CASE STUDY 1: Lloyds Banking Group Monetary Policy Committee
You are a voting member of Lloyds Banking Group Monetary Policy Committee (MPC) and are expected to make a policy decision at the next MPC meeting in January 2021. The current Repo rate is 4.25% and the allowable inflation target ranges between 3% to 5%. The Research department has presented the following global and domestic market update for your consideration.
Key extracts of the presentation are summarized below:
Extract 1: Global update
According to the IMF’s World Economic Outlook (WEO) for October 2020, the global economy is expected to recover substantially in 2021 following the negative effects of COVID-19. The impact of COVID-19 outbreak has lessened significantly since the first cases were made public at the beginning of the year 2020. To curb the spread of the pandemic, governments worldwide imposed severe restrictions and lockdown measures, subsequently bringing economic activities to a virtual standstill in the process. According to the latest WEO, the global economy is now projected to recover and grow by 3.8 percent in 2021, which is an upward revision from a 2.3 percent growth published in the WEO update for January 2021. The upward revision is on the back of successful easing of lockdown restrictions and resumption of economic activities in both advanced and emerging market economies. The global output is then projected to expand by 5.8 percent in 2021.
Extract 2: Emerging market update
Emerging market and developing economies (EMDEs) improved moderately in the second half of 2020 and are expected to recover strongly in 2021. Overall, EMDEs are projected to grow by 2.0 percent in 2020, before recovering to a strong growth of 6.6 percent in 2021. Going forward EMDEs are expected to experience a sharp recovery in 2021 once the adverse effects from this economic shock subside.
Extract 3: Domestic market update
1.   Domestic growth remained positive during the last quarter of 2020, supported by construction, wholesale and retail trade, as well as the communication sectors. In contrast, activities such as livestock farming and uranium mining performed weakly.
2.   Going forward, the domestic economy is forecasted to improve in the remainder of 2021, also supported by construction activities, as well as strong growth in demand. Declining international commodity prices remain a concern, as it may negatively affect mineral production.
3.   Inflation has shown an upward trend for the past five months. Annual inflation rose from 4.9 percent in June 2020 to 6.1 percent in January 2021, mainly due to increases in food and transport prices. As a result, this recent trend of inflation is expected to average around 7 percent for the year.
4.   The annual growth rate in domestic private sector credit increased steadily to 17.8 percent in December 2020, compared to 14.3 percent in December 2019. Growth in private sector credit resulted from higher demand by both individuals and businesses. The rise in household debt largely reflected strong growth in unproductive instalment credit and overdraft loans which remains a concern for the MPC.
5.   During the last quarter of 2020, the trade deficit increased significantly. A rapid growth in imports of vehicles, partly financed by instalment credit, remains a concern. The total number of vehicles sold during the last four months of 2020 increased by more than 50 percent, compared to the same period in 2019. The value of imported vehicles amounted to N$2.2 billion, which is a significant amount in relation to the total import bill of goods of N$15.9 billion. Unproductive imports have put pressure on international reserves of the country and require monitoring.

Extract 4: Key domestic sector updates
Construction Sector update:
The contraction in the construction sector is expected to deepen during 2020 as projects anticipated to kickstart earlier are likely to be delayed. The construction sector is expected to contract by 16.3 percent and 1.5 percent in 2020 and 2021, respectively. The deeper contraction for 2020 is based on expectations that some of major projects, which were expected to commence in 2020 are likely to be delayed, mainly due to COVID-19 induced travel restrictions. This assertion is supported by the recent directive by the Minister of Finance to SOEs and Government Ministry to suspend capital projects until further notice.
Uranium Sector update
Uranium mining is similarly projected to contract during 2020, followed by a mild recovery in 2021. The uranium mining sector is expected to contract by 22.4 percent in 2020, before expanding by 4.6 percent in 2021. The sector is first and foremost grappling existing factors that include insufficient supply of water required for their operations and persistently low uranium prices, viewed together with the reduction in long-term supply contracts. This means that uranium mines are more exposed to spot prices, which squeezes their margins. There is, however, an indication that COVID-19 and resulting travel restriction have not prevented the mines from exporting their output thus far and it may not constitute a major factor in the foreseeable future. The volumes produced during the first three months of 2020, were 26.4 percent lower than the production for the corresponding three months of 2019, making any prospects to catch up with 2019 production levels unlikely.

CASE STUDY 1 QUESTIONS
1.   Based on Extracts 1-3 in the case facts presented above, Recommend the monetary policy stance and decision that Lloyds Banking Group should take and Justify your recommendation with three (3) reasons found in Case study 1 above

Justification should include specific facts related to the case study!!!

2.   Based on Extract 4 above, Identify one reason for the expected contraction in the construction sector and two reasons for expected contraction in the Uranium sector

Question 3

Brown and James are the sole members in Tendesius cc, a business enterprise which organizes fun and walks. They have an equal share in the profits and loses and they each contributed N$2 500 to start the corporation in 2015. On 1 March 2018, fun and walks (Pty) Limited made an offer to take over Tendesius cc. At that date the members loan was payable to James. Brown did not want to take up the offer so he asked to be paid out.

The financial statement of Tendesius cc at 28 February was as follows :
Land and building at cost N$12500 motor vehicle at costN$5000 depreciation N$2000 carrying amount N$3000 inventory N$22500
Account payable N$7500
Bank 9000
Total assets N$54 500
Members funds N$35 000
Members contributions 5000
Undrawn profits 30000, members loan 15000,
Account payable 4500, total equity and liabilities 54 500
Fun and walks (Pty) Limited offered to pay Tendesius cc N$100 000 to take over the business as going concern. The payment was structured as follows :
N$42500 in cash to brown for his share of business. N$ 42500 by a fresh issue of ordinary share Fun and walks (Pty) Limited at N$1 each to pay James for his share of the business. N$15000 by an issue of debentures of N$100 each in Fun and walks (Pty) Limited to repay the members loan to James in the cc.
The land and building taken over were considered to be worth N$37500.
The statement of financial position ofFun and walks (Pty) Limited at 28 February 2018 was as follows : Land and building N$100 000, motor vehicles at cost N$40 000 depreciation 15000 carrying amount 25000
Inventory 1500,account payable 25000, bank 60000. Total assets N$225000
Capital and reserves N$140000,ordinary share capital N$100 00, accumulated profit N$40000, 10% debentures N$50 000 shareholders loan N$20 000, account payable N$15 000. Total equity and liabilities N$225000.
Prepare the journal entries of Fun and walks (Pty) Limited to record the takeover of Tendesius cc.
Prepare a statement of financial position of Fun and walks (Pty) Limited as at 01 March 2018.

The following information is available for Bugsy Corporation:

January 1, 2018      Shares outstanding                                             2,000,000

March 1, 2018        Shares issued                                                   570,000

April 1, 2018              Treasury shares purchased                                  100,000

September 1, 2018       Shares issued                                                       300,000

The number of shares to be used in computing earnings per common share (WASO) for 2018 is

Select one:

2,500,000 shares

2,269,167 shares

2,583,333 shares

2,294,167 shares

1. In the following model, “white” is a dummy indicating a person is a white:

wage=β0+β1edu+β2white+u

If you run this model, the regression will produce two regression lines, one for white and the other for non-white.

If you run the regression without the dummy wage=β0+β1edu+u separately for white and for non-white (for example, if there are 1000 people; 500 of them are white and 500 are non-white; run the regression of wage on edu for the 500 white and then run it for the 500 non-white), you will also get two regression lines, one for white and the other for non-white. Are the two ways of getting wage differential essentially the same? Say “yes” or ‘no”, then explain. (10pts)

On January 2, 2018 you started a business corporation named Ace Corporation. Business is slow, so you only have a few transactions during the year, and it appears you will make very little profit. Given the attached chart of Accounts and other worksheets you are required to enter the journal entries to record the transactions and post them to the ledger as they occur. At the end of the calendar year you will need to prepare a trial balance. You will also enter the adjusting journal entries, post the adjusting journal entries to the ledger and complete the adjusted trial balance. Next prepare the income statement for year ending December 31, 2018. Prepare the statement of stockholders' equity for year ending December 31, 2018. Enter the closing Journal entries and Post them to the ledger.

Requirement 1

Prepare the journal entries for the following transactions and post each journal entry to the ledger.

1. On January 2, 2018 Ace Corporation receives $300,000 cash from the stockholders and in turn issued common stock to them.

2. On January 2, 2018 Ace prepaid $39,000 cash to rent office space for 3 years.

3. On January 2, 2018 to furnish the office Ace purchased office furniture and equipment for $17,000 cash.

4. On February 1, 2018 Ace purchased inventory for $20,000 cash to sale to its customers.

5. On April 15, 2018 Ace recorded cash sales of $13,800.

6. On July 1, 2018 Ace obtains a 1-year loan from a local bank for $50,000. The bank is charging Ace interest at an annual percentage rate of 8%. Interest is payable January 1, 2019 and July 1, 2019.

7. On August 15, 2018 Ace recorded sales on account of $16,000.

8. On September 30, 2018 Ace received $8,000 cash for part of the sales on account recorded on August 15, 2018.

9. On November 15, 2018 Ace purchased $15,000 of inventory on account.

10. On December 1, 2018 Ace recorded cash sales of $17,500.

11. On December 10, 2018 Ace paid $14,000 cash for the $15,000 purchase of inventory on account on November 15, 2018.

12. On December 15, 2018 Ace paid $2,800 for a utility bill.

A firm reports sales of €50,000,000 for the year ended December 31, 2018. Its accounts receivable balances were €6,000,000 at January 1, 2018 and €7,500,000 at December 31, 2018. The company’s cash collections from sales (€) for 2018 is closest to:

a) 51,500,000 b)42,500,000 c)48,500,000

1. List the owner's name of all male customers in the bank who have a ’Checking’ account.
2. Find all accounts associated with ’Alexander Felix’.
3. For each account of the previous question, compute the Balance, and return a table that shows the account number, type, and balance for each account (hint: use UNION).
4. The list of customer names that have transactions greater than or equal to one thousand dollars.

Bank.sql is under this statement.

DROP DATABASE IF EXISTS Bank;
CREATE DATABASE Bank;
USE Bank;

DROP TABLE IF EXISTS transaction;
DROP TABLE IF EXISTS customer;
DROP TABLE IF EXISTS account;

CREATE TABLE customer (
name VARCHAR(20),
sex CHAR(1),
ssn CHAR(9) NOT NULL,
phone CHAR(15),
dob DATE,
address VARCHAR(50),
PRIMARY KEY(ssn)

);
  
CREATE TABLE account (
number CHAR(16) UNIQUE NOT NULL,
open_date DATE,
type CHAR(20),
owner_ssn CHAR(9) NOT NULL,
PRIMARY KEY(number)
);
  
CREATE TABLE transaction (
id INT(20) UNIQUE NOT NULL,
amount DECIMAL(9,2),
tdate DATE,
type CHAR(10),
account_num CHAR(16),
PRIMARY KEY(id)
);

INSERT INTO customer VALUE ('John Adam', 'M', '512432341', '(438) 321-2553', '1987-11-15',NULL);
INSERT INTO customer VALUE ('Alexander Felix', 'M', '724432341', '(541) 321-8553', '1991-05-22', NULL);
INSERT INTO customer VALUE ('Andrew William', 'M', '861894272', '(308) 692-1110', '1995-01-04', NULL);
INSERT INTO customer VALUE ('Ana Bert', 'F', '844192241', '(203) 932-7000', '1982-12-07', '23 Boston Post Rd, West Haven, CT 06516');

INSERT INTO account VALUE ('1111222233331441', '2018-12-03', 'Checking', '861894272');
INSERT INTO account VALUE ('2111222233332442', '2019-01-06', 'Saving', '512432341');
INSERT INTO account VALUE ('3111222233333443', '2017-09-22', 'Checking', '844192241');
INSERT INTO account VALUE ('4111222233335444', '2016-04-11', 'Checking', '724432341');
INSERT INTO account VALUE ('5111222233339445', '2018-11-05', 'Saving', '724432341');
INSERT INTO transaction VALUE (1001, 202.50, '2019-08-15', 'Deposit', '5111222233339445');
INSERT INTO transaction VALUE (1002, 100.00, '2019-09-21', 'Deposit','2111222233332442');
INSERT INTO transaction VALUE (1003, 200.00, '2019-09-29', 'Deposit', '2111222233332442');
INSERT INTO transaction VALUE (1004, 50.00, '2019-09-29', 'Deposit', '2111222233332442');
INSERT INTO transaction VALUE (1005, 1000.00, '2019-09-29', 'Deposit','3111222233333443');
INSERT INTO transaction VALUE (1006, -202.50, '2019-08-29', 'Withdraw', '5111222233339445');
INSERT INTO transaction VALUE (1007, 50.00, '2019-09-29', 'Deposit', '2111222233332442');
INSERT INTO transaction VALUE (1008, 50.00, '2019-09-29', 'Deposit', '2111222233332442');
INSERT INTO transaction VALUE (1009, -10.00, '2019-09-26', 'Withdraw', '2111222233332442');
INSERT INTO transaction VALUE (1010, 50.00, '2019-09-29', 'Deposit', '4111222233335444');
INSERT INTO transaction VALUE (1011, 320.00, '2019-09-29', 'Deposit', '5111222233339445');
INSERT INTO transaction VALUE (1012, 50.00, '2019-09-18', 'Deposit', '4111222233335444');
INSERT INTO transaction VALUE (1013, 5000.00, '2019-06-21', 'Deposit', '1111222233331441');
INSERT INTO transaction VALUE (1014, -100.00, '2019-09-02', 'Withdraw', '1111222233331441');
INSERT INTO transaction VALUE (1015, -200.00, '2019-09-08', 'Withdraw', '1111222233331441');

1. Find the total amount of ’Deposit’ transactions at the bank
2. Find the list of transactions (statement) of September 2019 (09/01/2019 to 09/30/2019) for account ’1111222233331441’ (note: look at the date format).
3. Find the balance of ’1111222233331441’ before 09/01/2019 ((not including 09/01/2019).
4. Find the name of the customer that deposited the highest amount with one transaction (include the transaction amount).

The SQL code to solve these problems is below:

DROP DATABASE IF EXISTS Bank;
CREATE DATABASE Bank;
USE Bank;

DROP TABLE IF EXISTS transaction;
DROP TABLE IF EXISTS customer;
DROP TABLE IF EXISTS account;

CREATE TABLE customer (
name VARCHAR(20),
sex CHAR(1),
ssn CHAR(9) NOT NULL,
phone CHAR(15),
dob DATE,
address VARCHAR(50),
PRIMARY KEY(ssn)

);
  
CREATE TABLE account (
number CHAR(16) UNIQUE NOT NULL,
open_date DATE,
type CHAR(20),
owner_ssn CHAR(9) NOT NULL,
PRIMARY KEY(number)
);
  
CREATE TABLE transaction (
id INT(20) UNIQUE NOT NULL,
amount DECIMAL(9,2),
tdate DATE,
type CHAR(10),
account_num CHAR(16),
PRIMARY KEY(id)
);

INSERT INTO customer VALUE ('John Adam', 'M', '512432341', '(438) 321-2553', '1987-11-15',NULL);
INSERT INTO customer VALUE ('Alexander Felix', 'M', '724432341', '(541) 321-8553', '1991-05-22', NULL);
INSERT INTO customer VALUE ('Andrew William', 'M', '861894272', '(308) 692-1110', '1995-01-04', NULL);
INSERT INTO customer VALUE ('Ana Bert', 'F', '844192241', '(203) 932-7000', '1982-12-07', '23 Boston Post Rd, West Haven, CT 06516');

INSERT INTO account VALUE ('1111222233331441', '2018-12-03', 'Checking', '861894272');
INSERT INTO account VALUE ('2111222233332442', '2019-01-06', 'Saving', '512432341');
INSERT INTO account VALUE ('3111222233333443', '2017-09-22', 'Checking', '844192241');
INSERT INTO account VALUE ('4111222233335444', '2016-04-11', 'Checking', '724432341');
INSERT INTO account VALUE ('5111222233339445', '2018-11-05', 'Saving', '724432341');
INSERT INTO transaction VALUE (1001, 202.50, '2019-08-15', 'Deposit', '5111222233339445');
INSERT INTO transaction VALUE (1002, 100.00, '2019-09-21', 'Deposit','2111222233332442');
INSERT INTO transaction VALUE (1003, 200.00, '2019-09-29', 'Deposit', '2111222233332442');
INSERT INTO transaction VALUE (1004, 50.00, '2019-09-29', 'Deposit', '2111222233332442');
INSERT INTO transaction VALUE (1005, 1000.00, '2019-09-29', 'Deposit','3111222233333443');
INSERT INTO transaction VALUE (1006, -202.50, '2019-08-29', 'Withdraw', '5111222233339445');
INSERT INTO transaction VALUE (1007, 50.00, '2019-09-29', 'Deposit', '2111222233332442');
INSERT INTO transaction VALUE (1008, 50.00, '2019-09-29', 'Deposit', '2111222233332442');
INSERT INTO transaction VALUE (1009, -10.00, '2019-09-26', 'Withdraw', '2111222233332442');
INSERT INTO transaction VALUE (1010, 50.00, '2019-09-29', 'Deposit', '4111222233335444');
INSERT INTO transaction VALUE (1011, 320.00, '2019-09-29', 'Deposit', '5111222233339445');
INSERT INTO transaction VALUE (1012, 50.00, '2019-09-18', 'Deposit', '4111222233335444');
INSERT INTO transaction VALUE (1013, 5000.00, '2019-06-21', 'Deposit', '1111222233331441');
INSERT INTO transaction VALUE (1014, -100.00, '2019-09-02', 'Withdraw', '1111222233331441');
INSERT INTO transaction VALUE (1015, -200.00, '2019-09-08', 'Withdraw', '1111222233331441');