36. Stock Prices of a Dividend Cycle In a discussion of stock prices of a dividend cycle, Palmon and Yaaril consider the function f given by (1 + r)l=2 ln(1 + r) u = f(t,r, z) = (1 + r)1–z – where u is the instantaneous rate of ask-price appreciation, r is an annual opportunity rate of return, z is the fraction of a dividend cycle over which a share of stock is held by a midcycle seller, and t is the effective rate of capital gains tax. They claim that ди t(1 + r)l-z In?(1 + r) [(1 + r)l–– t] Verify this. 37. Money Demand In a discussion of inventory theory of money demand, Swansonconsiders the function bᎢ , iᏟ F(b, C, T, i) + C 2 ƏF bT i and determines that + Verify this partial derivative. ac C2 2 az =-

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