost of building manufacturing operations is particularly important in industries characterized byanswers: process innovations.product manufacturing.product innovation.process manufacturing.

The treasurer for pittsburgh iron works wishes to use financial futures to hedge her interest rate exposure. she will sell five treasury futures contracts at $139,000 per contract. it is july and the contracts must be closed out in december of this year. long-term interest rates are currently 7.30 percent. if they increase to 9.50 percent, assume the value of the contracts will go down by 20 percent. also if interest rates do increase by 2.2 percent, assume the firm will have additional interest expense on its business loans and other commitments of $149,000. this expense, of course, will be separate from the futures contracts. a. what will be the profit or loss on the futures contract if interest rates increase to 9.50 percent by december when the contract is closed out