Problem Set #2 4. (a) Assuming that all the bonds make only annual payments, what spot rates are imbedded in these prices? First, we need to find the Discount Factors: Bond A: 〖DF〗_1*$100=$93.46 Bond B: 〖DF〗_1*$4+〖DF〗_2*$104=$94.92 Bond C: 〖DF〗_1*$8+〖DF〗_2*$8+〖DF〗_3*$108=$103.64 〖DF〗_1=93.46/100=0.9346 〖DF〗_2=((94.92-(0.9346*4)))/104=0.8767 〖DF〗_3=((103.64-(0.9346*8)-(0.8767*8)))/108=0.8255 Since 〖 DF〗_t=1/〖(1+r_t)〗^t , we have r_t=(1/〖DF〗_t )^(1⁄t)-1. Then solving for r1, r2 and
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economic regions: Western Europe, North America and Asia Pacific. This paper seeks to explain how and why this has occurred. Keywords: video games, global production networks, value, power, embeddedness JEL classifications: L14, L23, L82 Date submitted: 4 October 2004 Date accepted: 12 April 2005 1. Introduction The video games industry1 was born during the early 1960s and has rapidly, and almost continuously, grown in size and scope ever since. It is estimated that the industry was worth around $23
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