Suppose that a typical urban consumer purchases a consumption bundle (CPI Basket) which includes 50 units of books, 100 units of clothes, 200 units of apples, and 300 units of pizza. The following table shows the unit price of each item in various years.

Please answer the following questions;

1. Calculate the cost of CPI basket.
2. Choose a base year
3. Calculate Consumer Price Index (CPI)
4. Calculate inflation rate.

The riskless rate for this period is 3.5%, and the covariance between returns on IBM stock and the S&P500 over this period is 0.02276.

1E. What is the variance of the S&P500 over this period?

1F. What is IBM’s CAPM beta according to this data?

1G. What is IBM’s CAPM cost of equity according to this data?

1H. If IBM’s debt to equity ratio is 0.57, what is their unlevered cost of equity according to this model?

Please show work for each.

.

b) Suppose there is a group of individuals on which you have individual-level data. Suppose, for those with wages below some level ˜w, a policy is implemented to have them work more. You have in your data hours worked, several individual characteristics, the wages, and year. The policy is implemented in the year 2000, and you have data for the year 1998 and 2002.

What type of estimation strategy would you use to determine the effect of the policy? What is it called? Write the specific regression specification you would use; make sure to explicitly indicate what you would use as control variables.

Given the following information, what is the percentage change in the price of the bonds if interest rates suddenly rise by 2%?

(Please show your work as I am attempting to work out similar problems in excel.)

(b) The USA has run continuous trade deficits since 1980.

(i) Discuss these external deficits, making sure to describe the role of national savings, investment and net exports.

(ii) Briefly describe the evolution of American foreign assets/liabilities, and discuss the sustainability of this situation. (15)

(c) During the years 2002 to 2010, the current account of the Eurozone’s Balance of International Payments was broadly in balance with the rest of the world, running either small annual surpluses or small annual deficits. However, discuss the external balances within the Eurozone during this period, and their significance as a contributor to the financial crisis between 2007 and 2014.

Assume you invest $2000 on February 1, 1993, $2000 on February 1, 1994, $2000 on February 1, 1995,   $2000 on February 1, 1996, $2000 on February 1, 1997, $2000 on February 1, 1998, $0 on February 1, 1999,  $0 on February 1, 2000, $0 on February 1, 2001,   $0 on February 1, 2002, and $0 on February 1, 2003.  What is the value of those investments on  February 1, 2003?  Assume that any money that is invested will earn an interest rate of 10%, compounded annually.

a. 15,431

b. 22,593

c. 37,062

d. 24,852

e. 49,045

.Read the quote and discuss what you think the author means by ‘passively calculating standard ratios’.

Corporations have substantial incentives to exploit the fact that accounting principles are neither fixed for all time nor so precise as to be open to only a single interpretation. Analysts, who appreciate the magnitude of the economic stakes, as well as the latitude available under the accounting rules, will see clearly that a verdict derived by passively calculating standard ratios may prove dangerously naive.

Source: Fridson, M & Fernando, A 2002, Financial statement analysis: a practitioner’s guide, 3rd edn, John Wiley & Sons, New York

The data in the table below gives sales revenue for Continental Divide Mining from 1995 to 2005.

YEAR YEARS SINCE 1990 SALES REVENUE (MILLIONS)
1995 2.6155
1998 3.3131
1999 3.9769
2000 4.5494
2001 4.8949
2002 5.1686
2003 4.9593
2005 4.7489

(a) Complete the missing column in the table.
(b) Use Excel to determine the quadratic regression model, y, that best represents sales revenue as a
function of, x, the number of years since 1990. Round three decimal places.

(a) Find the year in which there is maximum revenue and find the maximum revenue. Write solution as a
complete sentence.

Below are some data from the land of milk and honey.

YEAR       PRICE OF MILK        QUANTITY OF MILK    PRICE OF HONEY        QUANTITY OF HONEY

2001                $1                                100 Qts.                     $2                               50 qts.

2002                $1                                200                              $2                                100

2003                $2                                200                              $4                                100

1. Compute for each year the following below using 2001 as the base year.

a) nominal GDP

b) real GDP,and

c) the GDP deflator for each year, using 2001 as the base year.

2. Why do economists use real GDP rather than nominal GDP to gauge economic well being?

Sales planning primarily entails planning sales volumes, and one of the most important tasks performed by sales employees is to draw up a sales plan on the basis of their current sales, Bill McDermott became CEO of SAP America in 2002. He had spent 17 years in sales and sales management at Xerox and served as executive vice president of worldwide sales and operations at Siebel Systems. His leadership at SAP has produced overall growth of about 14 percent in a flat market.

Q1. In your opinion, how Bill McDermott create a sales Plan and set goals for SAP products?

((No copy-paste, please))