You have $1,000 to invest over an investment horizon of three years. the bond market offers various options. you can buy (i) a sequence of three one-year bonds; (ii) a three-year bond; or (iii) a two-year bond followed by a one-year bond. the current yield curve tells you that the one-year, two-year, and three-year yields to maturity are 2.2 percent, 5 percent, and 3.4 percent respectively. you expect that one-year interest rates will be 4 percent next year and 5 percent the year after that. assuming annual compounding, compute the return on each of the three investments.

4. suppose that pollution in a neighborhood comes from two factories, with marginal benefit curves given by mb1 = 12 – p1 and mb2 = 8 – p2. the level of pollution in the neighborhood is given by p = p1 + p2. the government wants to limit pollution by instituting a pollution-rights market. the government’s desired level of p is 10, so it prints 10 pollution rights and offers them for sale to the firms.a)find the equilibrium selling price of a pollution right, as well as the allocation of rights (and hence pollution levels) across the two factories. b)repeat part (a) for the case where the government’s desired level of pollution equals 14. c)comment on the usefulness of a pollution rights market in achieving efficient levels of pollution abatement.

From what part of income should someone take savings?

Adisadvantage of corporations is that shareholders have to pay on profits.