Features that characterize the political ideology called pluralism. Introduction: Pluralism is an assumption that both public and private groups, consisting of different backgrounds such as lifestyle, class, ethnic and racial, serves to benefit the society and that autonomy can be enjoyed by the different cultural groups. Constitutional monarchies, democracies and some aristocracies are included under pluralistic political system.

Question

An individual is investing in a market where spot rates and forward rates apply. In this market, if at time t=0 he agrees to invest £5.3 for two years, he will receive £7.4 at time t=2 years. Alternatively, if at time t=0 he agrees to invest £5.3 at time t=1 for either one year or two years, he will receive £7.5 or £7.3 at times t=2 and t=3, respectively. Calculate the price per £5,000 nominal that the individual should pay for a fixed-interest bond bearing annual interest of 6.6% and is redeemable after 3 years at 110%. State your answer at 2 decimal places.

Answer 1

Question

Chapter 3.1, Problem 1QS1

Summary Introduction

To Determine:

Features that characterize the political ideology called pluralism.

Introduction:

Pluralism is an assumption that both public and private groups, consisting of different backgrounds such as lifestyle, class, ethnic and racial, serves to benefit the society and that autonomy can be enjoyed by the different cultural groups. Constitutional monarchies, democracies and some aristocracies are included under pluralistic political system.

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An individual is investing in a market where spot rates and forward rates apply. In this market, if at time t=0 he agrees to invest £5.3 for two years, he will receive £7.4 at time t=2 years. Alternatively, if at time t=0 he agrees to invest £5.3 at time t=1 for either one year or two years, he will receive £7.5 or £7.3 at times t=2 and t=3, respectively. Calculate the price per £5,000 nominal that the individual should pay for a fixed-interest bond bearing annual interest of 6.6% and is redeemable after 3 years at 110%. State your answer at 2 decimal places.

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