26. The graphical relationship among interest rates on bonds with identical default risk but different maturities is called the
    A. risk structure of interest rates.
    B. liquidity structure of interest rates.

    C. yield curve.
    D. bond demand curve.

27. Compared to interest rates on long-term U.S. government bonds, interest rates on three-month Treasury bills fluctuate ________ and are ________ on average.
    A. more; lower
    B. less; lower

    C. more; higher D. less; higher

28. The term structure of interest rates is

    1. the relationship among interest rates of different bonds with the same risk and

       maturity.

    2. the structure of how interest rates of the same maturity move over time.

    3. the relationship among the terms to maturity of different bonds from different

       types of issuers (municipal, corporate, treasury, etc.)

    4. the relationship among interest rates on bonds with different maturities but

       similar credit and liquidity risk.

29. Which of the following bonds usually trades at the highest market interest rate? A. 1 year C U.S. Treasury bonds
    B. 5 year U.S. Treasury bonds
    C. 10 year U.S. Treasury bonds

    D. 30 year U.S. Treasury bonds

30. According to the expectations theory of the term structure,

    1. when the yield curve is steeply upward-sloping, short-term interest rates are

       expected to rise in the future.

    2. when the yield curve is downward-sloping, short-term interest rates are expected

       to decline in the future.

    3. buyers of bonds prefer short-term to long-term bonds.

    4. all of the above.

    5. only A and B of the above.

31. The market consensus of the expected path of one-year interest rates over the next four years is:

    5% in Year 1 (current 1 year rate) 4% in Year 2
    2% in Year 3
    1% in Year 4

    Considering this projection, what would the current yield of the current bond maturing in four-years be under the pure expectations theory?
    A. 2 percent.
    B. 3 percent.

    C. 4 percent. D. 5 percent. E. 6 percent.

32. The current market interest rate of a 4 year bond is 9% and the forecasted path of 1- year interest rates over the next 3 years is:

    6% in Year 1 (current 1 year rate) 7% in Year 2
    8% in Year 3

    Considering this projection, what would the projected 1-year rate be 3 years from today (the fourth year of the rate forecast above) under the pure expectations theory?
    A. 7%
    B. 7.25%

    C. 15%
    D. 15.25%

33. According to the market segmentation theory of the term structure,

    1. the interest rate for bonds of one maturity is determined by the supply and

       demand for bonds of that maturity.

    2. bonds of one maturity are not substitutes for bonds of other maturities;

       therefore, interest rates on bonds of different maturities do not move together

       over time.

    3. investors' strong preference for short-term relative to long-term bonds explains

       why yield curves typically slope upward.

    4. all of the above.

    5. none of the above.

34. The liquidity premium theory of the term structure

    1. indicates that today's long-term interest rate equals the average of short-term

       interest rates that people expect to occur over the life of the long-term bond.

    2. assumes that bonds of different maturities are perfect substitutes.

    3. suggests that markets for bonds of different maturities are completely separate

       because people have different preferences.

    4. none of the above.

35. Under the _____________________ a flat yield curve is an indication that the market is expecting short term rates to __________ in the future.
    A. Liquidity Premium Theory | decrease
    B. Liquidity Premium Theory | stay the same

    C. Pure Expectations Theory | decrease
    D. Pure Expectations Theory | stay the same E. AandC
    F. AandD
    G. BandC
    I. BandD

36. If the yield curve has a mild upward slope, the liquidity premium theory indicates that the market is predicting

    1. a rise in short-term interest rates in the near future and a decline further out in

       the future.

    2. constant short-term interest rates in the near future and further out in the

       future.

    3. a decline in short-term interest rates in the near future and a rise further out in

       the future.

    4. a decline in short-term interest rates in the near future and an even steeper

       decline further out in the future.

37. Which theory of the term structure proposes that bonds of different maturities are not substitutes for one another?
    A. market segmentation theory
    B. expectations theory

    C. liquidity premium theory D. separable markets theory

38. Since yield curves are usually upward sloping, the ______________ indicates that, on average, people tend to prefer holding short-term bonds to long-term bonds.
    A. market segmentation theory
    B. expectations theory

    C. liquidity premium theory D. both A and B of the above E. both A and C of the above

Bob Jensen Inc. purchased a $480,000 machine to manufacture specialty taps for electrical equipment. Jensen expects to sell all it can manufacture in the next 10 years. To encourage capital investments, the government has exempted taxes on profits from new investments. This legislation is to be in effect for the foreseeable future. The machine is expected to have a 10-year useful life with no salvage value. Jensen uses straight-line depreciation. Jensen uses a 8% discount rate in evaluating capital investments, the investment is subject to taxes, and the projected pretax operating cash inflows are as follows:

Jensen has been paying 25% for combined federal, state, and local income taxes, a rate that is not expected to change during the period of this investment. The firm uses MACRS depreciation. The asset qualifies as a 5-year property. (Use Exhibit 12.4)

Required:

Compute the following for the proposed investment:

1. Its payback period (in years) under the assumption that the cash inflows occur evenly throughout the year. (Do not round intermediate calculations. Round your final answer to 1 decimal place.)

2. Its accounting (book) rate of return based on (a) the initial investment, and (b) an average investment (calculated here as a simple average of the 10 average annual book values; for each year, the average book value is the sum of the beginning-of-year and end-of-year book value, divided by two; note: the average book value for each of the last four years is $0). (Round your final answers to 1 decimal place.)

3. Its estimated net present value (NPV). Use the built-in NPV function in Excel. (Round your final answer to nearest whole dollar amount.)

4. Its internal rate of return (IRR). Use the built-in IRR function in Excel. (Round your final answer to 1 decimal place.)

5. Its modified internal rate of return (MIRR). (Round your answer to 1 decimal place.) (In conjunction with this question, you might want to consult either of the following two references: MIRR Function and/or IRR in Excel.)

This is the Matlab practice so needs Matlab code
2. Numerical Integration
Consider an industrial tank in the shape of an inverted cone. The radius of the tank at the top rim is 3 m, and the total height of the tank is 4 m.
The volume of the tank in m3 is given by: V = (1/3) R2 H.
The volume of liquid in the tank when filled to a height h measured from the bottom vertex is:
V = (1/3)pi* (R/H)2 h3
The Lab will consist of a single script, divided in two parts. In each part, the filling schedule will be different. A filling schedule is a function that provides flow rate, in m3 / h, as a function of time.
In Part I, your script will calculate the level of the liquid, h, after a two-hour filling schedule is completed. The filling schedule for Part I, Schedule I, is as follows:
During the first 30 minutes, the flow rate will increase linearly from zero to 10 m3 / h
During the following 60 minutes, the flow rate will stay constant at 10 m3 / h
During the last 30 minutes, the flow rate will decrease linearly from 10 m3 / h down to zero
In Part II, your script will calculate the time it takes to completely fill the tank with a different filling schedule, Schedule II, given by the equation:
Flow Rate (m3 / h) = 10 (1 - e-2t ) m3 / h
where t is time in hours, and the exponent, 2t, is dimensionless
Part I:
The volume of liquid calculated in Part I, from which the height of the liquid in the tank will be calculated, should be obtained by using the built-in function to integrate polynomials, polyint( )
Part I generates a single output to the console: "The height of the liquid after Schedule I is ____ meters."
Part II:
In Part II, your script first defines Schedule II as an anonymous function
In Part II your script calculates the volume at a given time by integrating Schedule II using the built-in function quad( )
For Option A, it is acceptable to use a loop to find the time at which the tank gets completely full. If you will use an iterative approach, check the tank volume in 0.01 hour steps
Part II generates a single output to the console: "The time required to fill up the tank with Schedule II is ____ hours."

As a technical sales engineer, Avery is responsible for selling her company’s integrated circuit test systems. Each of these systems costs approximately one million dollars and Avery’s sales goals are to sell at least ten of these systems per revenue quarter.

These sales expectations are in place because Avery’s company is trying to go public (IPO). In order to do so, they must be profitable for five quarters in a row. Therefore, there is enormous pressure from the company’s investors and board to meet the assigned sales goals.

As the end of the fifth quarter approaches, Avery realizes she is one sale short of reaching her goal. When she approaches her manager to let him know that she will not be meeting her goals, he explains to her a way to get around the problem. He tells her that when he was a sales engineer, he would approach customers who he knew would soon be purchasing a system. He would get the customer to place the order and receive a price discount if they come to the factory, be shown an empty shell of a system that was not yet built, and sign paperwork documenting their acceptance of the unbuilt system as if it was already built. That way the order could count as part of this quarter’s profits, but the customer would not have to pay for the order until the next quarter.

Avery’s manager explains that when he was a salesperson the practice was a common way of meeting sales goals. Additionally, he suggests to Avery that he would look the other way if she were to falsify a customer acceptance report and reminds her that the company will only be able to go public if she meets her sales goal. If she fails to meet her goal, the IPO will be postponed at least a year and so will her IPO profits and the profits of all the other employees and shareholders.

a.       List the main reasons Avery has for going along with her manager and the reasons why she should not.

b. You now need to determine what Avery should do and to justify your judgement. To justify your judgement provide a principle that will make the reasons you side with (from a) more important than the reasons for Avery not doing what you think she she do.

c. Now justify your principle -- Why non-selfish reasons does anyone have for accepting this principle?

Write a program in JAVA

"When a share of common stock of some company is sold, the capital gain(or,sometimes, loss) is the difference between the share’s selling price and the price originally paid to buy it. This rule is easy to understand for a single share, but if we sell multiple shares of stock bought over a long period of time, then we must identify the shares actually being sold. A standard accounting principle for identifying which shares of a stock were sold in such a case is to use a FIFOprotocol—the shares sold are the ones that have been held the longest (indeed,this is the default method built into several personal finance software packages).For example, suppose we buy 100 shares at $20 each on day 1, 20 shares at $24on day 2, 200 shares at $36 on day 3, and then sell 150 shares on day 4 at $30each. Then applying the FIFO protocol means that of the 150 shares sold, 100were bought on day 1, 20 were bought on day 2, and 30 were bought on day3. The capital gain in this case would therefore be 100·10+20·6+30·(−6),or $940. Write a program that takes as input a sequence of transactions of the form “buy x share(s) at $y each” or “sell x share(s) at $y each,” assuming that the transactions occur on consecutive days and the values x and y are integers. Given this input sequence, the output should be the total capital gain(or loss) for the entire sequence, using the FIFO protocol to identify shares."

Your program should prompt the user to input a single string that represents a sequence of transactions. Use semicolon (‘;’) to separate the transactions in your input string. For example, your program should support the following input string:

“buy 100 share(s) at $20 each;buy 20 share(s) at $24 each;buy 200 share(s) at $36 each;sell 150 share(s) at $30 each;buy 50 share(s) at $25 each;sell 200 share(s) at $35 each;”

The output of your program should be the total capital gain (or loss) for the entire sequence, using the FIFO protocol as explained in P-6.36. For instance, the output for the example input should be: 1070

• Consider using built-in Java classes, e.g., classes that implement the interface java.util.Queue

1. The relationship between Laptop and Screen can best be categorized as
   1. Inheritance
   2. Association
   3. Ownership
   4. Private

2. What is the purpose of information hiding in object-oriented programming?
   1. To protect the values of variables from being changed inappropriately
   2. To free other programmers from having to know too many details of the inner workings of the class.
   3. To protect people’s personal information from hackers?
   4. All of the above
   5. Just choices a and b

3. The relationship between Bayonet and Weapon could best be described as
   1. Inheritance
   2. Association
   3. Ownership
   4. Private

4. Which of the following is not true of the relationship composition?
   1. The owner is responsible for creating and destroying the object it owns
   2. Other objects of the owner type can own the very same object.
   3. It involves exclusive ownership, meaning that no other object could own the owned object.
   4. It, like aggregation, is a form of ownership.

5. In the relationship between Hammer and Tool, which is the superclass and which is the subclass?

6. Which of the following is a false statement?
   1. A class is like a blueprint, and an object is something built according to that blueprint.
   2. A class can contain data members and methods.
   3. A class can contain objects as data members within it.
   4. Usually, only one object can be built for any given class.

7. Which of the following is false about an abstract class?
   1. It contains one or more abstract functions.
   2. You cannot create an object of an abstract class.
   3. It cannot have any non-abstract functions.
   4. It is the most generic version of a family of related types of things.

8. Why is polymorphism powerful?
   1. It enables us to refer to related objects generally but still access specific functionality for each object.
   2. It enables us to build more complicated objects starting from simpler ones.
   3. It helps us protect data from being inadvertently changed.
   4. It helps us build objects that contain other objects.

9. Why do we write public get and set functions?
   1. Object-oriented languages require us to do so.
   2. If we didn’t, there would be no way to read or write the values of the data members of a class.
   3. In combination with making data private, these public functions give us a way to read and write the values of these variables in a controlled way.
   4. They make a program run more efficiently.

10. Draw a UML diagram for the following system: A cell phone is a type of computing device. It has a screen, usb jack, power button, and wake button. Include data members and methods for the classes you define, and show the appropriate relationships

So Bob and Terry are friends who grew up in California. There is a free ticket to Coachella near Indio being offered by a radio station. Both friends call in separately and the radio station tell them that they won it. A Coachella ticket can cost anywhere from $600 for GA ( general admission) all the way to $2000 for VIP per person. Getting one of those tickets is quite expensive! So Bob and Terry both go down to the radio station to pick up their ticket and do not tell the other person, all because there is only one ticket. What a surprise when they both show up at the radio station expecting to get their ticket and neither person told the other of what was going on. Both people are perplexed at this issue and go to the radio station for them to settle the issue. The station said that they made a mistake and only had room in their budget for one ticket. Bob says, "Terry, you are a good friend. You go ahead and enjoy the concert." Terry takes the ticket and says "Thank you!" So now Terry takes the ticket and goes to Coachella. Upon entering the stage area, a biker with very large spikes walks through the crowd. He trips over Terry and then punches him right in the mouth, saying "move!".Terrys gets mad, calls him an SOB and hits him back causing a scar on Biker's cheek. Terry had a cracked jaw because of the encounter and sues Biker for assault and battery. Biker countersues Terry for defamation.

Questions:

1. Did Biker commit an intentional tort against Terry. If so, which one?

2. Did Terry commit an intentional tort against Biker? If so, which one?

3. Are there any defenses against these torts that would vitiate the conduct described in this story?

4. Who is going to win this case?

RESPOND TO THE FOLLOWING EITHER AGREEING DISAGREEING OR ADDING ADDITIONAL KNOWLEDGE.

Open market operations or OMOs are the purchase and sale of securities in the open market by a central bank. This is one of the three main policy tools that the federal reserve uses for monetary policy. Monetary policy "refers to the actions undertaken by a central bank to influence the availability and cost of money and credit to help promote national economic goals." In the original text, it discusses how the near-zero target range for the federal funds rate has changed the way OMOs are used. The federal reserve expanded their holdings of longer-term securities in order to put downward pressure on long term interest rates. This was done to support economic activity and to foster an environment that would lead to job creation through more accommodative financial conditions.

To put the idea of open market operations into easier to understand terms you could say that the central bank is able to increase the money supply and lower market interest rates by purchasing securities using newly created money. On the other hand, the central bank can always sell securities from the balance sheet to take money out of circulation and raise interest rates. The two goals set the fed have when either selling or buying securities are thus, expansionary and contractionary. When the fed is trying to expand it wants to pour money into the banks which then pressures the banks to lend more money to consumers. This creates competition between the banks and subsequently lowers the rates. When the fed is trying to contract is does the opposite and this raises the interest rates and lowers consumer spending.  

Open market operations have long been one of the strongest tools in the box for the fed and understanding how they work will give you a better sense of the banking environment.

Appendix F:  Willow Wade Information

For your sixth client, your boss wants you to prepare Form 1040, Schedule C, and SE for Willow Wade.

Facts:

Willow Wade is a successful, 30-year old attorney.   She has a law office near the circuit court building on Smith Court and a home office. The home office is one of the bedrooms in her 4-bedroom home in Aiea, HI.   She is on the cash method.  

Prepare Form 1040, Schedule C, and SE for her self-employment taxes.

Which statement is true?

Select one:

a. To have economic growth, we must have zero unemployment.

b. On the production possibilities frontier, unemployment is zero percent.

c. To get out of a recession, we must move to some point closer to the production possibilities frontier.

d. On the production possibilities frontier, 85 percent of the labor force is employed.

Which of the following is true?

Select one:

a. Keynes suggested that savers save and investors invest for different reasons.

b. According to Keynes, an equilibrium below full employment was a rare occurrence.

c. To fight a depression, Keynes said that the government should spend money on carefully chosen projects.

d. Keynes believed the economy was basically stable.

Which is the most accurate statement?

Select one:

a. Our trade problems with Japan and China are very similar.

b. Our trade deficits with Japan and China account for almost our entire trade deficit.

c. If Japan and China traded fairly, our trade deficits with those two countries would disappear.

d. Japanese markets have been at least somewhat closed to imports.

Which statement is true?

Select one:

a. X_n had been positive from 1900 until the 1970s.

b. X_n has always been negative.

c. X_n has always been positive.

d. X_n had been negative from 1900 until the 1970s.

Which of the following statements is FALSE?

Select one:

a. Until the early 1980s Americans were investing much more in foreign countries than foreigners were in the U.S.

b. Our capital and current accounts add up to zero.

c. None of these is false.

d. Foreigners have reinvested most of the dollars they have earned trading with us in U.S. government and corporate securities, real estate, and direct investment in plant and equipment.

Which of the following statements is true?

Select one:

a. Virtually all of the poor receive food stamps, but not public assistance.

b. Virtually all of the poor receive public assistance and food stamps.

c. None of these is true.

d. Virtually all of the poor receive public assistance, but not food stamps.

Which of the following is true?

Select one:

a. Southern manufacturers benefited from high protective tariffs of the 19th century that kept out cheaper Japanese manufactured goods.

b. The completion of the transcontinental railroad system in the 1880s eventually made the U.S. the world's first mass market.

c. Agricultural inventions such as John Deere's steel plows did little to improve farm productivity.

d. The canal system linking east-coast rivers with the Great Lakes in the 1820s created an "American economy" rather than just a series of regional economies located in one country.

Which of the following statements is true?

Select one:

a. Every nation should try to be completely self-sufficient.

b. The basis for international trade is specialization.

c. International trade lowers our standard of living.

d. Importing consumer products increases our prices.

Which statement is true?

Select one:

a. Most taxpayers pay more in payroll tax than in personal income tax.

b. A person earning $100,000 pays $10,000 in payroll tax.

c. The Medicare tax rate is 6.2 percent.

d. There is no such thing as a regressive tax.

Which statement is true?

Select one:

a. To have economic growth, we must have zero unemployment.

b. On the production possibilities frontier, unemployment is zero percent.

c. To get out of a recession, we must move to some point closer to the production possibilities frontier.

d. On the production possibilities frontier, 85 percent of the labor force is employed.