Questions
Use regression analysis to estimate the market model for Company A and Company B, and the equally weighted portfolio.

 

Use regression analysis to estimate the market model for Company A and Company B, and the equally weighted portfolio.

a. Interpret the regression slope coefficient (beta) in the context of the market model for each of the 3 assets.

b. Interpret the coefficients of determination (R2) in the context of the market model (systematic and nonsystematic risk).

The calculations can be done with Excel’s Data Analysis “Regression” function, clicking on “Line Fit Plots” in the dialogue box to see the fitted line.

      Monthly Stock Returns  
           
  Year Month S&P 500 Index A B
1 2010 January 0.02851 0.09223 0.02822
2 2010 February 0.05880 0.10163 (0.00017)
3 2010 March 0.01476 0.09005 (0.01001)
4 2010 April (0.08198) (0.10765) (0.01726)
5 2010 May (0.05388) (0.01133) (0.01810)
6 2010 June 0.06878 0.16893 0.02765
7 2010 July (0.04745) (0.06577) (0.02444)
8 2010 August 0.08755 0.20749 0.00505
9 2010 September 0.03686 0.00441 0.06815
10 2010 October (0.00229) 0.07642 (0.03929)
11 2010 November 0.06530 0.10699 0.05330
12 2010 December 0.02265 0.04067 (0.01128)
13 2011 January 0.03196 0.06098 (0.00134)
14 2011 February (0.00105) 0.08187 (0.02302)
15 2011 March 0.02850 0.04078 0.06244
16 2011 April (0.01350) (0.08331) 0.03238
17 2011 May (0.01826) 0.00627 (0.05128)
18 2011 June (0.02147) (0.06810) (0.02479)
19 2011 July (0.05679) (0.07893) 0.03559
20 2011 August (0.07176) (0.18854) (0.00786)
21 2011 September 0.10772 0.28633 0.02112
22 2011 October (0.00506) 0.03621 0.00905
23 2011 November 0.00853 (0.07440) 0.03314
24 2011 December 0.04358 0.20986 (0.04742)
25 2012 January 0.04059 0.04667 0.07256
26 2012 February 0.03133 (0.06733) (0.00607)
27 2012 March (0.00750) (0.03120) (0.04502)
28 2012 April (0.06265) (0.14734) (0.02125)
29 2012 May 0.03955 (0.03103) (0.01665)
30 2012 June 0.01260 (0.00180) 0.06276
31 2012 July 0.01976 0.01322 0.04109
32 2012 August 0.02424 0.00830 0.03241
33 2012 September (0.01979) (0.00835) 0.00640
34 2012 October 0.00285 0.00510 0.00852
35 2012 November 0.00707 0.05735 (0.02778)
36 2012 December 0.02171 0.04899 0.00913

In: Statistics and Probability

Wen-Ching is working to develop a preliminary cost-benefit analysis for a website to support the leasing...

Wen-Ching is working to develop a preliminary cost-benefit analysis for a website to support the leasing department at a major university. She developed the following estimates.
Development costs – Personnel
2 Systems Analysts       350 hours each at $80/hour
2 Agile Programmer/testers   350 hours each at $70/hour
1 Web designer           100 hours at $125/hour
1 Telecom specialist       20 hours at $150/hour
1 Database specialist       110 hours at $100/hour
Development costs – Training
2 interactive training seats    $3000/student
Development costs – Hardware and Software
1 Development Server       $2500
8 DBMS client licenses       $250/client
Annual operating costs – Personnel
1 Programmer/analyst       300 hours each at $65/hour
Annual operating costs – Hardware, software, misc.
1 maintenance agreement, server       $995
1 maintenance agreement, DBMS       $525
The benefits of the new system are expected to come from two sources: increased occupancy and ability to charge additional rent due to convenience. The benefit from occupancy is expected to total $30,000 in the first year of the system’s operation, and will grow at a rate of 10% per year. Rental increase is expected to realize $15,000 per year. Assume that personnel costs rise at 4%/year.
Following the model presented in the lecture, develop a spreadsheet that summarizes the project’s cash flow, assuming a four-year payback period after the project is developed.
Following the model presented in the lecture, compute the present value of the cash flows using an interest rate of 4%.
1.   What is the ROI?
2.   What is the break-even point?
3.   What is the NPV for this project?
4.   Should this project be approved?

In: Finance

Timpanogos Inc. is an accrual-method, calendar-year corporation. For 2020 , it reported

Timpanogos Inc. is an accrual-method, calendar-year corporation. For 2020 , it reported financial statement income after taxes of $1,342,000. Timpanogos provided the following information relating to its 2020 activities:

 

Required:

a) Reconcile book income to taxable income for Timpanogos Inc. Be sure to start with book income and identify all of the adjustments necessary to arrive at taxable income.

b) Identify each book-tax difference as either permanent or temporary.

c) Complete Schedule M-1 for Timpanogos.

d) Compute Timpanogos Inc.'s tax liability for 2020.

In: Finance

Given the following dataset x   1   1   2   3   4   5 y   0   2   4   5  ...

Given the following dataset x   1   1   2   3   4   5

y   0   2   4   5   5   3

We want to test the claim that there is a correlation between xand y. The level of cretaine phosphokinase (CPK) in blood samples measures the amount of muscle damage for athletes. At Jock State University, the level of CPK was determined for each of 25 football players and 15 soccer players before and after practice. The two groups of athletes are trained independently. The data summary is as follows :For football players : n=25 before practice  after practice   difference(before-after)

mean   254.73   225.6   29.13

St.deviation   115.5   132.6   21.00

For soccer players

n=15   before practice   after practice   difference(before-after)

mean   177.1   173.8   3.3

st.deviation   60.7   64.4   6.88

7. Construct a 95% Confidence Interval for the difference in mean CPK values for foot-ball players and soccer players BEFORE exercises.

8. Construct a 95% Confidence Interval for the difference in mean CPK values for foot-ball players BEFORE and AFTER exercises.

9. Test the claim that the mean CPK level has DECREASED for soccer players AFTERexercise (compared to the mean BEFORE exercise), using α= 0.10.

10. AFTER practice, do football players have a DIFFERENT mean CPK values com-pared to soccer players? Test this claim by performing a hypothesis test, usingα= 0.10.

In: Statistics and Probability

On January 1st 2020, B Ccompany Acquired 12,500 of the 50,000 shares (25%) of the common...

On January 1st 2020, B Ccompany Acquired 12,500 of the 50,000 shares (25%) of the common stock of C company for $30 per share. Per C company's annual report for the year ending 12/31/2020 they reported a net income of $210,000 and declared/paid total cash dividends of $100,000. C Company's stock price had a fair value of $31 per share on December 31, 2020.

After considering the impact of the above information, complete the table below assuming significant influence and no significant influence.

  

Significant Influence No Significant Influence
Investment Amount reported on the B/S 12/31/20
Impact on the Income Statement for Year ending 12/31/2020

In: Accounting

An electromagnet can be modeled as an inductor in series with a resistor. Consider a large...

An electromagnet can be modeled as an inductor in series with a resistor. Consider a large electromagnet of inductance L = 12.5 H and resistance R = 3.00 Ωconnected to a 24.0-V battery and switch as in the figure shown below. After the switch is closed, find the following.

Image for An electromagnet can be modeled as an inductor in series with a resistor. Consider a large electromagnet of in

(a) the maximum current carried by the electromagnet

(b) the time constant of the circuit

(c) the time it takes the current to reach 95.0% of its maximum value


In: Physics

Acrolein (propenal) is an important industrial compound and used as a contact herbicide. It has a...

Acrolein (propenal) is an important industrial compound and used as a contact herbicide. It has a vapour pressure of 259.8 Torr at 25.0 °C. The occupational exposure limit is 100 ppbv over 8 hours. A major spill of acrolein occurs in a closed room without ventilation at 25.0 °C and 1.00 atm. Determine the mixing ratio of acrolein in the room air (by volume) after steady state is reached.

In: Chemistry

SOS!! 16) Which of the following is a condition that must be met for the decertification...

SOS!!

16) Which of the following is a condition that must be met for the decertification of a union?

a

The union must have at least hundred members.

b

The union must have served as the official bargaining agent for the employees for at least 3 years.

c

A closed-shop agreement must have existed between the union and the employer.

d

No labor contract must currently be in force.

7)

Question 7 (2 points)

In the context of performance-appraisal methods, one of the major criticisms that had been leveled against graphic rating scales is that they were especially prone to a series of _____.

a

contrast errors

b

horns errors

c

distributional errors

d

halo errors

4)

Question 4 (2 points)

Which of the followingis an approach that attempts to emphasize for managers the fact that performance is multidimensional in nature and to teach those managers about the actual content of various performance dimensions?

a

Frame of reference training

b

The critical incident method

c

Onboarding

d

The forced-distribution method

1)

Question 1 (2 points)

One relatively new innovation in performance-appraisal methods is the use of _____.

a

the forced-distribution methods

b

career counseling

c

the graphic rating scales

d

computer monitoring

In: Operations Management

In a closed economy Y = $18 trillion, national saving = $5.5 trillion, consumption is equal...

  1. In a closed economy Y = $18 trillion, national saving = $5.5 trillion, consumption is equal to government expenditure. What is the government expenditure?
  2. Skyline Chili wants to finance the purchase of new equipment for its restaurants. The firm has limited internal funds, list two options that are available for Skyline to seek the funding.
  3. What do you mean by Kuwait government has a budget deficit for the year 2020?
  4. Using a graph explain the impact of Kuwait government introducing a tax on interest/profit income. Explain what would happen to real interest rates and the equilibrium quantity of loanable funds?
  5. Explain what would happen to standard of living in Kuwait as the Kuwait government’s decision to not to undertake any mega projects?

In: Economics

Ohio, along with many other states as well as other countries, has issued Stay-at-Home orders. Colleges...

Ohio, along with many other states as well as other countries, has issued Stay-at-Home orders. Colleges have closed campus and many may have moved back to home communities. Answer the following questions:

1) Should first responders (i.e.: Police Officers and/or Fire Fighters) get “hazard pay” during the Pandemic. If so, how much and how do you propose to finance the extra cost? If not, why not? If your community does not have a police or fire department, what impact do you think the Pandemic will have on current government operations and services of your community?

2) What impact is the COVID-19 Pandemic likely to have on the financial results of the community for 2020 and 2021?

In: Operations Management