Pension funds pay lifetime annuities to recipients. If a firm will remain in business indefinitely, the pension obligation will resemble a perpetuity. Suppose, therefore, that you are managing a pension fund with obligations to make perpetual payments of $3.5 million per year to beneficiaries. The yield to maturity on all bonds is 17.5%. Required:
a. If the duration of 5-year maturity bonds with coupon rates of 16% (paid annually) is 4 years and the duration of 25-year maturity bonds with coupon rates of 9% (paid annually) is 16 years, how much of each of these coupon bonds (in market value) will you want to hold to both fully fund and immunize your obligation?
b. What will be the par value of your holdings in the 25-year coupon bond?

If john can produce 10 chairs or 20 lamps during a week while mary can produce 12 chairs or 22 lamps in the same time, who has the absolute advantage in producing each good?

Peppy roaney believes that pizza is a much more versatile dish than most people realize. as the national marketing manager for pizza guys, he observed how consumers were delighted with barbecue pizza, hawaiian pizza, mexican pizza and other unique combinations. his suggestions for other unusual pizzas, however, were met with a negative response by his superiors. even some of his colleagues laughed at his ideas. peppy's confidence in his ability to understand the market has led him to focus on planning a business of his own. peppy realizes that he will take a risk when he leaves his job with pizza guys and embarks upon a new venture: peppy's pizzazzeria. peppy is excited about the potential of profitably catering to the unmet desires of pizza consumers. peppy is confident that peppy's pizzazzeria will be a success, but only if he has enough money to do things right. since peppy has very little personal wealth, he knows he must obtain financial assistance. in order to prepare for meetings with bankers and p

Select all that apply. select the ways that labor unions can increase wages. collective bargaining reducing the labor supply increasing the demand for labor creating monopolies