Suppose you are the CEO of Nike and the world is coping with an economic recession. Would you change the corporate strategy? If so, what changes would you make and why? If not, why not?

2. Based on the Slutsky Equation and relevant theorems, discuss in your own words about the reactions of quantity demanded to price and income changes (Law of Demand - Theorem 1.13).

The Boys of Summer

Which baseball league has had the best hitters? Many of us have heard of baseball greats like Stan Musial, Hank Aaron, Roberto Clemente, and Pete Rose of the National League and Ty Cobb, Babe Ruth, Ted Williams, Rod Carew, and Wade Boggs of the American League. But have you ever heard of Willie Keeler, who batted .432 for the Baltimore Orioles, or Nap Lajoie, who batted .422 for the Philadelphia A’s? The batting averages for the batting champions of the National and American Leagues are given on the CourseMate Web site.

The batting averages for the National League begin in 1876 with Roscoe Barnes, whose batting average was .403 when he played with the Chicago Cubs. The last entry for the National League is for the year 2010, when Carlos Gonzalez of the Colorado Rockies averaged .336. The American League records begin in 1901 with Nap Lajoie of the Philadelphia A’s, who batted .422, and end in 2010 with Josh Hamilton of the Texas Rangers, who batted .359. How can we summarize the information in this data set?

Questions to be answered in your report –

1. Use MS Excel, MINITAB, or another statistical software package to describe the bat- ting averages for the American and National League batting champions. Generate any graphics that may help you in interpreting these data sets.
2. Does one league appear to have a higher percentage of hits than the other? Do the batting averages of one league appear to be more variable than the other?
3. Are there any outliers in either league?
4. Summarize your comparison of the two baseball leagues.

Consider the effects of inflation in an economy composed of only two people: Jake, a bean farmer, and Latasha, a rice farmer. Jake and Latasha both always consume equal amounts of rice and beans. In 2016 the price of beans was $1, and the price of rice was $4.

Suppose that in 2017 the price of beans was $2 and the price of rice was $8.

Inflation was ______%

.

Indicate whether Jake and Latasha were better off, worse off, or unaffected by the changes in prices.

Now suppose that in 2017 the price of beans was $2 and the price of rice was $4.80.

In this case, inflation was ______%

.

Indicate whether Jake and Latasha were better off, worse off, or unaffected by the changes in prices.

Now suppose that in 2017, the price of beans was $2 and the price of rice was $1.60.

In this case, inflation was _______%

.

Indicate whether Jake and Latasha were better off, worse off, or unaffected by the changes in prices.

What matters more to Jake and Latasha?

The overall inflation rate or The relative price of rice and beans?

Investments

Assume you have been tasked with pricing a security. Select a pricing model, which can be CAPM itself or any multifactor specification, including the Fama French version. Defend your choice of pricing model. If you are specifying a multifactor model, explicitly state the risk factors you would include (e.g., GDP changes, energy prices, etc.)Assume you have been tasked with pricing a security. Select a pricing model, which can be CAPM itself or any multifactor specification, including the Fama French version. Defend your choice of pricing model. If you are specifying a multifactor model, explicitly state the risk factors you would include (e.g., GDP changes, energy prices, etc.)Assume you have been tasked with pricing a security. Select a pricing model, which can be CAPM itself or any multifactor specification, including the Fama French version. Defend your choice of pricing model. If you are specifying a multifactor model, explicitly state the risk factors you would include (e.g., GDP changes, energy prices, etc.)

60 Glazer Company is a small manufacturing firm with 60 employees in seven departments. When the need arises for new workers in the plant, the departmental manager interviews applicants and hires on the basis of those interviews. The manager has each new employee complete a withholding form. The manager then writes the rate of pay on the W‐4 and forwards it to payroll. When workers arrive for their shift, they pull their time cards from a holder near the door and keep the time card with them during the day to complete the start and end times of their work day. On Friday, the time cards are removed from the holder and taken to payroll by any employee who is not busy that morning. If there were any pay rate changes for the payroll period due to raises or promotions, the manager calls the payroll department to inform payroll of these rate changes. Using the rate changes and the time cards, the payroll department prepares the checks from the regular bank account of the Glazer Company. The manager of the payroll department signs the checks, and the checks are then forwarded to each department manager for distribution to employees. Required: Describe any improvements you would suggest to strengthen the payroll internal controls at Glazer.

5. Problems and Applications Q5

Consider the effects of inflation in an economy composed of only two people: Jacques, a bean farmer, and Kyoko, a rice farmer. Jacques and Kyoko both always consume equal amounts of rice and beans. In 2016 the price of beans was $1, and the price of rice was $4.

Suppose that in 2017 the price of beans was $2 and the price of rice was $8.

Inflation was.

Indicate whether Jacques and Kyoko were better off, worse off, or unaffected by the changes in prices.

Now suppose that in 2017 the price of beans was $2 and the price of rice was $4.80.

In this case, inflation was.

Indicate whether Jacques and Kyoko were better off, worse off, or unaffected by the changes in prices.

Now suppose that in 2017, the price of beans was $2 and the price of rice was $1.60.

In this case, inflation was.

Indicate whether Jacques and Kyoko were better off, worse off, or unaffected by the changes in prices.

What matters more to Jacques and Kyoko?

The relative price of rice and beans

The overall inflation rate

Consider the effects of inflation in an economy composed of only two people: Manuel, a bean farmer, and Poornima, a rice farmer. Manuel and Poornima both always consume equal amounts of rice and beans. In 2016 the price of beans was $1, and the price of rice was $4.

Suppose that in 2017 the price of beans was $2 and the price of rice was $8.

Inflation was __%?

.

Indicate whether Manuel and Poornima were better off, worse off, or unaffected by the changes in prices.

Now suppose that in 2017 the price of beans was $2 and the price of rice was $4.80.

In this case, inflation was __%?

.

Indicate whether Manuel and Poornima were better off, worse off, or unaffected by the changes in prices.

Now suppose that in 2017, the price of beans was $2 and the price of rice was $1.60.

In this case, inflation was __%?

.

Indicate whether Manuel and Poornima were better off, worse off, or unaffected by the changes in prices.

What matters more to Manuel and Poornima?

- The relative price of rice and beans

- The overall inflation rate