Question 2

Suppose that the annual returns on two shares are perfectly negatively correlated and that ?=0.07, ?

?= 0.20,?= 0.12 , and ?= 0.5. Assuming that there are no arbitrage opportunities, by using ???

the Goal Seek function (excel) calculate the weight (proportion) of the two assets that produce the lowest portfolio variance? (Use the Goal Seek function)

MAYBANK

PETRONAS

1. A random sample of 64 second graders in a certain school district are given a standardized mathematics skills test. The sample mean score is 51.58. Assume the standard deviation for the population of test scores is 15. The nationwide average score on this test us 50. The school superintendent wants to know whether the second graders in her school district have greater math skills than the nationwide average. Perform the hypothesis test and compute the P value. Based on your P value, what is the conclusion if we test at 0.05 level of significance?

2. Suppose that the mean price of a home in Denver, Colorado in 2008 was 225.3 thousand dollars. A random sample of 49 homes sold in 2010 had a mean price of 200.1 thousand dollars. A real estate firm wants to test to see if the mean price of 2010 differs from the mean price in 2008. Assume that the population standard deviation is 140. Perform the hypothesis test and compute the P value. Based on your P value, what is the conclusion if we test at the 0.05 level of significance?

Assume that the following are independent situations recently reported in the Wall Street Journal.

1. General Electric (GE) 7% bonds (interest payable annually on January 1), maturing January 1, 2030, were issued at 112 on January 1, 2010.

2. Sears 7% bonds (interest payable annually on December 31), maturing January 1, 2028 were issued at 90 on January 1, 2018. Instructions

(a) Were GE and Sears bonds issued at a premium or a discount?

(b) Explain how bonds, both paying the same contractual interest rate, could be issued at different prices.

(c) Prepare the journal entry to record the issue of each of these two bonds, assuming each company issued $500,000 of bonds in total.

(d) Prepare the adjusting entries to record the accrued interest and the amortization of the premium on the bonds for GE, on December 31, 2010 using straight-line amortization.

(e) Prepare the entries to record the interest payment and the amortization of the discount on the bonds for Sears, on December 31, 2018 using straight-line amortization.

6. ​Recently, fixed mortgage rates have been at historical lows due to the housing slowdown. The data table linked below shows the​ 30-year fixed average mortgage rate for the month of December every year between 1987 and 2010.

Year   Rate_(%)
1987   11.09
1988   11.04
1989   10.17
1990   9.93
1991   8.57
1992   8.3
1993   7.25
1994   9.04
1995   7.21
1996   7.06
1997   7.07
1998   6.84
1999   7.65
2000   7.74
2001   7.07
2002   6.84
2003   6.94
2004   6.79
2005   7.02
2006   6.82
2007   6.63
2008   5.88
2009   5.64
2010   5.4

b. Forecast the average December mortgage rate in 2011 using a trend projection ​(Round to two decimal places as​ needed.)

c. Calculate the MAD for this forecast. ​(Round to two decimal places as​ needed.)

d. Determine the Durbin–Watson statistic (Round to two decimal places as​ needed.)

e. Identify the critical values. ​(Round to two decimal places as​ needed.)

Read/review the articles and websites posted in Module 2 prior to responding to the two questions below.

They are important and will help you in this course and your journey to become a professional nurse.

1) The differentiating factors between occupations and professions are education, theory and research, and a professional framework or model. There have been debates on whether nursing is a "profession" or a skill-based "occupation" has been ongoing for decades. Explain why nursing should or should not be considered a profession. Support your response with reliable, valid sources.

2) Compare and contrast the "nursing model" vs the "medical model". As a future professional nurse, why is it important to understand the differences between these two models/professions? Additionally, discuss why it is best to describe nursing as part of "healthcare system/health professions" rather than the "medical field/medicine".

Articles are

BaccEssentials08-2.pdfPreview the document Nursing Education 2010 Brief-2.pdfPreview the document Institute of Medicine of the National Academies (2010).

The future of nursing: Focus on education report. (Links to an external site.)Links to an external site.

Portfolio analysis You have been given the return data shown in the first table on three assets—F, G, and H—over the period 2010–2013.

Expected return

Year Asset F Asset G Asset H

2010 16% 17% 14%

2011 17% 16% 15%

2012 18% 15% 16%

2013 19% 14% 17%

Using these assets, you have isolated the three investment alternatives shown in the following table:

Alternative Investment

1 100% of asset F

2 50% of asset F and 50% of asset G

3 50% of asset F and 50% of asset H

a. Calculate the expected return over the 4-year period for each of the three alternatives.

b. Calculate the standard deviation of returns over the 4-year period for each of the three alternatives.

c. Use your findings in parts a and b to calculate the coefficient of variation for each of the three alternatives.

d. On the basis of your findings, which of the three investment alternatives do you recommend? Why?

Crystal apple sales company began 2010 with cash of $2,000, inventory of $3,600 (200 crystal apples that cost $18 each), $2,500 of common stock, and $3,100 of retained earnings. the following events occured during 2010.

1. Crystal Apple purchased additional inventory twice during 2014. The first purchase consisted of 800 apples that cost $20 each, and the second consisted of 1,200 apples that cost $24 each. The purchases were on account.

2. The company sold 2,040 apples for cash at a selling price of $40 each.

3. The company paid $44,800 cash on accounts payable for inventory purchases.

4. Crystal Apple paid $26,000 cash for operating expenses.

5.Assume an income tax rate of 30 percent. Crystal Apple paid income tax expense in cash.

Required:

a. Determine the ending inventory and cost of goods sold using the three different cost flow assumptions: FIFO, LIFO, and Weighted Average.

b. Prepare an income statement, a balance sheet, and a statement of cash flows under each of the three cost flow assumptions.

6. ​Recently, fixed mortgage rates have been at historical lows due to the housing slowdown. The data table linked below shows the​30-year fixed average mortgage rate for the month of December every year between 1987 and 2010.

Year   Rate_(%)
1987   11.09
1988   11.04
1989   10.17
1990   9.93
1991   8.57
1992   8.3
1993   7.25
1994   9.04
1995   7.21
1996   7.06
1997   7.07
1998   6.84
1999   7.65
2000   7.74
2001   7.07
2002   6.84
2003   6.94
2004   6.79
2005   7.02
2006   6.82
2007   6.63
2008   5.88
2009   5.64
2010   5.4

b. Forecast the average December mortgage rate in 2011 using a trend projection ​(Round to two decimal places as​ needed.)

c. Calculate the MAD for this forecast. ​(Round to two decimal places as​ needed.)

d. Determine the Durbin–Watson statistic (Round to two decimal places as​ needed.)

e. Identify the critical values. ​(Round to two decimal places as​ needed.)

Question four
(I)During the year KCM acquired a new asset with a fair value of K500, 000 under a finance lease. The
lease agreement states that payments of K100, 000 must be paid for six years on 31 December each
year, starting on 31 December 2010. At the end of the six year period legal title of the asset will pass to
KCM.
KCM believes the only accounting entry he must make in relation to this asset is for the K100, 000
payments he has made and he has treated this as an operating expense. The interest rate is 12%
Required.
(a) Using the actuarial method(present value techniques) as recommended by IAS 17 leases
,prepare the calculations and the journal entry for the adjustments required to be made in the
accounts of KCM for the year ended 31 December 2010, to account for this finance lease .
(. b) Explain briefly why ethically KCM cannot treat the lease payment as an operating expense.
(3
Marks)
(ii)Explain the term operating segment as used in IFRS 8 and explain why the users of financial
statement may find a segment report useful.

Your company has earnings per share of $ 3.58It has 1.2million shares​ outstanding, each of which has a price of $ 43. You are thinking of buying​ TargetCo, which has earnings per share of $1.19​, 1.2 million shares​ outstanding, and a price per share of $28. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction.

a. If you pay no premium to buy​ TargetCo, what will your earnings per share be after the​ merger?

b. Suppose you offer an exchange ratio such​ that, at current​ pre-announcement share prices for both​ firms, the offer represents a 25%premium to buy TargetCo. What will your earnings per share be after the​ merger?

c. What explains the change in earnings per share in part

​(a​)? Are your shareholders any better or worse​ off?

d. What will your​ price-earnings ratio be after the merger​ (if you pay no​ premium)? How does this compare to your​P/E ratio before the​ merger? How does this compare to​ TargetCo's premerger​ P/E ratio?

a. If you pay no premium to buy​ TargetCo, what will your earnings per share be after the​ merger?

The EPS after the merger is

​$___ (Round to the nearest​ cent.)

b. Suppose you offer an exchange ratio such​ that, at current​ pre-announcement share prices for both​ firms, the offer represents a 25%

premium to buy TargetCo. What will your earnings per share be after the​ merger?

The EPS after the merger is $___ (Round to the nearest​ cent.)

c. What explains the change in earnings per share in part

​(a​)?  (Select the best choice​ below.)

A.EPS declines because you are over minus paying for TargetCo.EPS declines because you are over−paying for TargetCo.

B.EPS always decline if the firm issues new shares to pay for a merger.EPS always decline if the firm issues new shares to pay for a merger.

C.EPS declines because TargetCo has a higher price dash earnings ratio than your firm.EPS declines because TargetCo has a higher price-earnings ratio than your firm.

Are your shareholders any better or worse​ off?  ​(Select the best choice​ below.)

A.In this​ case, your shareholders are neither worse nor better off.

B.In this​ case, your shareholders are worse off.

C.In this​ case, your shareholders are better off.

d. What will your​ price-earnings ratio be after the merger​ (if you pay no​ premium)? How does this compare to your​P/E ratio before the​ merger? How does this compare to​ TargetCo's premerger​ P/E ratio?

The​ P/E ratio after the merger is ____ (Round to two decimal​ places.)

How does this compare to​ TargetCo's premerger​ P/E ratio?

The​ P/E ratio before the merger was _____​ (Round to two decimal​ places.)

​TargetCo's premerger​ P/E ratio was _____ (Round to two decimal​ places.)

​(Select from the 3 options below)

Buying TargetCo with stock and creating no​ synergies, the transaction simply​ ends-up with a company whose​ P/E ratio is

between

above

below

the​ P/E ratios of the two companies going into the transaction.