1.We see that the 6 month zero rate is given as=-ln(Price/Face Value)*12/t=-ln(94.9/100)*12/6=10.46930%

2.PLEASE SEE THE ATTACHED FILE.

3. Comparative Advantage is exists in imperfect markets. In comparative Advantage Company or Country can produce products or services in lower Oppertunity cost than other companies or countries.

>> It helps organization to specialize in producing particular products or services.

>> Above things can happen in imperfect market as all the markets in the worlds are imprefect as perfect markets are hyppothetical.

>> In this situation in imperfect market buyers and selleres have influence in terms of price

>> This kind of market situation have monopoly, oligopoly , monopolistic competation, monopsonies and oligopsonies.

>> Here organizations are having competation of market shares, barriers of entry ans exit and tough competation to acquire customers.

>> Ex: Us company outsource many services from Indian call centre as they provide service at very cheaper rate so here US company do tradeoff and it is its cost advantages.

>>So here in comperative advantage country or company focus on thier best part and work on that and get economical growth.

>> China have comparative advange in electorinics product due to having higher number of labour and they are cost effective.

>> So ,this theory is based on concept of relativity. A company or country which is relatively better in producing any product or services, should focus on that particulars that will lead to effectivity and efficiency for that organization.

4.

CENTRAL BANK PLAY CRITICAL ROLE IN BALANCE OF PAYMENT

TRADE DEFICITS OCCUR WHEN DEMAND OF IMPORTS IS HIGH AND EXPORT IS LOW, THIS MEANS THAT DOMESTIC DEMAND FOR FOREIGN CURRENCY INCREASED, NOW TO MANAGE THIS CENTRAL BANK BUYS DOMESTIC CURRENCY AND SELL FOREIGN CURRENCY IN FOREIGN EXCHANGE MARKET

IN OPPOSITE SITUATION, I.E WHEN THERE IS TRADE SURPLUS AND EXPORT IS HIGH THAN IMPORTS, NOW THE CENTRAL BANK BUYS FOREIGN CURRENCY IN FOREIGN EXCHANGE MARKET.