Explain the difference between book value and market value. Give
an example of when a book value and market value are significantly
different for a (1) current asset and (2) fixed asset.
Explain the difference between correlation analysis and
regression analysis. Give an example of a lurking variable. If a
statistician computed a value of r = -2.83 what would you tell that
statistician? Under what circumstances can we calculate r? Can the
regression equation be assumed to hold 100 years from now? Are
there other correlation coefficients other than the Pearson Product
Moment Correlation Coefficient
1. Explain in words the difference between a MBS and a CDO.
2. Give one example of a use of a FRA. (Why would anybody be
interested in this derivative?)
Explain the difference between a short-run and a long-run credit
constraint. Give an example of a policy that could overcome each
type of constraint. Why is it important for financial aid policy to
distinguish between short- and long-run credit constraints?
Explain the difference between committed fixed costs and
discretionary fixed costs and give an example of each.
Why are more and more organizations in both manufacturing and
nonmanufacturing industries adopting activity-based costing
systems?