Your supervisor has asked you to evaluate the relative attractiveness of the stocks of two very similar chemical companies. Litchfield Chemical Corp. (LCC) and Aminochem Company (AOC). Both firms have a June 30 fiscal year end. You have compiled the data in Table 1 for this purpose. Use a 1-year time horizon and assume the following:

Real gross domestic product is expected to rise 5%;

S&P 500 expected total return of 20%;

U.S. Treasury bills yield 5%; and

30 year U.S. Treasury bonds yield 8%.

1. Calculate the value of the common stock of LCC and AOC using the constant growth dividend discount model. Show your work.                                

2. Calculate the expected return over the next year of the common stock of LCC and AOC using the capital asset pricing model, Show your work.                

3. Calculate the internal (implied, normalized, or sustainable) growth rate of LCC and AOC. Show your work.                                                     

4. Recommend LCC or AOC for investment. Justify your choice by using your answers to A, B, C and the information in Table 1.                                 

Given the following data of temperature (x) and the number of times a cricket chirps in a second (y), run regression analysis and state the regression equation as long as there is a statistically significant linear relationship between the variables.

Does bread lose its vitamins when stored? Small loaves of bread were prepared with flour that was fortified with fixed amounts of vitamins A (beta-carotene) and E. After baking, the vitamin A and vitamin E contents of two loaves were measured. Another four loaves were baked at the same time. Two of them were stored for three days, and two of them for seven days, before taking measurements. The measurements of the amounts of vitamins A and E in each loaf are given below (in milligrams of vitamin per hundred grams of flour). We assume that they come from normal distributions having the same standard deviations.

Condition Vitamin A Vitamin E

Immediately after baking 3.36 3.34 94.6 96.0

Three days after baking 3.26 3.16 97.4 94.3

Seven days after baking 3.01 2.92 92.3 95.1

Conduct one-way ANOVA, at  = 0.05 using SPSS with Takey’s option, for the vitamin E data [Note: the test is about vitamin E]. Follow the six steps of the P-value method adopted for SPSS. Then include additional conclusions based on Tukey’s test.

C++

Please read the question carefully and make sure that the function prototypes given are used correctly for both parts. This is one whole programming assignment so please make sure that it;s answered entirely not just one part.

The output example is provided at the end of the question.

First , write a program to create an array and fill it up with 20 randomly generated integers between 0 to 10 and output the array.

Part 1:
Write a function to implement following function prototype:
void search( int array [], int length, int key);
Precondition: Function accepts an integer array, the size of the array, and a key to search.
Post condition: Function outputs the key value and a message whether or not the key exists in the
array. If the key exists, function outputs the number of occurrence of the key in the array.

Part 2:
Write a function to sort the array in Descending order (from largest to smallest) and output the
result.
You should implement the following function prototype!!
void selectionSort( int list[], int length);

Output:

1 7 0 5 0 6 3 8 8 9

8 0 9 8 0 1 8 9 8 7

0 was found! the number of occurence is 4

50 not found!

9 9 9 8 8 8 8 8 8 7

7 6 5 3 1 1 0 0 0 0

Part II. Researchers are testing the effects of a new diet program on n = 10 healthy participants. One topic that researchers are interested in are overall attitudes towards dieting. They are interested in knowing if the new diet program will change the participants attitudes towards dieting. Participants rated their attitude about diets before and after the diet program.

1. The first thing you must do is determine which t – test you need to run. Once you have made that decision, you can proceed to answer b-d

2. Using symbols, state the null and alternative hypothesis

c) Is there significant difference between the two groups? Calculate Cohens D and report the value (this calculation will be done manually) Is the effect size that you calculated small, medium, or large?

4. Report the confidence interval from the SPSS output. Interpret the confidence interval. You may use the slides from last lecture as a reference.

d. Create a figure

For each of the following two-samples t-tests (problems 1-6): (a) Determine if a F test for the ratio of two variances is appropriate to calculate for the context. If it is appropriate, conduct the analysis and report the result. Include what statistical conclusion you should draw from the analysis (i.e., whether you should conduct a pooled-variance t-test or an unequal-variances t-test). (b) Identify the most appropriate t-test to conduct for the situation/data given. Don’t forget to consider if the context requires one/two-tail tests. (c) Provide a statistical and practical interpretation of your findings.

5. An important feature of digital cameras is battery life—the number of shots that can be taken before the battery needs to be recharged. The file Cameras contains the battery life information of 11 subcompact cameras and 7 compact cameras (Data extracted from “Cameras,” Consumer Reports, July 2012, pp. 42-44). Is there evidence of subcompact cameras have better battery life than compact cameras? (Use a 0.05 level of significance)

Question Five

1. You purchase a $1,000 bond maturing in 10 years, and pay $1,150 for the bond. The bond pays annual interest at 5%.  What is the current yield?  What is the yield to maturity?

2. Using the information in b, you sell the bond for $1,250 at the end of year 2,  what is the rate of return of the bond? Assume the payments are reinvested at a rate of 3%

Rate of return = Int + Capital Gain / Purchase Price

3. What is the market rate of interest on a 6%, $1,000 bond, 7 years, priced at $1,175?

Question Six

You are in a position where you decide to invest in bonds in the market place.  You are considering investing in the bonds of Able Corp.  Able Corp. bonds have a par value of $1,000 each and pay annual interest of 7% and mature in 25 years. Interest is paid semiannually.

1. The current annual rate of interest on bonds of similar risk in the market place is 8% annually.  This is also your required rate of return. What price should you pay for the bond?

2. Now assume that the market rate of annual interest and your required rate of return is 6%.  What price should you pay for the bond?

3. Describe two possible reasons that the market rates of a similar risk bond are different from the contractual rate of interest on the bond.

Question Seven

Musical Corporation, having recently issued a $10 million, ten-year bond issue is committed to make annual sinking fund deposits of $600,000.  The deposits are made on the last day of each year and yield a return of 10% annually.  

Will the sinking fund at the end of ten years by sufficient to retire the bonds?  If not, what will be the deficiency?

The following scores are from an independent-measures study comparing two treatment conditions. (Be sure to include your critical values)

a. Use an independent -measures t-test with a = 0.05 to determine whether there is a significant mean difference between the two treatments.

b. Use an ANOVA with a = 0.05 to determine whether there is a significant mean difference between the two treatments. You should find that F = t2.

Treatment I Treatment II