For DR.SAMUELSON- ONLY!

Week #2 Homework-FM

Go back to the book's homepage. Use the drop-down menu to select Chapter 4. Click on "Build a Model Problems." Click on the model problem given (there's only one). It corresponds to Problem 4-35 on page 184 of the text.

Now select Chapter 5. Click on "Build a Model Problems." Click on the model problem. It corresponds to Problem 5-24 on page 229 of the text.

Work problems 4-1 through 4-8 on pp. 179-180 in your text. Use an Excel spreadsheet for all these problems. You may use either a formula such as those on page 177, or you may use the financial functions built into Excel. Either way, I need to be able to determine how you have derived your answer.

Also, The Federal Reserve continues to keep interest rates at extremely low levels as the economy remains sluggish. In your opinion, what are some of the risks/downsides associated with such an accommodative monetary policy? And what actions do you believe the Fed should take in the near term?(200 words o less)