The Global Financial Crisis

12. How big is the OTC market?

13. According to McKinsey, why is our economy recovery so slowly? Who else is in trouble?

14. What does history teach us about deleveraging?

Hidden Information in insurance markets is the only explanation for high prices of insurance (in terms of their relationship with accident probabilities) even in competitive markets True or False

d) If a risk-neutral individual buys insurance for his home from a particular company we know her risk-averse neighbor will most definitely prefer to spend her money in something else True or False

State whether or not the following would be an opportunity cost of owning and working in your own business

a. Income earned from working at another occupation

b. income earned from your mutual fund (you still have it)

c. payments for meals

d. payments for property taxes on your person residence (your home)

3) Regarding Business structure

Dan Murphy is considering a change of his business structure from the sole trader to another structure commencing on the 1st of July 2019 (starting from a new financial year).
He has provided you with the following financial and other family details.

Dan is earning $150,000 (net of deductions) per annum from his engineering business. Judith earns $10,000 (net of deductions) from her teaching job.
They have the following family members living with them.

•  Robert Murphy: Dan’s father who is 70 years old. He has retired from his job as chief executive officer of Suncorp Ltd on the 15th of July 2019 (gross income was $2,000) and has not been earning any income since retirement. Judith takes care of him as his health has deteriorated recently.

•  Jean Murphy: 19-year-old son. He is a full time university student, currently no income.

•  Xavier Murphy: 15-year-old son, full time high school student

•  Megan Murphy: 2-year-old daughter.

  Dan is considering the following options.

•  Remaining Sole trader stucture

•  Partnership with Judith in equal profit sharing ratio

•  Australian registered private company

•  Discretionary Family Trust

  Required

  Please advise which business structure would you recommend in order to minimise tax on the client’s income.
  Comment on the tax implications of each business option considered.

T F 10. The statistical concept of parsimony tells us to add more X variables to our regression equation in order to maximize prediction accuracy.

______11. We are predicting salary based on GPA and generate this regression equation; y = .432 + 6.38(x). A student in our study with a GPA of 3.36 earned $17,941. The residual (rounded to nearest dollar) for this student would be:

A.   $941                 C.   $3,929

B.   $2,144               D.   not enough information to calculate.

T F 12. The Salsberry Realty multiple regression equation tells us that cost to heat the home goes down by $14.831 for each additional inch of insulation added.

T F 13. The closer the x y coordinates are to a straight line the stronger the strength of the relationship between x and y.

T F 14. Attempts to predict y values outside the relevant range of the x variables being considered is called interpolation and is risky.

4. University of Notre Dame is a premier institution that draws students from all over the world to its campus. Although it is privately funded, it aspires to world-class quality and reputation, which are enhanced when out-of-state residents enroll. Data suggest that in-state enrollment can be described by the equation:

Q_I = 25,000 - P_I,

where Q_I = in-state enrollment and P_I = in-state tuition. Out-of-state enrollment is given

by:                                           Q_N = 13,500 - .5P_N.

1. If tuition for in-state students is $14,000 and for out-of-state students is $19,000, what is total enrollment and demand elasticity for each type of student?
2. Suppose that the marginal cost to the university of an additional student is $7,000. Is Major University maximizing profit at its current tuition charges? Explain.  
3. Because of major funding cuts, the university is expecting to reduce its total enrollment to 11,000 students next year. The university is free to set any tuition charges it wishes. If the goal is to maximize total tuition revenue, what should in-state tuition, out-of-state tuition, and respective enrollments be? Explain why

Introduction to law and Science

You and a friend from University have an idea for a new invention. In order to develop your idea into a commercially viable product, you have decided to go into business together. Compare an unincorporated partnership and an incorporated private limited company (Ltd). Specify which format you would choose, setting out arguments in favour of your choice.

You may use whichever referencing style you prefer, just ensure that you are consistent throughout your answer.

Your essay should be no more than 3,000 words long.

Explain the spillover benefits that are purported to flow from the athletic department to the university. What does empirical research indicate about these spillover benefits?

Farid and Ah Fong graduated from a university in 2020 with a qualification in Bachelor of Business and Commerce. They decided to form a business offering advice to clients who wish to grow their businesses on a large scale. Fatimah who is a novice businesswoman is looking for a successful business partner in order to grow her business. She met a businessman by the name Felix but she is unsure of his financial credibility. She approached Farid and Ah Fong for consultation and advice as she came across their advertisement in the social media. Farid and Ah Fong did thorough business research and recommended to Fatimah to proceed to have a business dealing with Felix as a business partner. Fatimah approached Felix and entered into a multi-million-dollar project. After a few months, Fatimah discovered that Felix is a financially troubled businessman. Fatimah is very upset. She approached Farid and Ah Fong for a clarification. However, Farid and Ah Fong claimed that they have conducted thorough research on Felix’s financial standing. However, it has now transpired that Farid and Ah Fong did not look at the financial standing of Felix for the year 2018 but only looked at the financial standing for the year 2019. They claimed that there is no need to check the financial standing for the last two years. They also claimed that since they just graduated, they do not have much experience. Fatimah seeks your advice as to her rights against Farid and Ah Fong