Critically examine the proposition that the forward exchange rate is an unbiased predictor of the future spot rate. (50%)

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This examination contains five questions
Please answer any three
All questions carry equal marks
Sub-questions equally valued except where indicated
Final exam worth 50% of total course assessment
Complete answers must be written in the examination scripts provided
Please write legibly in blue or black ink
Please start each answer on a new page
Show all calculations
1. (a) If the Euro is trading at USD/EUR = 0.751131 on the spot market and current annualized money market rates in the U.S. and the Eurozone are 0.06% and 1.197% respectively, what will be the 180-day and 90-day forward rates under interest rate parity conditions? What exactly would happen if the forward rates in practice are below those given using IRP? (50%)
(b) Critically examine the proposition that the forward exchange rate is an unbiased predictor of the future spot rate. (50%)
2. Gastronome® is a well-known manufacturer of frozen foods in the United States. They are considering a proposal to manufacture their Gourmet™ brand of high quality frozen foods in the United Kingdom. One inducement to make the investment is subsidised financing in the form of a six-year loan of $20 million at 4% per annum. This loan would be repayable in six equal end-year payments. Additional information includes:
Gastronome® cost of equity 24 %
Market cost of debt (unsubsidised) 10 %
Optimal capital structure 40% debt, 60% equity
UK T-Bill rate 8 %
Corporate tax rate, USA and UK 34 %
(a) What discount rate should Gastronome® use to evaluate the proposed project? (33%)
(b) Would you recommend that Gastronome® undertake this investment? Explain fully. (33%)
(c) What is the value of the subsidised loan? How would such a loan affect Gastronome®’s capital budgeting analysis? What (if any) are the controversial aspects? (33%)
3. Following Brexit—the UK’s departure from the European Union (EU)—in Spring 2019 it is anticipated that European capital markets will become more segmented. This is likely to be made worse if there is a ‘no deal’ Brexit. Analyse fully the likely impact of this segmentation on the Cost of Capital (WACC) for UK-based international companies.
4. Outlandish plc is a UK importer with a euro-denominated payable of €100 million due in 3 months’ time. Outlandish wants to hedge this payment, and has identified four key methods:
(a) Money market instruments (b) fx futures
(c) fx forwards (d) buying a call option on the euro
The spot rate is currently 0.66 GBP/EUR, and the three-month forward rate is 0.6616 GBP/EUR. Money market interest rates are 4% per annum for sterling and 3% per annum for euros. Compare and contrast each of the four strategies, and make a full recommendation to Outlandish.
5. Bibbity Bobbity Boo (BBB) manufactures and sells specialist sportswear for women and girls. The company began operating in in the 1990s, initially specialising in swimwear. Increased demand has seen its range of products and markets become increasingly pan-European. BBB has serious concerns about the impact of the UK leaving the EU (Brexit) in Summer 2019. BBB is seriously considering moving a significant portion of its European operations to Lille, France, where it will operate under the umbrella of BBB (EU). BBB believes such a move will enable it to continue to participate seamlessly in the EU markets, despite being segmented from the UK. Additionally, BBB believes the cost of operations in Lille will be lower, both for labour and overheads.
(a) What are the key exposures (risks) of such a move? (50%)
(b) What can Bibbity Bobbity Boo do to mitigate each of these exposures? (50%)
NO PLAGIARISM!!!!!!!

What drives the subjective feeling of well-being in old age?

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What drives the subjective feeling of well-being in old age?

Empirical analysis and comparison of different measures to improve subjective well-being
– Life satisfaction
– Look back on life with happiness
– Meaningful life

Development of testable hypotheses for evaluation of experience and circumstances at different measures of subjective well-being (SWB)

Influence of present circumstances vs. past events

Data basis:
SHARE: Survey of Health, Ageing and Retirement in Europe, http://www.share-project.org/data-access.html
(data can be either be accessed individually or delivered for this assignment only)

Introductory literature (attached):
Clark, A. (2015). Is Happiness the Best Measure of Well-Being? Mimeo: Paris School of Economics.
Baumeister, R.F., K.D. Vohs, J.L. Aaker and E.N. Garbinsky (2013). Some key differences between a happy life and a meaningful life. Journal of Positive Psychology, 8(6): 505–16.

Topic belongs to:
new/modern political economy, public choice, public economics, economic behavior model

Important:
– Autor should best know how to use Excel, R (www.r-project.org) or, less welcome, Strata
– Thesis should consist of 20 pages, max. 8’000 words (appendix and references excluded)
– On Tuesday, October 6th, I need a disposition on 2-3 powerpoint slides or on a word document for a 5 minute presentation. It should include:
o Description and limitation of the problem
o Structured presentation of the ideas (“in the main part this and that will be done” etc), possibly a screenshot of the data from Stata or Excel
o Connection to the scientific literature (study of literature)
o Further planned working steps and structure
– Deadline for completion is November 15th
– Will also need 10 slides for a 15-minute presentation of the work by then, with following contents:
o Short presentation of the topic
o Problem definition
o Red thread of the thesis
o Most important arguments and findings
o Reference to open questions or problems encountered while working

With the largest GDP of any nation, why does it appear that the residents of Bhutan appear more content than those of the United States?

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According to Dr. Inghehart “…some types of societies clearly do a much better job of enhancing their people’s sense of happiness and well-being than other ones….” With the largest GDP of any nation, why does it appear that the residents of Bhutan appear more content than those of the United States? Please read the New York Times article (attachment) on the nation of Buthan. It is evident that with little economic growth and prosperity the residents of this area are happy with their lives. On the other hand, industrialized nations like the United States with wealth and all the modern conveniences available to us, many are not “thrilled” with our lives and we are often left wanting a bigger house, faster car, etc.

Taking a look at the following categories, give an honest assessment (1 bad – 10 great) on the following areas (you don’t publish those).

After you complete that excercise please evaluate why some with so little seem happy while many people in industrialized economies don’t seem content. Another way to look at this is to identify 4 areas where you can look back at your life and have a life well lived.

What aspect of immigrant assimilation do you think is most important?

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1. What aspect of immigrant assimilation do you think is most important? In other words, if you had to develop a policy aimed at improving assimilation, would you focus on labor market assimilation, assimilation in education, getting migrants out of ethnic enclaves, improving destination country language fluency, assimilation in health, or naturalization? Briefly explain your choice.

How does Sen make the argument that globalization cannot be reduced to a westernization

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Global Political Economy How to Judge Globalism Questions

1.How does Sen make the argument that globalization cannot be reduced to a westernization phenomenon?

2.Why does he think it is important not to reduce globalization as merely an outgrowth of western imperialism?

3.In discussing whether globalization leads to greater inequality how does Sen argue the apologists for globalization respond to such issues?

4.What is his alternative response for assessing the fairness of distributions of the benefits of globalization?

5.For Sen the issue isn’t globalization or the spread of markets but rather the institutional arrangements that either do or don’t create fair opportunities. What kinds of omissions and commissions in the institutional arrangements does he think need greater attention to make globalization a fairer process for all?

What is right and what is wrong with the federal budgetary process?

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In your view, what is right and what is wrong with the federal budgetary process? If you think something needs fixing, what is it and how would you change it in a democratic manner?

Discuss/share what benefits, limitations and or effects and impact it has on the economy.

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ASK QUESTIONS IF NEEDED, FOLLOW WORD DOC.
Team Presentation Assignment
A Team Group was created to facilitate your communications, discussions, and decisions on what you wish to present for this assignment.
Your team will select EITHER an article of no more than 10 pages in length OR a video no more than 5-6 minutes. You will read/view and discuss in your group discussions and present to the class the main points of the article. You will share with your professor and colleagues which will be discussion by your colleagues on the Discussion Board
Each Team Member Must Submit Assignment Individually After Presenting as a Team
Example/Suggestion of Points of Discussion should include;
1. What area of Economics was your article/video selection about? Eg. Market Systems, Scarcity of Resources, Supply and Demand, Technological Advances….
2. Discuss/share what benefits, limitations and or effects and impact it has on the economy. (National, Regional, Global).
3. Discuss why it is important to address or discuss such issues. Make a case as to why it is important as a team.
Please let me know of any Team Challenges, Questions, Clarifications or Guidance you may need in successfully completing the Assignment.

List at least 5 potential independent variables you believe will affect the decision to pay for the express lane.

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In many congested areas, regional transportation authorities have introduced toll express lanes along commuting routes. These express lanes have less congestion and allow for faster commutes times during rush hours. However, in order to access these express lanes drivers must purchase and install an EZ-Pass transponder in their vehicle that automatically charges the driver a fee for the use of the lanes. You want to learn more about the factors that may influence a commuter’s decision to pay for access to these express lanes. You define a dependent variable [express], which = 1 if a commuter pays for express lane access, and = 0 if the commuter only drives on the regular toll-free sections of highway.
List at least 5 potential independent variables you believe will affect the decision to pay for the express lane. Describe how and why you expect them to affect the likelihood of a driver choosing to pay for an express lane.

Why in your opinion did the Neo-Classical school lose influence during this period?

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Keynesiansm really gained adherents during the Great Depression in the 1930s; the Depression was a global phenomenon, not just a US one. Why in your opinion did the Neo-Classical school lose influence during this period?

Compare the taxes used by the State of Georgia to your assigned state and assess the results against a set of tax criteria you establish.

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Task: Compare the taxes used by the State of Georgia to your assigned state and assess the results against a set of tax criteria you establish.
Purpose: To reinforce concepts on tax principles and individual tax sources.
Tax principles/criteria represent the normative standards that should guide policy (see Lewis & Hildreth, pages 202-218).
Focus on the rate, base, and (recent) collections for at least the following revenue sources (if the state government uses them): sales and use tax, personal and corporate income taxes, property tax, gas (motor fuel) tax, and the cigarette (tobacco) tax.
For example, if you purchase a suit for $100 that is defined by state law as a taxable item (therefore, it is part of the tax base) and the state sales tax rate is 10%, then the state would collect $10 from that purchase (the total that you would pay is $110, including the $100 price of the shirt plus $10 of taxes). Adding up all the taxed purchases that the state receives constitutes the sales tax collections for the year.
This information will allow you to compare these two state tax systems against a policy framework and draw conclusions about the results.
After you find the information on taxes for both states, evaluate them based on the tax criteria. This involves the first step of choosing your criteria (read pages 202-218 of Lewis & Hildreth). As you read through, think about how taxes of your state and Georgia follow any of the criteria. For example, which of the two states have a broader tax base? Does the broad tax base lead to higher revenues or does the state have a high tax with a narrow base? Provide information that you think helps support your point of view. You should include a minimum of 3 criteria to evaluate your taxes.
The class may research the State of Georgia revenue system as a group and then use that information and framework as a guide for pulling comparative information on the assigned second state government; to do so will require reading ahead (Chapter 7 and perhaps dividing up some of the work on the Georgia profile.

In your report, you have to show research using your assigned state’s (NORTH DAKOTA)
primary source documents (and provide the weblinks and page numbers) and not rely only on secondary documents.
You should start your research with these documents:
Official source documents from your assigned state government on its taxes (in your paper, give the web site addresses that confirm they are from your assigned state government’s web site)

State revenue departments generally provide annual statistical report’s such as the
https://dor.georgia.gov/department-revenue-annual-statistical-reports

Policy organizations with a national focus provide comparative information, such as this one by the https://www.taxpolicycenter.org/topic/state-and-local-issues/state-and-local-taxes/statistics

Other information that you find and research, especially from the assigned state itself.
Prepare the State Tax Policy report of between 5 and 7 pages, double spaced, regular margins and font, no cover, with adherence to standard English composition. Tightly edit your work.
The title of your report should be: “Tax Policy Comparison of the States of [fill in your assigned state name] and Georgia”.
Follow the Preparation of Work Products guidelines found in the Course Policies section. Don’t turn in your first draft.