Stocks A and B have the following returns in each of the states given below.

The probability of the boom is 0.5, the probability of the normal economy is 0.3 and the probability of the recession is 0.2.
(a) Calculate the variance of the returns of A and the variance of the returns of B
(b) What is the covariance between the returns of A and B?

(c) What is the standard deviation of a portfolio of A and B with equal amounts invested in both?

On 1 June2020, Purchase Limited enters into a firm commitment Supply Limited to buy USD 100,000 of
inventory. On 1 July 2020, the Purchase Limited enters into a hedging arrangement which meets the hedge
accounting criteria stipulated by the accounting standards (Australian Accounting Standards Board (AASB) 9).
Purchase Limited has designated the firm commitment hedging arrangement as a fair value hedge. On 1 August
2020, Supply Limited transfers the inventory to Purchase Limited, and on that date, the Purchase Limited makes
the payment. The spot and forward rates are as follows.

Required:
a) Explain at least two determinants of determining an effectiveness of a hedge instrument against a
hedge
5 Marks
b) Provide journal entries to account for the hedged item (firm commitment to buy inventory) 8 Marks
i. On 1 June 2020
ii. On 30 June 2020
iii. On 1 August 2020
c) Provide journal entries to account for the hedge instrument (forward contract) 7 Marks
i. On 1 June 2020
ii. On 30 June 2020
iii. On 1 August 2020

Suppose an economy has three states: boom, normal, and recession. Assume that the probability of a boom state is 0.2, a normal state is 0.5, and a recession state is 0.3. And there are three stocks in this economy, called Alpha, Beta, and Gamma respectively. The return performance of these stocks has been summarized by the following table:

(Please show your intermediate processes, instead of just a final number for your answers. Only round your final answers to two decimal places.)

(a) What is the expected return of Stock Alpha?

(b) What is the variance of Stock Beta?

(c) What is the standard deviation of Stock Gamma?

(d) Suppose you build a portfolio by including these three stocks. The weight of Stock Alpha in your portfolio is 0.2, the weight of Stock Beta is 0.3, and the weight of Stock Gamma is 0.5. What are the expected return, variance, and standard deviation of your portfolio?

(e) Based on what you observe from the calculations and what you learned from the class, could you specify what are the characteristics of portfolios?

that's all I have. can you please check. i don't know any correlation

Investment advisors estimated the stock market returns for four market segments: computers, financial, manufacturing, and pharmaceuticals. Annual return projections vary depending on whether the general economic conditions are improving, stable, or declining. The anticipated annual return percentages for each market segment under each economic condition are as follows:

QUESTION 8

For a monopolist:

QUESTION 9

An example of price discrimination is the price charged for:

QUESTION 10

There is only one gas station within hundreds of miles. The owner finds that if she charges $3 a gallon, she sells 199 gallons a day, and if she charges $2.99 a gallon, she sells 200 gallons a day. The marginal revenue of the 200th gallon of gas is:

QUESTION 11

At the long-run equilibrium level of output, the monopolist's marginal cost will:

QUESTION 12

A monopolist will earn economic profits as long as his price exceeds:

QUESTION 13

A monopolist will maximize its profit by:

QUESTION 14

Both a perfectly competitive firm and a monopolist:

QUESTION 15

Without government regulation, the market outcome of monopoly:

Developing an Equation from Average Costs
Paradise Pub is a high-end dog hotel located in New York. Assume that in March, when dog-days occupancy was at an annual low of 500 days, the average cost per dog-day was $26. In July, when dog-days were at a capacity level of 4,500, the average cost per dog-day was $10.

(a) Develop an equation for monthly operating costs. (Let X = dog-days per month)
Total cost = $Answer

+ $Answer

* X

(b) Determine the average cost per dog-day at an annual volume of 28,000 dog-days. (Round to the nearest cent.)
$Answer

High-Low Cost Estimation
Assume the local YRC Worldwilde delivery service hub has the following information available about fleet miles and operating costs:

Use the high-low method to develop a cost-estimating equation for total annual operating costs. (Let X = annual fleet miles.)

Total annual costs = Answer

+ Answer * X

Automatic versus Manual Processing
Image Solutions operates a printing service for customers with digital cameras. The current service, which requires employees to download photos from customer cameras, has monthly operating costs of $7,000 plus $0.30 per photo printed. Management is evaluating the desirability of acquiring a machine that will allow customers to download and make prints without employee assistance. If the machine is acquired, the monthly fixed costs will increase to $13,000 and the variable costs of printing a photo will decline to $0.05 per photo.

(a) Determine the total costs of printing 20,000 and 50,000 photos per month.

(b) Determine the monthly volume at which the proposed process becomes preferable to the current process.
Answer units

Unit- and Batch-Level Cost Drivers
KC, a fast-food restaurant, serves fried chicken, fried fish, and french fries. The managers have estimated the costs of a batch of fried chicken for KC's all-you-can-eat Friday Fried Fiesta. Each batch must be 50 pieces. The chicken is precut by the chain headquarters and sent to the stores in 10-piece bags. Each bag costs $4. Preparing a batch of 50 pieces of chicken with KC's special coating takes one employee two hours. The current wage rate is $9 per hour. Another cost driver is the cost of putting fresh oil into the fryers. New oil, costing $6.50, is used for each batch.

Round answers to two decimal places, when applicable.

(a) Determine the cost of preparing one batch of 50 pieces.
$Answer

(b) If management projects that it will sell 150pieces of fried chicken, determine the total batch and unit costs.
Batch cost $Answer

Unit cost $Answer

(c) If management estimates the sales to be 350 pieces, determine the total costs.
$Answer

(d) How much will the batch costs increase if the government raises the minimum wage to $10 per hour?
$Answer

(e) If management decided to increase the number of pieces in a batch to 100, determine the cost of preparing 350 pieces. Assume that the batch would take twice as long to prepare, and management wants to replace the oil after 100 pieces are cooked.
$Answer

A movie theater faces the following demand curves: Seniors: Ps = 27-Q Adults: Pa = 33 - Q The theater has a fixed cost of 50, and a constant marginal cost of 1 per ticket. a) If the movie theater uses segmenting, calculate the ticket prices charged to adults and seniors. b) How much profit does the movie theater earn from segmenting? c) Illustrate the profit maximizing choices on both inverse demand functions along with CS and profit. d) Suppose the theater is legally prevented from using price discrimination. Calculate and illustrate the aggregate inverse demand. What price will they charge per ticket? How much profit will they earn? e) Find the total consumer surplus without price discrimination and illustrate it on the aggregate inverse demand. Under which scenario are the consumers better off?

Question 1

If the theoretical value of a quantity is 3.142, and the calculated value is 3.146, what is the percent error? (closest value)

Group of answer choices

0.1 %

0.2%

0.3%

Question 2

In an experiment to measure the value of pi, the following results are obtained for pi:

3.14                    3.13                 3.24                 3.06                 3.02                                        

If the correct value is 3.14159, calculate the Percent Error (closest value)

Group of answer choices

0.3%

0.7%

1 %

2%

Question 3

What determines the number of significant figures used in reporting measured values?

Group of answer choices

The accuracy of the calculations

The accuracy of the equipment

Question 4

Calculate, to the correct number of significant figures:

21.414 + 15.231 + 17.24 + 5.01

Group of answer choices

58.90

58.9

58.895

58.89

Question 5

If the time period for a certain pendulum while standing in the Lab. on Earth is T second, will the time period be longer or shorter if It is taken to the Moon:

Group of answer choices

Longer

Shorter

Question 6

If the time period for a certain pendulum while standing in the Lab. on Earth is T second, will the time period be longer or shorter if it is taken to the planet Jupiter

Group of answer choices

Longer

Shorter

Question 7

If the time period for a certain pendulum while standing in the Lab. on Earth is T second, will the time period be longer or shorter if it is in an elevator that is accelerating upwards

Group of answer choices

Longer

Shorter

Question 8

For a vertically oscillating spring-mass system, should the time period depend on the amplitude of oscillation?

Group of answer choices

Yes

No

Question 9

What error can you expect if you use the stopwatch to measure the time for only 10 oscillations instead of 50 as mentioned in the manual?

Group of answer choices

The time period becomes smaller

Time period remains same, but the error in its measurement increases.

The time period remains same, and the error in its measurement decreases.

The time period becomes longer

(a) The Marino Company in Ventura County, southern California sells swimming pool equipment. The sales for swimming pool motors in southern California over the last 12 months is given in Table Q4(a). Forecast the demand from March to December of the current year using the following forecasting models. Use excel for the tabulation.
(i) Three-month simple moving average;
(ii)Three-month weighted moving average. Use 0.7, 0.2, and 0.1 for the weights, with
0.7 for the most recent period, and 0.1 for the oldest period.   
(iii) Simple linear regression;
(iv) Determine the MAD, and SE for all the models, and choose which model is most appropriate.