Answer:
a. $4,322.74
b. Yes
Explanation:
a. The computation of December futures is shown below:-
December futures = June futures × (1 + 1.9%)
= $1490.60 × (1 + 1.9%)
= $1490.60 × 2.9
%
= $4,322.74
Since the current interest rate is 3.8% and the contract is expired in 6 months so we half the interest rate i.e 1.9%
b. Yes, there is an arbitration opportunity here due to the difference between the future price of December. The real futures price for December is $1,500 and the potential price for December's parity relationship is $4,322.74
It is b because in risk management you need risk resolution
Answer:
A consumer is said to be indifferent between two consumption bundles when the two bundles provide the equal amount of utility
Explanation:
The two bundles are not different from each other in terms of utility which makes thw consumer to be indifferent with both
Answer: Most developed countries experienced a high degree of inequality in the initial phases of economic growth.
Explanation:
Ryan's argument that developing countries will not meet up with the developed countries will be strengthed due to the high degree of inequality between developing countries and developed countries and also, because most developing countries are still in their early stage of economic growth.
There is a high degree of inequality that exist between developing and developed countries due to disparity in income, infrastructure, technological advancement, better health and educational sector. All these results in inequalities.
Developing countries usually have poor infrastructural facilities, poor health sector coupled with a poor functioning educational sector. For an economy to grow and develop, all these must function effectively and efficiently.
