Currently, your portfolio consists of $3,000 invested in share A with a beta of 0.7 and $4,000 in share B with a beta of 0.5. You have another $12,000 to invest and want to divide it between share C with a beta of 1.3 and a risk-free asset. You want your portfolio beta to be 0.9. How much (to the nearest dollar) should you invest in the risk free asset?

a. 2,000

b. 10,000

c. $3,000

d.8,800

The piston diameter of a certain hand pump is 0.7 inch. The manager determines that the diameters are normally distributed, with a mean of 0.7 inch and a standard deviation of 0.005 inch. After recalibrating the production machine, the manager randomly selects 21 pistons and determines that the standard deviation is 0.0044 inch. Is there significant evidence for the manager to conclude that the standard deviation has decreased at the a=0.10 level of significance?
What are the correct hypothesis is H0:_,_,__
The alternative hypothesis is H1: _,_,__
Calculate the value of the test statistic.

X2/0= _ (Round two decimal)
Use technology to determine the P-value of the test statistic.
The P-value is_. (Round three decimal places)
What is the correct conclusion at the a=0.10 level of significance?
Since the P-value is ___ than the level of significance, ___ the null hypothesis. There ___ sufficient evidence to conclude that the standard deviation has decreased at the 0.10 level of significance.

The piston diameter of a certain hand pump is 0.7 inch. The manager determines that the diameters are normally distributed, with a mean of 0.7 inch and a standard deviation of 0.005 inch. After recalibrating the production machine, the manager randomly selects 21 pistons and determines that the standard deviation is 0.0044 inch. Is there significant evidence for the manager to conclude that the standard deviation has decreased at the a=0.10 level of significance?
What are the correct hypothesis is H0:_,_,__
The alternative hypothesis is H1: _,_,__
Calculate the value of the test statistic.

X2/0= _ (Round two decimal)
Use technology to determine the P-value of the test statistic.
The P-value is_. (Round three decimal places)
What is the correct conclusion at the a=0.10 level of significance?
Since the P-value is ___ than the level of significance, ___ the null hypothesis. There ___ sufficient evidence to conclude that the standard deviation has decreased at the 0.10 level of significance.

The average age in the senior year is 22, with an SD of 0.7. The z-score of my age is z=1.98. My age is age=______. The z-score of your age is z=-0.03. Your age is age=_______. The z-score of my friend’s age is z=-2.23. My friend’s age is age=_______. The z-score of someone’s age is z=3.02. That person’s age is age=________. The probability that a randomly chosen observation fall between z=-1 and z=1 is __________. The probability that a randomly chosen observation fall between z=-2 and z=2 is __________. The probability that a randomly chosen observation fall between z=-3 and z=3 is __________.

For country A the income elasticity of beef is 0.7 whereas the income elasticity of cereals is 0.15. This implies that for country A

A. Can't say

B. Poor people consume no beef

C. Rich people consume no cereal

D. As you become richer, beef becomes a larger part of your diet and cereals become a smaller part of your diet.

BPO Services is in the business of digitizing information from forms that are filled out by hand. In 2006, a big client gave BPO a distribution of the forms that it digitized in house last year, and BPO estimated how much it would cost to digitize each form.

The expected cost of digitizing a form is $_______ .

Suppose the client and BPO agree to a deal, whereby the client pays BPO to digitize forms. The price of each form processed is equal to the expected cost of the form that you calculated in the previous part of the problem.

Suppose that after the agreement, the client sends an equal mix of forms of types D and E only.

The expected digitization cost per form of the forms sent by the client is $________ . This leads to an expected loss of $_______ per form for BPO. (Hint: Do not round your answers. Enter the loss as a positive number.)

Which of the following would result as a buffer if any when 1 L of each is mixed together:

a) 0.1 M KOH and 0.2 NH₄Cl

b) 0.2 M HNO₃ and 0.6 M NaNO₃

Please Explain!

Mr. John Backster, a retired executive, desires to invest a portion of his assets in rental property. He has narrowed his choices to two apartment complexes, Windy Acres and Hillcrest Apartments. The anticipated annual cash inflows from each are as follows: Windy Acres Hillcrest Apartments Yearly Aftertax Cash Inflow Probability Yearly Aftertax Cash Inflow Probability 30,000 0.2 35,000 0.2 35,000 0.2 40,000 0.4 50,000 0.2 50,000 0.2 65,000 0.2 60,000 0.2 70,000 0.2 Mr. Backster is likely to hold the apartment complex of his choice for about 25 years and will use this period for decision-making purposes. Either apartment can be purchased for $175,000. Mr. Backster uses a risk-adjusted discount rate approach when evaluating investments. His scale is related to the coefficient of variation (for other types of investments, he also considers other measures). Coefficient of Variation Discount Rate 0–0.35 7% 0.35–0.40 12 (cost of capital) 0.40–0.50 15 Over 0.50 not considered

a. Compute the risk-adjusted net present value for Windy Acres and Hillcrest Apartments. (Do not round intermediate calculations. Round the final answers to nearest whole dollar.) (If you're using the TVM funtions of a calculator to answer the question, then you can ignore this note. If you're using the PV tables at the back of the book to answer this question, round "PV Factor" to 3 decimal places.) Net present value Windy Acres $ Hillcrest Apartments $ b-1. Which investment should Mr. Backster accept if the two investments are mutually exclusive? Hillcrest Windy Acres Both None b-2. Which investment should Mr. Backster accept If the investments are not mutually exclusive and no capital rationing is involved? Windy Acres Hillcrest Apartments Both None

Alliston spa, a California company, has been expanding in the Northeast. It has opened a spa in Stowe, Vermont, and another in the Berkshires, Massachusetts, and is now planning to open a third one in the East End’s South Fork of Long Island, New York. Alliston is eyeing an unused space owned by Orange Shores Inn. The space is located on the third floor of the main building. About 1/5 of the 10,000 sq. ft. space will be used to build a wide pathway with a garden trellis along the path to connect the main building to a new addition under construction. The rest of the space can be rented out to a third party.  

Alliston spa has offered to lease the unused property with Orange Shores Inn for 4 years for a monthly rent of $22,000 for the first 2 years, and a 7% annual increase for the next two years

Orange spa has the following two options :.  

Alliston spa.   The Orange hotel has to make the space ready for lease. It has to set up the partitions and put in all the necessary plumbing and new flooring. The estimates for the up-front renovation costs range from $200,000 to $250,000 to be depreciated over the life of the project using straight-line with a zero salvage value. Any other spa-related installations will be assumed by Alliston. The existing elevators and toilets would be used by Alliston and, therefore, a pro-rata allocation of the costs of the facilities should be based on the area that will be used. It is estimated to be $11,000 per annum. In addition, there will be an allocation of $ 2,000 per annum to Alliston for any repair and maintenance costs that will be incurred. Alliston will pay all utilities and other operating expenses.   

             Orange Spa. If the hotel creates its own spa, the up-front investment is estimated to range between $200,000 to $230,000. Other capital investments will include the installations of whirlpools, sauna, and massage and facial rooms. These additional investments will amount to $150,000.    

Revenues are expected to be generated 30% from hotel guests and the other 70% from outside bookings. Total sales are estimated to be $845,000 the first year of operation. This revenue has been arrived based on expected hotel bookings per year and prediction of demand for spa services from Long Island and the surrounding area. There will also be a spill-over effect from outside spa guests patronizing its own restaurant, adding additional covers per day. It is estimated that this will generate additional revenues of $55,000 per annum.  

             The project is estimated to last for 6 years. Sales are expected to grow at 4% per year. Estimates of the operating costs are as follows:

             Salaries                                                                            15% of Sales

             Other operating expenses                                              30% of Sales

             Depreciation- equipment & furniture                          Straight-line; zero salve value

             Capital expenditure                                                        Equal annual depreciation

             Cost of Capital.    Orange Shores Inn has a capital structure consisting of 40% debt and 60% equity. The debt consists of loans from the Long Island Bank with an interest rate of 6.8%. The cost of equity of the hotel shareholders is 16%. The corporate tax rate is 40%.  

It is possible that the hotel will project a different image to the public if it offers spa services. Instead of a hotel that caters to families, it will be perceived more as a hotel that caters to couples and singles. This might have a negative impact in terms of attracting tourists traveling with children. The total patronage for the hotel might decline by 12%. Below is the projection on net room revenue for the next six years.

Projection of Net Room Revenue

(Room Sales – Room Operating Expenses)

1. What are the relevant cash flows associated with each project?
2. How should the different lives of the projects be accounted?
3. What criteria should be used to evaluate the projects?
4. Which project is recommended

? is a normal random variable with µ = 2 and σ = 5. Find the value of c such that ?{|?−3|>?}=0.7