Betas and risk rankings   Personal Finance Problem   You are considering three stocks A, B, and C — for possible inclusion in your investment portfolio. Stock A has a beta of 1.5, stock B has a beta of 1.2, and stock C has a beta of −0.3.

a. Rank these stocks from the most risky to the least risky.

b.  If you believed that the stock market was getting ready to experience a significant decline, which stock should you add to your portfolio?

c.  If you anticipated a major stock market rally, which stock would you add to your portfolio?

a.  Which stock is the most risky one? (Select the best answer below.) A. Stock Upper AStock A B. Stock Upper BStock B C. Stock Upper C

Forecasting 1. Demand data collected on yearly registrations for a Six Sigma seminar at the Quality College are shown in the following table

a. Estimate (forecast) demand again for years 4-12 with a 3-year weighted moving average in which registrations in the most recent year are given a weight of 0.50, 0.25, and 0.25.

b. Estimate (forecast) demand again for years 1-12 using exponential smoothing with a smoothing constant of 0.3. To being, assume that the forecast for year 1 was 5,000 people.

c. Compute the MAD forecasting error for each forecast. Which forecast is better?

1. As part of a major plant renovation project, the industrial engineering department has been asked to balance a revised assembly operation to achieve an output of 240 units per eight-hour day. Task times and precedence relationships are as follows:

1. Draw the precedence diagram.
2. Determine the minimum cycle time, the maximum cycle time, and the calculated cycle time.
3. Determine the minimum number of stations needed.
4. Assign tasks to workstations on the basis of most following tasks. Use longest processing time as a tiebreaker. If ties still exist, assume indifference in choice.
5. Compute the percentage of idle time for the assignment in part d.

. The “beta” value of Amazon shares is about 1.7. The “beta” value of WalMart shares is about 0.3. According to Standard and Poors, WalMart’s bond rating is AA and Amazon’s rating is AA!.

1. What does the difference in beta values indicate?
2. What does the difference in bond ratings indicate?
3. What is meant by the riskiness of a stock? Can you determine, from the information provided, which of the two stocks is “riskier”?
4. Based on the information provided, do you expect Amazon stock or WalMart stock to produce a higher rate of return for the stockholder, or are the indications ambiguous?
5. Suppose that you had private information indicating that the economy is about to go into recession, information that you believe has not yet been incorporated into stock prices. How could this change your answer to part (d)?

Hudson Corporation is considering three options for managing its data processing operation: continuing with its own staff, hiring an outside vendor to do the managing, or using a combination of its staff and an outside vendor. The profit of the corporation depends on future demand. The annual profit of each option (in thousands of dollars) depends on demand as follows: Demand Staffing Options High Median Low Own staff 650 650 600 Outside vendor 900 600 300 Combination 800 650 500 a. Construct a decision tree. b. Recommend a decision based on the use of the optimistic, conservative, and minimax regret approaches (show steps). c. If the demand probabilities are 0.2, 0.5, and 0.3, respectively for High, Median, and Low demands, use the expected value approach to determine the optimal decision (show steps)

Monthly demand for a hot pizza restaurant is given as follows for 1 year (12 months). Estimate the demand including the next two months (13 and 14) by using Holt's and Exponential Smoothing methods. Compare the methods with MSE, MAD, and MAPE metrics, and discuss the superior method.

Use alpha=0.05 and beta=0.1 for Holt's model and use alpha=0.3 for exponential smoothing model. Hint: Level and trend in Holt's method could be obtained with regression. L0 in exponential smoothing is the average demand for the 12-month period.

2. I stand outside the student union and conduct a poll of passing students about their favorite fast food place. There are 6 response options = McDonald's, Wendy's, Burger King, Taco Bell, Popeye's, and Arby's. I also collect the student's year in school for demographic purposes - 5 levels - First Year, Sophomore, Junior, Senior, and Grad Student. I build a two-way table of this data to prepare to conduct a Chi-square analysis. How many degrees of freedom would my analysis have?

Group of answer choices:

6

35

20

5

1

3. The expected values for a Chi-Square Test of Independence come from:

Group of answer choices:

the population values

the marginals

a chi-square table

4. I conduct the Chi-Square test of independence for my Fast Food poll and obtain an observed Chi-square value of 22.55. The chisq-test() in R also reports a p-value of 0.3114. How do I interpret this result if my alpha is 0.05?

Group of answer choices

I fail to reject the null hypothesis and therefore determine that there is a significant association between fast food preference and class year.

I fail to reject the null hypothesis and therefore conclude that there is no association between class year and favorite fast food restaurant.

I reject the null hypothesis and conclude that there is a significant association between fast food preference and class year.

I reject the null hypothesis and conclude that there is no association between the variables fast food preference and class year.

5. My student union poll included another question regarding the preference for different dog breeds. I find a significant association between preferred dog breeds and gender of the students. I calculate a Cramer's V test and get a result of 0.05. What conclusion would I make about this result?

Group of answer choices:

The Cramer's V score disproves our statistical significant finding.

The Cramer's V value further proves that the result is significant.

The result was statistically significant, but not substantively significant.

6. I decide to conduct another poll outside the student union, and I want to ensure that my poll will have a low probability of Type II error and will be able to detect a difference with a large effect size. I run the following code:

pwr.chisq.test(w = 0.3, N=NULL, df = 20, sig.level = 0.05, power = 0.8)

I get the following output in R:

Chi squared power calculation

w = 0.3
N = 232.8977
df = 20
sig.level = 0.05
power = 0.8

What does this output tell me about how I need to design my next poll.

Group of answer choices

My new poll needs a power of 0.8 to have an effect size of 0.3.

A sample size of 230 should be sufficient for my poll.

Since I set my sample size at 233 I will achieve a power of 0.8.

I need a sample size of 233 students to obtain a result with the power I desire to have in my analysis.

7. The area under the curve of a normal distribution is equal to:

Group of answer choices

the mean of the distribution

a probability of 1.0

the standard deviation of the distribution.

the z-score

8. In my student union poll I asked students what they scored on the SAT. I know that the mean score of the UMD population is 1340 with a standard deviation of 222. My friend wants to know how her score of 1280 stacks up to the distribution of all scores at UMD.

What is her z-score?

Group of answer choices

-0.53

-1

0.27

-0.27

9. Another friend asked me to calculate his z-score so he could see how he compared to the distribution of SAT scores among UMD students. I found that his z-score was 0.33. What is the interpretation of his z-score?

Group of answer choices

He scored 3 SDs higher than the mean.

He scored better than 33% of students at UMD.

His SAT score shows he was 1/3 of an SD above the mean score.

He did worse than 33% of students at UMD.

10. We have more fitness test data from Vitor (who is male) and Manuela (who is female), who are applying to a military academy. Vitor did 50 push-ups in a minute, while Manuela only did 45.

We know that among previous applicants to the academy, the distribution of number of sit-ups is as follows:

Males have a mean of 60 and a standard deviation of 6.5.

Females have a mean of 40 and a standard deviation of 4.3.

What is the z-score for Manuela's result on the test?

Group of answer choices

1.16

1.69

-0.92

3.49

11. Vitor did 50 push-ups in a minute, while Manuela only did 45.

We know that among previous applicants to the academy, the distribution of number of sit-ups is as follows:

Males have a mean of 60 and a standard deviation of 6.5.

Females have a mean of 40 and a standard deviation of 4.3.

What is the z-score for Vitor's result on the test?

Group of answer choices:

0

2.33

-1.16

-1.54

12. Vitor did 50 push-ups in a minute, while Manuela only did 45.

We know that among previous applicants to the academy, the distribution of number of sit-ups is as follows:

Males have a mean of 60 and a standard deviation of 6.5.

Females have a mean of 40 and a standard deviation of 4.3.

Relative to their gender, who did better on the push-up test, Vitor or Manuela?

Group of answer choices:

Manuela

Vitor

MacKenzie Company sold $360 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 1.0% service charge for sales on its credit cards and credits MacKenzie's account immediately when sales are made. The journal entry to record this sale transaction would be:

• Debit Cash of $360 and credit Sales $360.

• Debit Cash of $360 and credit Accounts Receivable $360.

• Debit Accounts Receivable $360 and credit Sales $360.

• Debit Cash $356.40; debit Credit Card Expense $3.60 and credit Sales $360.

• Debit Cash $356.40 and credit Sales $356.40.

Suppose the demand is a typical downward sloping linear curve and the supply curve is perfectly price elastic. If 3 million tickets are currently sold at a price of $5, approximately how much tax revenue could the government generate from a $1 per unit tax on sellers? The arc-price elasticity of demand between P=$5 and the new equilibrium price is -1.0 (Note: dQ = Change in Q and dP=Change in P)

i. Draw a completely labeled D&S graph to show the market described above.

ii. Calculate new quantity and the tax revenue. Please show your calculations.

In a driven reaction between 1 mole of NaOH and 1 mole of H2C3H2O4 identify the species of interest present in the solution as we add NaOH and state how to handle that solution to determine pH.

a. Before adding NaOH: H2C3H2O4 is the only thing present which will then undergo an equilibrium process and we can use an ice table to determine pH. Since it is a diprotic acid, we might need two ice tables.

b. After adding 0.5 mole of NaOH:

c. After adding 1.0 mole of NaOH:

d. After adding 1.5 mole of NaOH:

e. After adding 2.0 mole of NaOH: