Two messages: (1) As announced ¡­

Two messages: (1) As announced in today's lecture, the schedule will be as suggested. I will update it with term paper deadlines shortly.

(2) Problems: do the remaining parts of the two below posted problem sets, and also the following: Show that f(z) = (1+r/z)^z (the "^" should be a superscript (power!), but that does not work in the messages ...) is increasing (in z) -- that is, that effective interest rate is higher the more often interest is accumulated. Proceed as follows:

• You may want to consider g(z) = ln f(z) = z ln(1+r/z) instead of f; point out that f is increasing if and only if g is (at least whenever the logarithm is defined).
• Find g'(z) and point out that g'(z) tends to 0 when z tends to infinity.
• Find g''(z) and point out that it is negative.
• What does the latter two points tell you about the sign of g'(z)?