Economics 601

Workshop #3 Answer Key

Dustin Chambers

Fall 2014

Instructions: Please show all of your work. Turn-in one assignment per group,
and make sure to list the names of each student in your group.
1.

Fill-in the missing growth values in the table below.

Purchase Information
Date
1-Oct-14

Price

Sale Information

Date

10,000.00 2-Oct-14

17-Feb-13

100.00

Price

Elapsed

Gross

Annualized

Time

Return

Return

0.0134%

5.01%

10,001.34 1 day

24-Feb-13

100.25

1 week

0.25%

13.86%

1 month

-2.00%

-21.53%

1-Jun-11

50.00

1-Jul-11

49.00

1-Apr-13

1,000.00

1-Jul-13

1,050.00

1 quarter

5.00%

21.55%

3-Apr-12

85.00

87.55

6 months

3.00%

6.09%

-14.12%

-3.00%

15-Nov-06

2.

165,000

3-Oct-12
15-Nov-11

141,700

5 years

Go to FRED and download daily bond yields on 10-year US Treasuries

for the period January 1, 2010 to January 1, 2014
(http://research.stlouisfed.org/fred2/series/DGS10). Determine the 5day and 30-day moving average, and plot all three series together.

4.50
4.00
3.50
3.00
2.50

Raw

2.00

MA5

1.50

MA30

1.00
0.50
0.00
2010-02-11

2011-02-11

2012-02-11

2013-02-11

3.

Suppose that you work for a local real estate company and are given
the task of investigating your companys seasonal sales patterns over
the past ten years. Comparing average sales to your firms typical Fall
performance over this 10-year period, you discover that winter sales
are typically 10 units fewer than the fall, spring sales are three units
higher than the fall, and summer sales are typically 20 units greater
than the fall. Use this information to determine appropriate seasonal
adjustment values (relative to the fall), and seasonally adjust the 2013
sales figures. Which season had the best seasonally adjusted sales
performance in 2013?

Fall
Winter
Spring
Summer

2013 Raw
Sales

Seasonal
Adjustments

25
11
18
40

0
+10
-3
-20

Seasonally
Adjusted 2013
Sales
25
21
15
20

The Fall had the best seasonally adjusted sales performance, followed
by the Winter, Summer, and Spring.

4.

For the economic indicators in the following table, state whether you
expect declining (-) or increasing values (+) during a recession and
during a period of economic expansion.
Indicator
Nonfarm Employment
Weekly Claims for Unemployment Insurance
Personal Consumption Expenditures
Retail Sales
Durable Goods Orders
Housing Starts
International Trade Balance (NX)
Inflation (growth rate of CPI)

5.

Recession (+/-)

Expansion (+/-)

+
+
-

+
+
+
+
+
+

Which of the following yield curves is most consistent with a

stagnating/shrinking economy and which is consistent with a growing
economy?

Yield Curve 1

Yield Curve 2

Yield Curve 1 is most consistent with an economic expansion, while Yield Curve
2 is more indicative of an impending recession.