Business, 11.05.2021 21:10 skyemichellec
Modify the Diamond-Dybvig model in the following way: Suppose that there are two assets, an illiquid asset that returns (1 + R) units of consumption goods in period 2 for each unit invested in period 0 and a liquid asset that returns one unit of consumption goods in period 1 (nothing in period 2) for each unit invested in period 0. The illiquid asset cannot be liquidated in period 1.
Required:
a. Determine a consumers lifetime budget constraint when there is no bank, show this in a diagram, and determine the consumer's optimal consumption when an early consumer and when a late consumer in the diagram.
b. Determine a bank's lifetime budget constraint, show this in your diagram, and determine the optimal deposit contract for the bank in the diagram Are consumers who deposit in the bank better off than in part (a)? Explain why or why not?
c. Is there a bank run equilibrium? Explain why or why not?
Answers: 2
Business, 22.06.2019 00:50, emma3216
cranium, inc., purchases term papers from an overseas supplier under a continuous review system. the average demand for a popular mode is 300 units a day with a standard deviation of 30 units a day. it costs $60 to process each order and there is a five−day lead−time. the holding cost for a paper is $0.25 per year and the company policy is to maintain a 98% service level. cranium operates 200 days per year. what is the reorder point r to satisfy a 98% cycleminus−service level? a. greater than 1,700 unitsb. greater than 1,600 units but less than or equal to 1,700 unitsc. greater than 1,500 units but less than or equal to 1,600 unitsd. less than or equal to 1,500 units
Answers: 1
Business, 22.06.2019 13:30, bobbycisar1205
Hundreds of a bank's customers have called the customer service call center to complain that they are receiving text messages on their phone telling them to access a website and enter personal information to resolve an issue with their account. what action should the bank take?
Answers: 2
Modify the Diamond-Dybvig model in the following way: Suppose that there are two assets, an illiquid...
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