Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 5 years to maturity, whereas Bond Dave has 12 years to maturity. (Do not round your intermediate calculations.) Requirement 1: (a) If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Sam? (b) If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Dave? Requirement 2: (a) If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Sam be then? (b) If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Dave be then?
In: Finance
3. A six-month call option is the right to buy stock at $30. Currently, the stock is selling for $32 and the call is selling for $3. You are considering buying 100 shares of the stock ($3,000) or one call option ($300).
a) If the price of the stock rises to $39 within six months, what would be the profits or losses on each position? What would be the percentage gains or losses?
b) If the price of the stock declines to $25 within six months, what would be the profits or losses on each position? What would be the percentage gains or losses?
c)If the price of the stock remained stable at $32, what would be the percentage gains or losses at the expiration of the call option?
d)If you compare purchasing the stock to purchasing the call, why do the percentage gains and losses differ?
Please show work
In: Accounting
2. The accompanying data table show the percentage of tax returns filed electronically in a city from 2000 to 2009. Complete the parts below.
Year Percentage
2000 27
2001 29
2002 35
2003 42
2004 45
2005 49
2006 55
2007 59
2008 61
2009 67
|
a) |
Forecast the percentage of tax returns that will be electronically filed for 2010 using exponential smoothing with a=0.2 (Round to the nearest integer as needed.) |
b) Calculate the MAD for the forecast in part a. (Round to two decimal places as needed.)
|
c) |
The percentage of tax returns that will be electronically filed for 2010 using exponential smoothing with trend adjustment using a=0.3 and b=0.6 is? (Round to the nearest integer as needed.) |
d) Calculate the MAD for the forecast in part c (Round to two decimal places as needed.)
In: Statistics and Probability
A Multinational corporation based in Mexico will receive $5 million tomorrow for its exports to an importer in the US. It wants to determine, with 90 % confidence, its maximum one-day loss based on a potential decline in the value of the dollar. The firm’s estimate of the standard deviation of the daily percentage change in the dollar during the previous 100 days is 2.1%. Given that the daily percentage changes are normally distributed and the spot rate for the peso is $0.10, find
(a) The value of the dollar based on the maximum one-day loss if the firm expects the dollar to fall 0.2% fall.
(b) The potential peso loss for the MNC if the percentage variability in the daily movements of the dollar falls to 1.5%.
(c) The potential dollar loss if the level of confidence is raised to 95% and the percentage variability of the dollar is increases to 2.5%
In: Finance
|
Bond J has a coupon rate of 4 percent. Bond K has a coupon rate of 11 percent. Both bonds have 8 years to maturity, make semiannual payments, and have a YTM of 6 percent. |
| If interest rates suddenly rise by 4 percent, what is the percentage price change of Bond J? | |
|
| If interest rates suddenly rise by 4 percent, what is the percentage price change of Bond K? | |
|
| If interest rates suddenly fall by 4 percent, what is the percentage price change of Bond J? | |
|
| If interest rates suddenly fall by 4 percent, what is the percentage price change of Bond K? | |
|
In: Finance
Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 2 years to maturity, whereas Bond Dave has 20 years to maturity. (Do not round your intermediate calculations.) Requirement 1:
(a) If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Sam?
(b) If interest rates suddenly rise by 4 percent, what is the percentage change in the price of Bond Dave?
Requirement 2:
(a) If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Sam be then?
(b) If rates were to suddenly fall by 4 percent instead, what would the percentage change in the price of Bond Dave be then?
In: Accounting
The countries of Europe report that 45% of the labor force is female. The United Nations wonders if the percentage of females in the labor force is the same in the United States. Representatives from the United States Department of Labor plan to check a random sample of over 10,000 employment records on file to estimate a percentage of females in the United States labor force.
a. The representatives from the department of labor want to estimate the percentage of females in the US labor force with 95% confidence. In a sample of 525 employment records, they found that 219 of the workers were female. Create the 95% confidence interval. Show all work. Assume conditions are met.
Interpret the meaning of the confidence interval.
Should the representatives from the Department of Labor conclude that the percentage of females in their labor force is lower than Europe's rate of 46%?
In: Statistics and Probability
Are America's top chief executive officers (CEOs) really worth
all that money? One way to answer this question is to look at row
B, the annual company percentage increase in revenue, versus row A,
the CEO's annual percentage salary increase in that same company.
Suppose that a random sample of companies yielded the following
data:
| B: Percent for company | 2 | 5 | 29 | 8 | 21 | 14 | 13 | 12 |
| A: Percent for CEO | -1 | 5 | 21 | 13 | 12 | 18 | 9 | 8 |
Do these data indicate that the population mean percentage increase
in corporate revenue (row B) is different from the population mean
percentage increase in CEO salary? Use a 1% level of significance.
Will you use a left tailed, right tailed, or two tailed test?
In: Statistics and Probability
What percentage of hospitals provide at least some charity care? Based on a random sample of hospital reports from eastern states, the following information is obtained (units in percentage of hospitals providing at least some charity care):
| 56.8 | 56.1 | 53.3 | 65.6 | 59.0 | 64.7 | 70.1 | 64.7 | 53.5 | 78.2 |
Assume that the population of x values has an approximately normal distribution.
(a) Use a calculator with mean and sample standard deviation keys to find the sample mean percentage x and the sample standard deviation s. (Round your answers to one decimal place.)
| x = | % |
| s = | % |
(b) Find a 90% confidence interval for the population average μ of the percentage of hospitals providing at least some charity care. (Round your answers to one decimal place.)
| lower limit | % |
| upper limit | % |
In: Statistics and Probability
Both Bond A and Bond B have 8 percent coupons, make semiannual payments, and are priced at par value. Bond A has 2 years to maturity, whereas Bond B has 11 years to maturity.
(a) If interest rates suddenly rise by 1 percent, what is the percentage change in the price of Bond A? [3 points]
(b) If interest rates suddenly rise by 1 percent, what is the percentage change in the price of Bond B?
(c) If rates were to suddenly fall by 1 percent instead, what would the percentage change in the price of Bond A be then? [3 points]
(d) If rates were to suddenly fall by 1 percent instead, what would the percentage change in the price of Bond B be then? [3 points]
(e) What relation is illustrated? Interpret your results [4 points]
In: Finance