Lakonishok Equipment has an investment opportunity in Europe. The project costs €12 million and is expected to produce cash flows of €2 million in Year 1, €2.4 million in Year 2, and €3.5 million in Year 3. The current spot exchange rate is $1.35/€; and the current risk-free rate in the United States is 2.0 percent, compared to that in Europe of 2.8 percent. The appropriate discount rate for the project is estimated to be 14 percent, the U.S. cost of capital for the company. In addition, the subsidiary can be sold at the end of three years for an estimated €9 million. Use the exact form of interest rate parity in calculating the expected spot rates. What is the NPV of the project in U.S. dollars?

a.True or false. The Federal Insurance Office of the U.S. Treasury offers insurance companies the opportunity of an optional federal charter, which allows them to be regulated at the federal level rather than by multiple states.

b.A stock with a 5% dividend yield is priced at $100. If the projected growth rate of dividends is 3% (forever), what is the company’s cost of equity according to the dividend discount model?

c. Suppose the exchange rate with the United Kingdom is 25 dollars per UK pound, and that the US one year interest rate is 2% while the UK one year interest rate is 0.5%. What is the expected exchange rate in one year if interest parity holds?

(a) What do we mean by a “postponement strategy”? Why can it be an effective strategy for a firm engaging mass customization? (b) Since the 2008 global financial crisis, the B/L (“bill of lading”) of container shipments from Asian factories to the United States (US) has increasingly specified US gateway ports, rather than the local RDCs (regional distribution centers) of final markets, as the stopping points (as opposed to through points). What are the main reasons behind this development, and why? (c) Following part (b), should the phenomenon happen more often for high-value products or for low-value products? Explain your answer.

Your consulting company is now working with another company that would like to expand its business into other countries. You have been asked to provide a comparison of the different economic systems and how the company would need to operate in each country.

Select two countries and write a 525- to 700-word paper in which you:

• Compare the economic systems of the two countries and their impact on business growth/development.
• Identify the major economic/political systems of each country.
• Discuss which major economic/political system the United States uses and why.
• Discuss the problems a business may encounter when operating in each country’s economic systems.

Question 1

Suppose the exchange rate changes so that less Japanese yen are required to buy a dollar. We could conclude that:

A. the Japanese yen has appreciated in value.

B.U.S. citizens will buy more Japanese imports.

C. Japanese will demand less U.S. exports.

D. U.S. citizens will buy more Japanese imports.

Question 2

An increase in the value of the Japanese yen relative to the U.S. dollar will

A. increase aggregate demand in the United States.

B. decrease aggregate supply in the United States.

C. increase aggregate demand in Japan.

D. increase aggregate supply in Japan.

Question 3

Table 20-1
Suppose the economy of Macroland is described by the following:
C = 200 + .8DI (DI = disposable income)
I = 300 + .2Y − 50r (Y = GDP)
(r, the interest rate, is measured in percentage points. For example, a 9 percent interest rate is r = 9).

For this economy, assume that the Federal Reserve uses its monetary policy to peg the interest rate at
r = 6
G = 750
T = .20Y
X = 200
M = 150 + .2Y
Hint: DI = Y − T

From Table 20-1, compute equilibrium GDP for Macroland.

A. 2,917

B. 2,778

C. 2,625

D. 2,525

Question 4

For the U.S, a major open economy with extensive capital flows, what is the effect of a decrease in interest rates due to expansionary monetary policy?

A. a currency depreciation and increased net exports

B. a currency depreciation and reduced net exports

C. a currency appreciation and increased net exports

D.a currency appreciation and reduced net exports

As a consultant, you need to use the Hospital database and construct a 90% confidence interval to estimate the average census for hospitals. Change the level of confidence to 99%. What happened to the interval? Did the point estimate change?

Determine the sample proportion of the Hospital database under the variable “service” that are “general medical” (category 1). From this statistic, construct a 95% confidence interval to estimate the population proportion of hospitals that are “general medical.” What is the point estimate? How much error is there in the interval?

Suppose you want to “prove” that the average hospital in the United States averages more than 700 births per year. Use the hospital database as your sample and test this hypothesis. Let alpha be 0.01.

On average, do hospitals in the United States employ fewer than 900 personnel? Use the hospital database as your sample and an alpha of 0.10 to test this figure as the alternative hypothesis. Assume that the number of births and number of employees in the hospitals are normally distributed in the population.

Part 3 - Inferential Statistics (2-3 paragraphs)

Use the Part 3: Inferential Statistics document.

• Create (formulate) hypotheses
• Run formal hypothesis tests
• Make decisions. Your decisions should be stated in non-technical terms.

1. Minorities in Higher Education

You are a social psychologist interested in the adjustment of international students who go to school at American universities. You decide to examine whether there are differences in scores on the Acceptability by Others Scale (AOS). The AOS is a scale that ranges from 1 to 20 (1 = feeling completely isolated – 20 feeling completely accepted) that measures acceptance within the college community. You collect scores on the AOS from a sample of international students (Int) at a small college in the United States and another sample of United States (U.S.) citizens attending the same college. The data is provided below. Conduct a two-tailed independent-samples t-test by hand using an alpha level of .05 to determine whether there are differences in AOS scores between the two samples. Record your answers below.

1. Step #1: A priori expectations
   1. Question of interest:

2. Prediction:

2. Step #2: Set up hypotheses
   1. H₀:

2. H₁:

3. Step #3: Set criteria for decision
   1. t_cv (critical value for rejecting the null hypothesis)

2. Decision rule for when to reject the null hypothesis:

4. Step #4: Collect data/ compute statistic

5. 
   Step #5: Report results in standard format – Must include test statistic , degrees of freedom, p-value , 95% confidence interval (95% C.I.) and conclusion (reject or fail to reject H₀)

​​​​​​​6. Step #6: Interpret the results of the statistical test in terms of the research question