Consider three scenarios with the probabilities given below. Let the returns on two different stocks in these scenarios be as follows: Scenario Probability return K1 return K2 ω1 0.2 −10% −30% ω2 0.5 0% 20% ω3 0.3 10% 50% If a portfolio has 60% of funds invested in stock 1 and 40% of funds invested in stock 2, find the risk σV for this portfolio. (Need explanation not just spreadsheet)

2. Specification - Given the following code base, add the appropriate function that will give the correct results/output.

CODE:

# TODO : Add Two Missing Functions HERE

mlist = [(" Orange ", 10 , 0.25) ,( " Apple ", 5 , .20) ,

(" Banana ", 2 , 0.3) ,(" Kiwi ", 1 , 0.5)]

addFruit (10 ," Lemon " ,0.1)

displayFruitList ( mlist )

OUTPUT:

Orange --- $ 2.50

Apple --- $ 1.00

Banana --- $ 0.60

Kiwi --- $ 0.50

Lemon --- $ 1.00

you are evaluating a new project and need an estimate for your project's beta. You have identified the following information about three firms with comparable projects.

The unlevered beta for Nod is closest to :

A.1.00

B.0.90

C.0.95

D.1.10

Utilizing the market for reserves and assuming that initially the federal funds rate is 0.5 percentage point below the discount rate but 0.5 percentage point above the interest rate paid on reserves,

a. Show what would happen to the federal funds rate if the FED decreased the discount rate by 0.3 percent

b. Show what would happen to the federal funds rate if the FED increased the interest rate paid on reserves by 0.75 percent

The stock of Arbor Pet Trees (APT) is priced based on the given systematic risk factors. Estimated sensitivities to these risk factors are given by the betas of the regression

R_APT – R_rf = β_creditR_credit + β_value R_value + α + ε

What is the expected return on the stock of Arbor Pet Trees if the stock is fairly valued?

BUSINESS TRAVEL EXPENSES An executive of Trident Communications recently traveled to London, Paris, and Rome. She  paid $280, $330, and $260 per night for lodging in London, Paris, and Rome, respectively, and his hotel bills totaled $4060. She spent $130, $140, and $110 per day for his meals in London, Paris, and Rome, respectively, and his expenses for meals totaled $1800. If she spent as many days in London as she did in Paris and Rome combined, how many days did she stay in each city? Solve using Gauz Jordan method.

QUESTION 1:

Davie's Hotel budgeted 800 room sales for the week ended June 24th. The estimated average price per room was $18.50. The actual average price per room was 10 percent greater than anticipated, while room sales in units were 10 percent less than forecasted.

Complete the following table for the Hotel’s revenue variance analysis.

A) Calculate the budget variance.

B) Calculate the price variance.

C) Calculate the volume variance.

D) Calculate the price-volume variance.

14. What are the highest tax rates for each of the following scenarios?

____. Operating income from a hotel earned by a foreign corporation (excluding branch profits tax)

____. Interest income earned by a foreign corporation from a US borrower

____. Net rental income earned by an U.S. individual (exclude the passthrough deduction)

____. Capital gain earned by an U.S. individual

____. Interest income earned by a U.S. corporation

____. Capital gain earned by an U.S. corporation

____. Depreciation recapture on the sale of U.S. real estate (Section 1250 property) for an individual

____. Depreciation recapture on the sale of U.S. real estate (Section 1245 property) for an individual

A quality control activity analysis indicated the following four activity costs of a hotel.

Sales are $7,700,000 for the year. Prepare a cost of quality report.

Present percentage values to one decimal place.

Using the demand and supply diagrams (one for each market), show what short-run changes in price and quantity would be expected in the following markets if terrorism-related worries about air safety cause travelers to shy away from air travel. Each graph should contain the original and new demand and supply curves, and the original and new equilibrium prices and quantities. For each market, write one sentence explaining why each curve shifts or does not shift.

The market for air travel.

The market for rail travel.

The market for hotel rooms in Hawaii.

The market for gasoline.