The following table shows the probability that one diagnosed epileptic patient has seizures in one week. Based on previous research, the probability related to its occurrences are tabulated below: Find the probabilities P(S) and P(M). P(S) = 82% and P(M) = 8% P(S) = 64% and P(M) = 36% P(S) = 18% and P(M) = 64% P(S) = 36% and P(M) = 64%

Is the following statement True (“T”) or False (“F”)?    If the sample is drawn from a nearly symmetric distribution, the normal approximation can be good even for a fairly small value of n. 

I hope you have a great spring break. Before you go, what is the due date of Pearson HW for Chapters 6,13, and 14?

Which of the following does the expectations theory not explain? 

According to the Federal Reserve Bank’s charter, the discount rate must always be [fedrate1] than the federal funds rate. 

Suppose the Federal Reserve conducts an open market sale of $50 million in government securities to a primary dealer bank. What will happen to the bank’s balance sheet?

Assume that the Fed would like to conduct an open market purchase of $100 million to increase liquidity in the banking system. Also, assume that the required reserve rate is 10%. Using the simple money multiplier calculate the effect this will have on the money supply.   

Which of the following entities does not play an active role in the money supply process?

Below are the expected 1-yr. interest rates over the next five years along with their respective liquidity premiums Year 1: 3.0% // Liquidity Premium: 0%Year 2: 3.5%//  Liquidity Premium: 0.25%Year 3: 4.0% //  Liquidity Premium: 0.50%Year 4: 4.5% //  Liquidity Premium: 0.75%Year 5: 5.0% // Liquidity Premium: 1% Under expectations theory, the interest rate on a 4yr. bond would be [crazy1] and the interest rate on a 4yr. bond would be [crazy2] under liquidity premium theory.   

Between the expectations theory, segmented markets theory, and liquidity premium theory; which explains all three facts about the yield-curve?