Discussion Post: Economic exposure of firms (Foreign firms)

Many MNCs based outside of the US have suffered from the decrease in value of the USD relative to other currencies. Search the internet for examples of this. Report the company, what the effect was, if the company reacted (or plans to react) to reduce/eliminate their exposure to USD.

Don’t forget to include your source.

Let x represent the dollar amount spent on supermarket impulse buying in a 10-minute (unplanned) shopping interval. Based on a certain article, the mean of the x distribution is about $31 and the estimated standard deviation is about $9.

1. Consider a random sample of n = 80 customers, each of whom has 10 minutes of unplanned shopping time in a supermarket. From the central limit theorem, what can you say about the probability distribution of x, the average amount spent by these customers due to impulse buying? What are the mean and standard deviation of the x distribution?

a) The sampling distribution of x is approximately normal with mean μ_x = 31 and standard error σ_x = $1.01

b) The sampling distribution of x is approximately normal with mean μ_x = 31 and standard error σ_x = $9.

c) The sampling distribution of x is approximately normal with mean μ_x = 31 and standard error σ_x = $0.11.

d) The sampling distribution of x is not normal.

2. Is it necessary to make any assumption about the x distribution? Explain your answer.

a) It is not necessary to make any assumption about the x distribution because n is large.

b) It is not necessary to make any assumption about the x distribution because μ is large.     

c) It is necessary to assume that x has an approximately normal distribution.

d) It is necessary to assume that x has a large distribution.

3. What is the probability that x is between $29 and $33? (Round your answer to four decimal places.)

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4. Let us assume that x has a distribution that is approximately normal. What is the probability that x is between $29 and $33? (Round your answer to four decimal places.)

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5. In part (3), we used x, the average amount spent, computed for 80 customers. In part (4), we used x, the amount spent by only one customer. The answers to parts (2) and (4) are very different. Why would this happen?

a) The mean is larger for the x distribution than it is for the x distribution.

b) The x distribution is approximately normal while the x distribution is not normal.     

c) The sample size is smaller for the x distribution than it is for the x distribution.

d) The standard deviation is larger for the x distribution than it is for the x distribution.

e) The standard deviation is smaller for the x distribution than it is for the x distribution.

6. In this example, x is a much more predictable or reliable statistic than x. Consider that almost all marketing strategies and sales pitches are designed for the average customer and not the individual customer. How does the central limit theorem tell us that the average customer is much more predictable than the individual customer?

a) The central limit theorem tells us that small sample sizes have small standard deviations on average. Thus, the average customer is more predictable than the individual customer.

b) The central limit theorem tells us that the standard deviation of the sample mean is much smaller than the population standard deviation. Thus, the average customer is more predictable than the individual customer.    

According to the record of the registrar's office at a state university, 40% of the students are freshmen, 30% are sophomores, 20% are juniors, and the rest are seniors. Among the freshmen, sophomores, juniors, and seniors, the portion of students who live in the dormitory are, respectively, 75%, 50%, 35%, and 15%.

If a randomly selected student does not live in the dormitory, what is the probability that the student is a freshman?

The future value of an ordinary annuity is higher if the discount rate is higher.

True

False

The statement of shareholders' equity reports the effects from the recognition or valuation of certain asset or liability transactions that change Accumulated Other Comprehensive Income.

True

False

Equity of a wholly-owned company is comprised only of contributed capital and earned capital.

True

False

Please write a minimum of 150 words each

6. When is revenue earned and therefore should be recognized?

7. When a company pays $10,000 for insurance that will cover it for two years, the transaction is not immediately recognized as an expense. Explain why.

8. Distinguish between cash flows resulting from operating activities, financing activities, and investing activities.

Suppose that you put $3,000 per year in a Roth IRA (Individual Retirement Account) at the end of each year. You plan to leave these contributions and any interest and dividends earned in the account (and will reinvest in the bonds and stocks that you hold in this IRA). Suppose that your investments earn 6.6% per year, compounded annually. What will your Roth account balance be at the end of 36 years? Do not round at intermediate steps in your calculation. Round your final answer to the nearest dollar. Do not type the $ symbol.

Suppose that a typical individual works 2.5% fewer hours when the wage increases by 10%. In this case, labor supply elasticity equals:

The Earned Income Tax Credit is a federal program that

Excercise 1 （2excercise are related）

Each individual consumer takes the prices as given and chooses her consumption bundle,(x1,x2)ER^2, by maximizing the utility function: U(x1,x2) = ln(x1^3,x2^3), subject to the budget constraint p1*x1+p2*x2 = 1000

a) write out the Lagrangian function for the consumer's problem

b) write out the system of first-order conditions for the consumer's problem

c) solve the system of first-order conditions to find the optimal values of x1, x2. your answer might depend on p1 and p2.

d) check if the critical point satisfies the second-order condition

Exercise 2

a) suppose price of good 1 is 2, p1 = 2, and p2 = 1, use the results from exercise 1, part (c) to answer: How many units of good 1 and good 2 does an individual consumer demand?

b)still assume p1 = 2 and p2 = 1. what is the aggregate demand of good 1? what is the aggregate demand of good 2? how many units of good 1 (good 2, respectively) do all 1000 consumers demand together? (sum up all the individual demands from previous part (a))

c) the aggregate demand function of a good takes the market prices as an argument and maps them into the total units that are demanded. For given prices that the aggregate demand function of a good tell us how many units of that good are demanded by all 1000 consumers together. Use your results from Excercise 1, part (c) to derive that aggregate demand function for each good.