11. Portfolio Beta

You have a $2 million portfolio consisting of a $100,000 investment in each of 20 different stocks. The portfolio has a beta of 1.1. You are considering selling $100,000 worth of one stock with a beta of 0.9 and using the proceeds to purchase another stock with a beta of 1.4. What will the portfolio's new beta be after these transactions? Do not round intermediate calculations. Round your answer to two decimal places.

12. Required Rate of Return

Stock R has a beta of 1.7, Stock S has a beta of 0.65, the expected rate of return on an average stock is 8%, and the risk-free rate is 7%. By how much does the required return on the riskier stock exceed that on the less risky stock? Do not round intermediate calculations. Round your answer to two decimal places.

13. Historical Realized Rates of Return

You are considering an investment in either individual stocks or a portfolio of stocks. The two stocks you are researching, Stock A and Stock B, have the following historical returns:

1. Calculate the average rate of return for each stock during the 5-year period. Do not round intermediate calculations. Round your answers to two decimal places.

Stock A:   %

Stock B:   %

2. Suppose you had held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would have been the realized rate of return on the portfolio in each year? What would have been the average return on the portfolio during this period? Do not round intermediate calculations. Round your answers to two decimal places. Negative values, if any, should be indicated by a minus sign.

3. Calculate the standard deviation of returns for each stock and for the portfolio. Do not round intermediate calculations. Round your answers to two decimal places.

4. Suppose you are a risk-averse investor. Assuming Stocks A and B are your only choices, would you prefer to hold Stock A, Stock B, or the portfolio? Why?

A risk-averse investor should choose__?, since it offers __? expected return with __? risk.

Java Programming

Part 1 (20%)

Implement a class with a main method. Using an enhanced for loop, display each element of this array:

String[] names = {"alice", "bob", "carla", "dennis", "earl", "felicia"};

Part 2 (30%)
In a new class, implement two methods that will each calculate and return the average of an array of numeric values passed into it. Constraints:

• your two methods must have the same name
• one method should accept an array of ints; the other should accept an array of doubles
• both methods must return the average to at least two decimal places of accuracy

Implement a new class demonstrating your methods in action. Call your methods at least twice each with arrays of different sizes each time.

Part 3 (50%)
The Cool Ice Cream Shoppe pays its summer employees bonuses based on two factors: the number of weeks worked over the summer, and the number of positive customer reviews. The table below shows the bonuses based on these two factors.

Examples:

• Employee A worked 4 weeks and got 2 positive reviews; bonus: $325.
• Employee B worked 1 week and got 7 positive reviews; bonus: $180
• Employee C worked 8 weeks and got 0 positive reviews; bonus: $425
• Total bonuses paid: $930

Write an application that:

• stores the bonus values in a two-dimensional array
• allows the user to enter values for weeks worked and reviews received, and displays the amount of the bonus
• only accepts valid values for input (focus on valid ranges; don't worry about preventing wrong type input)
• allows the user to keep entering values until some sentinel value is entered, at which point the program ends
• upon ending, displays the total amount of bonuses paid out based upon the values entered

For your chimera’s largest city, respond and address how each of these seven makes its climate the way it is.

My Chimera is Occitania

1. Insolation (solar radiation received) (two to three sentences)

2. Continental vs. Maritime (Marine) location (two to three sentences)

3. Global Atmospheric Circulation and Prevailing Winds (two to three sentences)

4. Ocean Currents (two to three sentences)

5. Position in relation to Source Regions (three to four sentences)

6. Surrounding Terrain (two to three sentences)

7. Elevation (two to three sentences)

2. Continental vs. Maritime (Marine) location (two to three sentences)

3. Global Atmospheric Circulation and Prevailing Winds (two to three sentences)

4. Ocean Currents (two to three sentences)

5. Position in relation to Source Regions (three to four sentences)

6. Surrounding Terrain (two to three sentences)

7. Elevation (two to three sentences)

A researcher would like to evaluate the effectiveness of a pain-relief patch designed for lower back pain. Prior to testing the patch, each of n = 8 patients rates the current level of back pain on a scale from 1 to 10. After wearing the patch for 90 minutes, a second pain rating is recorded. The data are as follows:

                  Before      After

                        6            2

                        8            3

                        9            4

                        8            1

                      10           2

                        5            3

                        9            8

                        7            7

Compute the mean and variance for the sample of difference scores.

Do the results indicate a significant difference?

Use a two-tailed test with α = .05

Compute Cohen’s d to measure the size of the effect.

What is the variance for this study?

Group of answer choices

7

8

4

2

Two identical firms (identical cost functions) operate on a market. For each of the following market demand curves and cost curves determine the Bertrand, Cournot, and Stackelberg outcomes (prices, quantities, and profits - for each firm, and at the market level). Also determine the collusive outcome (assuming the two firms form a cartel). Compare the outcomes. a) P = 200 − 2Q, T C = 50 + 10Q (PB = 10, PC = 73.33, PS = 57.5, PM = 105) b) P = 250 − Q, T C = 50Q (PB = 50, PC = 350/3, PS = 100, PM = 150) c) P = 1200 − Q, T C = 25 + 40Q (PB = 40, PC = 426.67, PS = 330, PM = 620) d) P = 160 − 2Q, T C = Q2(PB = 160/3, PC = 80, PS = 1600/21, PM = 96)

1. Assume that you can measure the effects of identical concentration of two inhibitors x and Z, on the K and V M and Vmax of an Enzyme. Which of the following would be consistent with inhibitor X being a more effective inhibitor than Z?

2. Explain why an answer is either wrong/right.

a. Inhibitor X increases KM less than inhibitor Z while neither has an effect on V Max.

b. Inhibitor X decreases KM and VMax two-fold while inhibitor Z decreases both three-fold.

c. Inhibitor X doubles the KM and it decreases VMax by 50% while inhibitor Z triples the KM and it decreases the VMax by 40%.

d. Inhibitor X doubles the KM and it decreases VMax by 50% while inhibitor Z triples the KM and it decreases VMax by 10%.

PLEASE EXPLAIN THOROUGHLY!!!!!!!!!!!!!!!!!

Palestine Corp. needs to purchase new plastic moulding machines to meet the demand for its
product. The cost of the equipment is $3,724,000. It is estimated that the firm will increase after tax cash
flow (ATCF) by $700,601 annually for the next 6 years. The firm is financed with 40% debt and 60%
equity, both based on current market values, though the firm has announced that it wants to quickly
change its debt to equity ratio to 1.5. The firm's beta is 0.91, the risk free rate is 0.70% and the expected
market return is 3.69%. Palestine Corp.'s semi-annual bonds have 14.20% coupons, 16 years to
maturity, and a quoted price of 97.168. Assume the firm's tax rate is 34%. The firm's last 5 dividends (the
last in the list is D0) are 1.23, 1.26, 1.45, 1.90, and 1.91. Its current market price is $99.31.
Question 3, Short Answer C: Assume that there are some large cleanup and disposal costs of $372,400 at
the end of the project (in year 7). Explain in a sentence or two how this impacts the calculation of the internal
rate of return? Note that no additional calculation is required to answer this question.

Approximately what is (How Much is) the Risk Premium spread for BBB (or Baa) bonds above the comparable Treasury note? That is, how much additional return ("Risk Premium") do investors require, on average, to invest in lower grade BBB bonds?

If today I was to buy a Treasury NOTE that has a maturity of five years, what rate of interest could I expect to get on my investment?

I am looking to buy some bonds. These bonds mature in exactly seven years from today, have a 2% coupon that is paid semi-annually and are priced to provide a Yield to Maturity today of 2.5%.

How much will I have to pay (excluding any commissions) for one bond?

In the previous question (I am looking to buy some bonds. These bonds mature in exactly seven years from today, have a 2% coupon that is paid semi-annually and are priced to provide a Yield to Maturity today of 2.5%,)...

Assume that I buy the bond for the price we calculated in the previous question, hold the bond for Two Years and am able at that time to sell them for PAR value. What is my annual rate of return for the two years that I held them?

A local Starbucks coffee shop has two baristas filling orders, and it is known that the time it takes for each barista to complete an order is exponentially distributed with average 60 seconds. You are next in line with barista 1 filling an order for John and barista 2 filling an order for Mary. When one of these two customers gets their order, you will proceed to that barista to get your order filled. What is the probability that, of these three customers, you will be the last one of the three to leave the coffee shop with your coffee order?

Chapter 13

13.1 Jean tests the effects of four different levels of caffeine (no caffeine, 40mg caffeine, 80mg caffeine, 120mg caffeine) on public speaking ability. One group of participants was tested in all four conditions over the course of four weeks – a different condition each week. What statistical analysis should Jean conduct to determine the effect of caffeine on public speaking?

13.2 How does the formula for the repeated-measures ANOVA differ from the formula for the One-way, independent-measures ANOVA?

13.3 Calculate SS_{between subjects} for the following data set. SHOW WORK

Person   Treatment 1       Treatment 2       Treatment 3

A       8           5           7

B       10           4           5

C       6           4           4

D       8           3           6

E       7           6           5

F       8           4           5

13.4 What three hypothesis tests do you have to conduct if you are using a Two-Factor (Factorial) ANOVA to analyze your data? (list/describe each one)

13.5 You can do some basic calculations based on treatment means, to get an idea of what types of effects might be present in a factorial study (even if you can’t say if they are statistically significant). Based on the table of means below, does it look like there could be any main effects or interactions? Specify which ones. SHOW WORK

Use the following scenario and data to answer questions 13.6 - 13.7

Researchers are interested in how serving temperature and pouring method affect the taste of Champagne (more bubbles = better taste). In this 3x2 factorial design, different glasses of Champagne are poured under different conditions; the summary data for the study appear in the table below. The researchers want to know which method is best.

n = 10

N = 60

∑X² = 1150

*Note, low averages mean few bubbles = Champagne is less tasty

13.6 Work through the steps involved in calculating this Factorial ANOVA for the Champagne study. Fill out the ANOVA table below as you go through the steps. Show work for Full Credit and the chance of Partial Credit.

Source               SS           df       MS       F

Between treatments

   Temperature

   Pour

Temperature X Pour

Within treatments

Total

13.7 What critical F value would you use to evaluate the three hypotheses in the Champagne ANOVA?

Temperature critical F =

Pour critical F =

Temperature X Pour critical F =

Chapter 14

14.1 The figure on the right is a scatterplot showing the relationship between drive ratio and horsepower. Based only on the figure, how would you describe this relationship? (Make sure to address its form, direction, and strength.)

Form –

Direction –

Strength –

14.2 What is the biggest limitation a researcher faces when using a correlational design?

14.3 Give one example of a study that would need to use a correlational design?

End of Lab 10!