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1. (a) What are the three functions of money? (b) Explain eachfunction briefly and (c) give example per function.

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Casey Durgan
Casey DurganLv2
28 Sep 2019

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Any assistance you can provide regarding the following question is appreciated:

China and the UK have open securities markets and active financial sectors. The money supply of the UK is growing more quickly than its economy while China's money supply is growing at the same rate as its economy. The UK has a trade surplus with China. What do each of the three theories of currency value (flow, stock and asset) suggest about the future rate at which China's currency can be exchanged for currency from the UK? Explain briefly.

1. Suppose you purchased a bond with a 5% annual coupon payment that expires in 10. Two years later the risk-free rate is 7%. Have you been exposed to interest rate risk? Have you been exposed reinvestment risk? Briefly explain why and what interest and reinvestment risk are.

2. Assuming all other bond characteristics are identical which bond would pay a higher coupon payment? Very briefly explain why.

a. A callable bond or a convertible bond

b. A bond with negative covenants vs a bond without negative covenants

c. A Treasury Strip or a regular Treasury bond

d. A secured vs unsecured bond

3. A coupon bond pays interest semi-annually, matures in 30 years, has coupon rate of 4% and is currently selling for $700. What is the annual YTM? Show your work.

4. A semi-annual step-up bond matures in 11 years and pays zero coupon payments for the first 5 years. During the remaining life of the bond it pays a 5% coupon payment. If the bond has a YTM of 8% what is the current price of the bond? Show your work.

5. Why are money markets needed in addition to banks? What cost advantages do the money markets provide?

6. Briefly describe the main differences between the following money market securities:

a. Repurchase agreements and federal funds

b. Commercial paper and treasury bills

You have been recently employed as the director of operations of a hotel. The hotel is in a relatively large city with many other comparable hotels in its vicinity. As part of your job, your responsibilities include:

Establishing a sound data and information infrastructure to support ongoing hotel operations.

Determining what data you should collect on an ongoing basis and how you should use that data to make effective decisions aimed at balancing high occupancy with high per-room profitability

Determining what information you will need to be able to effectively market your hotel

Establishing a basic monthly reporting infrastructure that will enable you to keep track of the key performance metrics

Create a Microsoft Word document listing three different operational functions for your hotel. Examples of hotel functions include setting daily room rates, attracting events (meetings, conferences, etc.), managing hotel material, etc. For each function, specify what data you would need to help you manage the function better, how you would analyze the data (using one or more of the descriptive techniques), what type of data individual variables represent (e.g., interval), and how you would tabulate or graph the data you collected for each function. For example, to set daily room prices, you can use historical sales data to compute average daily prices, a measure of dispersion to estimate up-and-down volatility, and histograms to graphically illustrate occupancy rates associated with different price levels.

Your description of each of the three operational functions should include a clear specification of the function (e.g., setting daily room prices), a description of the data source (e.g., historical sales data), the data type, a specific descriptive technique to convert data into information pertinent to each function, and a description of tabular and graphical results, including examples generated using a Microsoft Excel spreadsheet.

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