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Ross Co., Westerfield, Inc., and Jordan Company announced a new agreement to market their respective products in China on July 18 (7/18), February 12 (2/12), and October 7 (10/7), respectively. Given the information below, calculate the cumulative abnormal return (CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return. (Negative values should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place.) |
| Ross Co. | Westerfield, Inc. | Jordan Company | ||||||||
| Date | Market Return |
Company Return |
Date | Market Return |
Company Return |
Date | Market Return |
Company Return |
||
| 7/12 | -0.1 | -0.4 | 2/8 | -0.1 | -0.4 | 10/1 | 1.3 | 0.5 | ||
| 7/13 | 1.1 | 0.3 | 2/9 | -0.2 | -0.4 | 10/2 | 1.2 | 0.5 | ||
| 7/16 | 0.5 | 0.4 | 2/10 | 0.5 | 0.6 | 10/3 | 0.8 | 1.3 | ||
| 7/17 | -0.6 | -0.2 | 2/11 | 0.7 | 2 | 10/6 | -0.1 | -0.8 | ||
| 7/18 | -0.9 | 1.3 | 2/12 | -0.1 | 0.1 | 10/7 | -2.3 | -0.8 | ||
| 7/19 | -1.8 | -0.2 | 2/15 | 1.3 | 1.8 | 10/8 | 1.3 | 0.5 | ||
| 7/20 | -0.9 | -0.2 | 2/16 | 0.7 | 0.6 | 10/9 | -0.5 | -0.5 | ||
| 7/23 | 0.6 | 0.4 | 2/17 | -0.1 | 0 | 10/10 | 0.1 | -0.1 | ||
| 7/24 | 1.1 | 0 | 2/18 | 1.5 | 0.4 | 10/13 | -0.2 | -0.6 | ||
| Abnormal returns (Ri – RM) | ||||||
| Days from announcement | Ross | W’field | Jordan | Sum | Average abnormal return | Cumulative average residual |
| -4 | ||||||
| -3 | ||||||
| -2 | ||||||
| -1 | ||||||
| 0 | ||||||
| 1 | ||||||
| 2 | ||||||
| 3 | ||||||
| 4 | ||||||
rev: 09_12_2014_QC_53420
In: Finance
Problem 7-5 Cumulative Abnormal Returns (LO2, CFA2)
Ross Co., Westerfield, Inc., and Jordan Company announced a new agreement to market their respective products in China on July 18, February 12, and October 7, respectively. Given the information below, calculate the cumulative abnormal return (CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return. (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place.)
| Ross Co. | Westerfield, Inc. | Jordan Company | ||||||||
| Date | Market Return |
Company Return |
Date | Market Return |
Company Return |
Date | Market Return |
Company Return |
||
| July 12 | −.5 | −.6 | Feb 8 | −.5 | −.6 | Oct 1 | 2.0 | .8 | ||
| July 13 | 1.8 | .3 | Feb 9 | −.6 | −.6 | Oct 2 | 1.9 | .8 | ||
| July 16 | −.2 | .3 | Feb 10 | .3 | .6 | Oct 3 | .6 | 1.3 | ||
| July 17 | −.6 | −.2 | Feb 11 | .5 | 2.7 | Oct 6 | −.1 | −.5 | ||
| July 18 | −.2 | 1.3 | Feb 12 | −.1 | .1 | Oct 7 | −1.6 | −.5 | ||
| July 19 | −2.5 | −.1 | Feb 15 | 1.3 | 1.9 | Oct 8 | 1.3 | .4 | ||
| July 20 | −.9 | −1.8 | Feb 16 | .7 | .8 | Oct 9 | −.5 | .8 | ||
| July 23 | .6 | .4 | Feb 17 | −.1 | .0 | Oct 10 | .1 | −.1 | ||
| July 24 | 1.8 | .0 | Feb 18 | 2.2 | .4 | Oct 13 | −.5 | −.6 | ||
| Abnormal returns (Ri-Rm) | ||||||
| Days from announcement | Ross | W'field | Jordan | Sum | Average abnormal return | Cumulative average residual |
| -4 | ||||||
| -3 | ||||||
| -2 | ||||||
| -1 | ||||||
| 0 | ||||||
| 1 | ||||||
| 2 | ||||||
| 3 | ||||||
| 4 |
In: Finance
Ross Co., Westerfield, Inc., and Jordan Company announced a new agreement to market their respective products in China on July 18, February 12, and October 7, respectively. Given the information below, calculate the cumulative abnormal return (CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return. (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place.)
| Ross Co. | Westerfield, Inc. | Jordan Company | ||||||||
| Date | Market Return |
Company Return |
Date | Market Return |
Company Return |
Date | Market Return |
Company Return |
||
| July 12 | −.1 | −.9 | Feb 8 | −.6 | −.9 | Oct 1 | .4 | .5 | ||
| July 13 | .2 | .3 | Feb 9 | −.7 | −.9 | Oct 2 | .3 | .5 | ||
| July 16 | .5 | .7 | Feb 10 | .5 | .6 | Oct 3 | .8 | 1.3 | ||
| July 17 | −.6 | −.2 | Feb 11 | .7 | 1.1 | Oct 6 | −.1 | −.8 | ||
| July 18 | −1.8 | 1.3 | Feb 12 | −.1 | .1 | Oct 7 | −2.3 | −.8 | ||
| July 19 | −.9 | −.5 | Feb 15 | 1.2 | 1.5 | Oct 8 | .2 | .4 | ||
| July 20 | −.9 | −1.1 | Feb 16 | .7 | .6 | Oct 9 | −.5 | −.5 | ||
| July 23 | .6 | .4 | Feb 17 | −.1 | .0 | Oct 10 | .1 | −.1 | ||
| July 24 | .2 | .0 | Feb 18 | .6 | .4 | Oct 13 | −.1 | −.6 | ||
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In: Finance
Sales of floor cleaners at Lavoie's Flooring Co. over the past 13 months are as follows:
| Sales of floor cleaners -Lavoie's Flooring Co. | |||
| Month | Sale ($1,000s) | Total 3 Months | 3 Months Avg. |
| January | 11 | ||
| February | 14 | 41 | 13.66666667 |
| March | 16 | 40 | 13.33333333 |
| April | 10 | 41 | 13.66666667 |
| May | 15 | 42 | 14 |
| June | 17 | 43 | 14.33333333 |
| July | 11 | 42 | 14 |
| August | 14 | 42 | 14 |
| September | 17 | 43 | 14.33333333 |
| October | 12 | 43 | 14.33333333 |
| November | 14 | 42 | 14 |
| December | 16 | 41 | 13.66666667 |
| January | 11 | 27 | 9 |
| February | ? | 11 |
3.666666667 |
A. Using a moving average with three periods, determine the demand for floor cleaners for next February.
Answer: When using a moving average with three periods, we can determine the demand for floor cleaner in the next February is 3.6
B. Using a weighted moving average with three periods, determine the demand for floor cleaners for February.
Use 4, 2, and 1 for the weights of the most recent, second most recent, and third most recent periods, respectively. For example, if you were forecasting the demand for February, November would have a weight of 1, December would have a weight of 2, and January would have a weight of 4.
Answer:
| November | 14 | 14*1 = 14 | Forcast Fabruary = (14*1)+(16*2)+(11*4) / 4+2+1 | |||
| December | 16 | 16*2 = 32 | 90/7= | 12.857 | ||
| January | 11 | 11*4 = 44 | ||||
| February | ? | |||||
C. Use a trend analysis to forecast the demand for floor cleaners.
Answer: ?
D. Evaluate and compare the accuracy of each of these methods using at least one of the forecast error measures.
Answer: ?
F. Are all of the models used in parts a - c appropriate to use with the data provided? Why?
Answer: ?
In: Statistics and Probability
Ross Co., Westerfield, Inc., and Jordan Company announced a new agreement to market their respective products in China on July 18, February 12, and October 7, respectively. Given the information below, calculate the cumulative abnormal return (CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return. (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place.)
| Ross Co. | Westerfield, Inc. | Jordan Company | ||||||||
| Date | Market Return |
Company Return |
Date | Market Return |
Company Return |
Date | Market Return |
Company Return |
||
| July 12 | –0.2 | –0.4 | Feb 8 | –0.7 | –0.9 | Oct 1 | 0.3 | 0.5 | ||
| July 13 | 0.1 | 0.3 | Feb 9 | –0.8 | –0.9 | Oct 2 | 0.2 | 0.8 | ||
| July 16 | 0.6 | 0.8 | Feb 10 | 0.6 | 0.4 | Oct 3 | 0.9 | 1.3 | ||
| July 17 | –0.4 | –0.2 | Feb 11 | 0.8 | 1.0 | Oct 6 | –0.1 | −0.5 | ||
| July 18 | –1.9 | 1.3 | Feb 12 | –0.1 | 0.1 | Oct 7 | –2.4 | −0.5 | ||
| July 19 | –0.8 | –0.6 | Feb 15 | 1.3 | 1.4 | Oct 8 | 0.3 | 0.3 | ||
| July 20 | –0.9 | –1.0 | Feb 16 | 0.7 | 0.7 | Oct 9 | –0.5 | −0.4 | ||
| July 23 | 0.6 | 0.4 | Feb 17 | –0.1 | 0.0 | Oct 10 | 0.1 | −0.1 | ||
| July 24 | 0.1 | 0.0 | Feb 18 | 0.5 | 0.4 | Oct 13 | –0.2 | −0.6 | ||
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In: Finance
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Ross Co., Westerfield, Inc., and Jordan Company announced a new agreement to market their respective products in China on July 18 (7/18), February 12 (2/12), and October 7 (10/7), respectively. Given the information below, calculate the cumulative abnormal return (CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return. (Negative values should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place.) |
| Ross Co. | Westerfield, Inc. | Jordan Company | ||||||||
| Date | Market Return |
Company Return |
Date | Market Return |
Company Return |
Date | Market Return |
Company Return |
||
| 7/12 | –.2 | –.4 | 2/8 | –.7 | –.9 | 10/1 | .3 | .5 | ||
| 7/13 | .1 | .3 | 2/9 | –.8 | –.9 | 10/2 | .2 | .8 | ||
| 7/16 | .6 | .8 | 2/10 | .6 | .4 | 10/3 | .9 | 1.3 | ||
| 7/17 | –.4 | –.2 | 2/11 | .8 | 1.0 | 10/6 | –.1 | −.5 | ||
| 7/18 | –1.9 | 1.3 | 2/12 | –.1 | .1 | 10/7 | –2.4 | −.5 | ||
| 7/19 | –.8 | –.6 | 2/15 | 1.3 | 1.4 | 10/8 | .3 | .3 | ||
| 7/20 | –.9 | –1.0 | 2/16 | .7 | .7 | 10/9 | –.5 | −.4 | ||
| 7/23 | .6 | .4 | 2/17 | –.1 | .0 | 10/10 | .1 | −.1 | ||
| 7/24 | .1 | .0 | 2/18 | .5 | .4 | 10/13 | –.2 | −.6 | ||
| Abnormal returns (Ri – RM) | ||||||
| Days from announcement | Ross | W’field | Jordan | Sum | Average abnormal return | Cumulative average residual |
| −4 | ||||||
| −3 | ||||||
| −2 | ||||||
| −1 | ||||||
| 0 | ||||||
| 1 | ||||||
| 2 | ||||||
| 3 | ||||||
| 4 | ||||||
In: Finance
Ross Co., Westerfield, Inc., and Jordan Company announced a new agreement to market their respective products in China on July 18 (7/18), February 12 (2/12), and October 7 (10/7), respectively. Given the information below, calculate the cumulative abnormal return (CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return. (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place.)
| Ross Co. | Westerfield, Inc. | Jordan Company | ||||||||
| Date | Market Return |
Company Return |
Date | Market Return |
Company Return |
Date | Market Return |
Company Return |
||
| 7/12 | -0.6 | -0.3 | 2/8 | -0.6 | -0.3 | 10/1 | 1.4 | 0.6 | ||
| 7/13 | 1.2 | 0.3 | 2/9 | -0.7 | -0.3 | 10/2 | 1.3 | 0.6 | ||
| 7/16 | 0.4 | 0.3 | 2/10 | 0.4 | 0.6 | 10/3 | 0.7 | 1.3 | ||
| 7/17 | -0.6 | -0.2 | 2/11 | 0.6 | 2.1 | 10/6 | -0.1 | -0.7 | ||
| 7/18 | -0.8 | 1.3 | 2/12 | -0.1 | 0.1 | 10/7 | -2.2 | -0.7 | ||
| 7/19 | -1.9 | -0.1 | 2/15 | 1.2 | 1.9 | 10/8 | 1.2 | 0.6 | ||
| 7/20 | -0.9 | -0.3 | 2/16 | 0.7 | 0.5 | 10/9 | -0.5 | -0.6 | ||
| 7/23 | 0.6 | 0.4 | 2/17 | -0.1 | 0 | 10/10 | 0.1 | -0.1 | ||
| 7/24 | 1.2 | 0 | 2/18 | 1.6 | 0.4 | 10/13 | -0.1 | -0.6 | ||
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In: Finance
Ross Co., Westerfield, Inc., and Jordan Company announced a new agreement to market their respective products in China on July 18 (7/18), February 12 (2/12), and October 7 (10/7), respectively. Given the information below, calculate the cumulative abnormal return (CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return.(A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place.)
| Ross Co. | Westerfield, Inc. | Jordan Company | ||||||||
| Date | Market Return |
Company Return |
Date | Market Return |
Company Return |
Date | Market Return |
Company Return |
||
| 7/12 | -0.1 | -0.9 | 2/8 | -0.6 | -0.9 | 10/1 | 0.4 | 0.5 | ||
| 7/13 | 0.2 | 0.3 | 2/9 | -0.7 | -0.9 | 10/2 | 0.3 | 0.5 | ||
| 7/16 | 0.5 | 0.7 | 2/10 | 0.5 | 0.6 | 10/3 | 0.8 | 1.3 | ||
| 7/17 | -0.6 | -0.2 | 2/11 | 0.7 | 1.1 | 10/6 | -0.1 | -0.8 | ||
| 7/18 | -1.8 | 1.3 | 2/12 | -0.1 | 0.1 | 10/7 | -2.3 | -0.8 | ||
| 7/19 | -0.9 | -0.5 | 2/15 | 1.2 | 1.5 | 10/8 | 0.2 | 0.4 | ||
| 7/20 | -0.9 | -0.2 | 2/16 | 0.7 | 0.6 | 10/9 | -0.5 | -0.5 | ||
| 7/23 | 0.6 | 0.4 | 2/17 | -0.1 | 0 | 10/10 | 0.1 | -0.1 | ||
| 7/24 | 0.2 | 0 | 2/18 | 0.6 | 0.4 | 10/13 | -0.1 | -0.6 | ||
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In: Finance
Rider Co. makes automobile parts for sale to major automobile manufacturers in the United States. The following information is available regarding internal controls over machinery and equipment:
When a departmental supervisor needs a new item of machinery or equipment, he or she must initiate a purchase request. The acquisition proposal must be presented to the plant manager. If the plant manager agrees with the need, he must review the corporate budget allocation for his plant to determine the availability of funds to cover the acquisition. If the allocation is sufficient, the departmental supervisor is notified of the approval and a purchase requisition is prepared and forwarded to the purchasing department.
Upon receipt of a purchase requisition for machinery and equipment, the purchasing department researches the company records in order to locate an appropriate vendor. A purchase order is then completed and mailed to the vendor. As soon as new machinery or equipment is received from the vendor, it is immediately sent to the department for installation. Bellott’s policy is to place new assets into service as soon as possible so that the company may immediately begin to realize the economic benefits from the acquisition. The property accounting department is responsible for maintaining property, plant, and equipment ledger control accounts. The ledger is supported by lapsing schedules that are used to compute depreciation. These lapsing schedules are organized by year of acquisition so that depreciation computations can be prepared in units that combine all assets of the same type that were acquired the same year. Standard depreciation methods, rates, and salvage values were determined ten years ago and have been used consistently since that time.
When machinery or equipment is retired or replaced, the plant manager notifies the property accounting department so that the proper adjustments can be made to the ledger and lapsing schedules. No regular reconciliation between the physical assets on hand and the accounting records has been performed.
Required:
Identify any internal control weaknesses and suggest improvements to strengthen the internal controls over machinery and equipment at Rider.
In: Accounting
Why did America negotiate the Gadsden Purchase with Mexico?
Select one:
a. The United States could exploit rich iron deposits in northern Mexico.
b. The United States could acquire more slave-owning territory.
c. The Mexican government could obtain more hard currency.
d. The United States cold acquire the most advantageous southern route for a railroad to California.
In: Economics