Critically analyzing China’s monetary policy between 1995 and 2005. Provide any websites, textbooks, etc. if used to obtain information.

Background

With capital controls, think of China as a closed economy; without capital controls, think of China as a small open economy. Remember the relation between net exports and net capital flows. Try to reason as a business person and answer to the best of your abilities.

Briefly research China’s exchange rate regime between 1995 and 2005. (Please note that after 2005, China’s exchange regime has changed, and became more flexible, with an abrupt acceleration in the degree of flexibility in 2015, even though there continues to be debate about its rigidity and fairness to foreign economies, so stay focused on this period that is simpler to analyze.

1. Describe how China’s exchange rate regime operated over this period and locate China’s exchange rate regime on the “Impossible Trinity Triangle”.
2. For each of the following objectives, evaluate whether the regime was effective or not, and why:

• Maintaining low inflation.
• Providing monetary policy independence (as measured by …).
• Promoting competitiveness of Chinese exports.

When considering labeling someone with a disorder it is important that we use the most up to date information. We need to stay current on diagnostic criteria, disorders, research methods, and treatment options that are available. While clinicians agree that we should stay current on research many do not take the time to read the research findings. According to Comer (2005) there are task forces that have been formed to help in this area as a way to consolidate the research to “identify which therapies have received clear research support for each disorder, to propose corresponding treatment guidelines, and to spread such information to clinicians.” (p.89)    

However, there are critics of the task force movement that feel that the efforts are not far reaching enough and may be biased or misleading. (Comer, 2005)

With clinicians being very busy and research noting that they gain information about the latest developments in the field from colleagues, professional newsletters, workshops, conferences, and books (Comer, 2005) what would you recommend to consolidate the research so that more clinicians will review the data and implement the information into their current practice?

The owner of a specialty coffee shop wants to study coffee purchasing habits of customers at her shop. She selects a random sample of 60 customers during a certain week. Data are available in the worksheet labeled “Problem 2” in the spreadsheet Final_SU2020_Data_Sets.xlsx. 1. At the ? = 0.1 level of significance, is there evidence that more than 50% of the customers say they “definitely will” recommend the specialty coffee shop to family and friends? 2. Construct a 90% confidence interval on the proportion of customers who say they “definitely will” recommend the specialty coffee shop to family and friends.

Note: Y is an indicator variable, i.e., if Y=1, then customer said they "definitely would" recommend specialty shop to family and friends, and Y=0 otherwise.

The owner of a specialty coffee shop wants to study coffee purchasing habits of customers at her shop. She selects a random sample of 60 customers during a certain week. Data are available in the worksheet labeled “Problem 2”.

1. At the a = 0.1 level of significance, is there evidence that more than 50% of the customers say they “definitely will” recommend the specialty coffee shop to family and friends?

2. Construct a 90% confidence interval on the proportion of customers who say they “definitely will” recommend the specialty coffee shop to family and friends.

Problem 2 Data Set

Quiz Company sells its product for $10 per unit. Variable costs are $6 per unit and fixed costs are $15,000 per week. During the third week of July, Quiz Company sold 5,000 units.

1. Determine the number of units Quiz Company must sell to earn operating income of $8,000.

2. Determine the sales revenue (in dollars) Quiz Company must generate to break even.

3. Determine the sales revenue (in dollars) Quiz Company must generate to earn operating income of $8,000.

4. Determine the margin of safety in units for the week.

5. Determine the margin of safety in dollars for the week.

6. Suppose Quiz Company increased spending for advertising by $2,500 per week. As a result, sales in the fourth week increased by $5,000 compared to the third (current) week.

Determine the operating income earned in the fourth week.

Note: Give your answer using dollar signs and commas but no decimal points (cents).

Example: $12,345

1. An asset turnover ratio of 1.87 for a company indicates that:

a.the company has $1.87 of long-term debt for each dollar of operating revenue earned.

b.the company is generating $1.87 of sales revenue for each dollar of long-term operating assets invested.

c.the company is generating $1.87 of net income for each dollar of retained earnings.

d.the company has $1.87 of current assets for each dollar of fixed assets invested.

2. The following information is available for Amanda Co. for the current year.

Calculate the company's earnings per share.

a.$2.60

b.$1.40

c.$1.10

d.$2.00

3. On July 1, George Co. issued $3,000,000 of 10-year, 8% bonds at par. Interest on the bonds is payable semiannually on December 31 and June 30. As a result of this transaction, net assets of the company:

a.is not effected.

b.decrease by $120,000.

c.increase by $3,000,000.

d.decrease by $240,000.

The a2 Milk Company (ATM) wants to hedge against the foreign exchange (FX) risk of its sales revenue in Chinese Yuan Renminbi (CNY) as the majority of its operating expenses are denominated in New Zealand Dollar (NZD). The company expects to receive 30 million in CNY in exactly 6 months.

Required:

1. Suppose that ATM has decided to use a “money market hedge”, i.e., to transform its future CNY revenue into NZD by trading in the spot CNY/NZD market as well as borrowing/lending NZD and CNY. Using the information provided below, determine the equivalent NZD amount of the company’s revenue (of 30 million CNY) that it will receive in 6 months, after the company employs the money market hedge. Discuss the procedures that the company should take so as to obtain the NZD-equivalence revenue. Express your answer in thousands with 3 dps.

Note: the interest is compounded semi-annually.

2. Now suppose that a local bank offers ATM the following six-month CNY/NZD FX rates: 4.5313/4.5649 (bid/ask). Should the company conduct a “forward hedge”, i.e., enter a forward contract with the bank, or go for the “money market hedge” as in part (a)? Support your answer with numerical calculations. Ignore all transaction costs other than the bid/ask spreads of FX and interest rates.

The following events pertain to Link's Surf Shop for October 2012. The company uses PERPETUAL INVENTORY METHOD.

Record the following transactions in horizontal statements model.

Oct. 2 Purchased $22,000 of merchandise on account with the terms 2/10, n/30

Oct. 3 Sold merchandise that cost $10,000 for $18,000 to customers on account with the terms 1/10, n/30.

Oct. 4 Returned $2,000 of defective merchandise from the Oct. 2 purchase.

Oct.10 Paid the amount due on the merchandise purchased on Oct. 2.

Oct.12 Received cash from customers in settlement of the Oct. 3 sale.

You have deposited $30,000 in a brokerage account with an initial margin of 60%. The broker charges a spread of .5 percent and the call money rate is 5.5%. If IBM shares are currently traded at $50, how many shares of IBM can you purchase? A year later, IBM shares are being traded at $60 and you sell your IBM stocks. Calculate your rate of return. What would have been your rate of return if you had purchased IBM using a cash account instead? What would have been your rate of return if , a year later, IBM stock were being traded at $40 per share- with and without a margin loan? What would you conclude? (assume IBM did not pay any dividends)

[The following information applies to the questions displayed below.] The following information pertains to Baxter Company for 2014. Beginning inventory 70 units @ $15 Units purchased 310 units @ $18 Ending inventory consisted of 27 units. Baxter sold 353 units at $34 each. All purchases and sales were made with cash. 5. value: 0.40 points Required information Required a. Compute the gross margin for Baxter Company using the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. (Round "Cost per unit" to 2 decimal places and final answers to