An herbal medicine is tested on 10 patients with sleeping disorders. The table below shows the hours of sleep patients got during one night without using the

herbal medicine and the hours of sleep the same patients got on another night after the herbal medicine was administered. Assume underlying normal distributions. Remember the applets will only accept one word labels. Data must be organized in columns.

Patient 1 2 3 4 5 6 7 8 9 10

Hours

without 1.0 1.4 3.4 3.7 5.1 5.1 5.2 5.3 5.5 5.8

Hours

with 2.9 3.3 3.5 4.4 5.0 5.0 5.2 5.3 6.0 6.5

a. At a= 0.01, does the herbal medicine increase the number of hours of sleep during one night?

b. Construct a 95% confidence interval for the mean difference.

c. What is the point estimate for this interval?

d. What is the margin of error for this interval?

e. Interpret the confidence interval in the context of this problem.

Capital Budgeting Assignment

For the following two projects, determine the

1. Payback Period
2. Discounted Payback
3. Net Present Value
4. Profitability Index (Benefit-Cost Ratio)
5. Internal Rate of Return
6. Modified Internal Rate of Return

The firm’s cost of capital k_o is 15% and the risk free rate R_f is 10%. The firm assesses risk and assigns a risk index to determine a risk adjusted discount rate. An index of 1.0 would be assigned to an average risk project.

To determine risk adjusted rates the firm uses the following equation:

Risk Adjusted Rate (RADR) = R_f + [Risk Index (k_o – R_f)

Task: Rank the projects in accordance with each method of analysis.

- An 80 kg man stands in a very strong wind moving at 13 m/s at torso height. As you know, he will need to lean in to the wind, and we can model the situation to see why. Assume that the man has a mass of 80 kg, with a center of gravity 1.0 mabove the ground. The action of the wind on his torso, which we approximate as a cylinder 50 cmwide and 90 cm long centered 1.2 m above the ground, produces a force that tries to tip him over backward. To keep from falling over, he must lean forward.

-Part A: What is the magnitude of the torque provided by the wind force? Take the pivot point at his feet. Assume that he is standing vertically. Assume that the air is at standard temperature and pressure. Express your answer with the appropriate units.

τ =

-Part B: At what angle to the vertical must the man lean to provide a gravitational torque that is equal to this torque due to the wind force?Express your answer in degrees.

θ =

A single gene in horses determines coat (hide) color. Palomino (‘dove’) horses are heterozygous (Aa), while homozygous recessive (aa) are cremello, and homozygous dominant (AA) are chestnut. A horse rancher buys 80 palomino horses and 20 cremello horses and lets them breed free.

(a) What are frequencies of alleles and genotypes in THIS (parent) generation? Are all genotypes represented? Show your calculations. Is the population at this moment (i.e. in THIS generation) in Hardy-Weinberg balance or not? Explain.

(b) What would be frequencies of alleles and genotypes in NEXT (children) generation if one assumes Hardy-Weinberg balance? (no selection, new mutation, migration, etc.) Show your calculations.

(c) Now assume (for the purpose of the problem) that Hardy-Weinberg balance is violated by selection against cremello horses (which leave less offspring). Relative fitness of both chestnut and palomino is WAA = WAa = 1.0, but relative fitness of cremello, Waa = 0.8 (which means that selection coefficient s= - 0.2). What are frequencies of alleles and genotypes in NEXT generation?

Examine the following book-value balance sheet for University Products Inc. The preferred stock currently sells for $15 per share and pays a dividend of $3 a share. The common stock sells for $20 per share and has a beta of 0.7. There are 2 million common shares outstanding. The market risk premium is 12%, the risk-free rate is 8%, and the firm’s tax rate is 21%. BOOK-VALUE BALANCE SHEET (Figures in $ millions) Assets Liabilities and Net Worth Cash and short-term securities $ 1.0 Bonds, coupon = 6%, paid annually (maturity = 10 years, current yield to maturity = 8%) $ 15.0 Accounts receivable 4.0 Preferred stock (par value $20 per share) 3.0 Inventories 8.0 Common stock (par value $0.10) 0.2 Plant and equipment 24.0 Additional paid-in stockholders’ equity 10.8 Retained earnings 8.0 Total $ 37.0 Total $ 37.0 a. What is the market debt-to-value ratio of the firm? b. What is University’s WACC?

FIELD: Exchange Rates and International Finance
The sales manager of a US company trades iPhones in three different markets, Europe (Eurozone), UK and the USA, has just received a total amount of $1million from the selling of 1,000 iPhones (each iPhone costs $1,000). He has a week available until the payment of firm’s suppliers and employees’ salaries. The current exchange rates between the currencies of the three markets (USD $, euro € and GBP £), are: ?¹_€⁄$=0.9110, ?²_€/£=1.1712 and ?³_{$ ⁄£}=1.2910.

a) If no transaction costs exist, could the manager take advantage of an arbitrage opportunity? Explain. [Mark 1.5]
b) When will there not be any room for profits? That is, there is no arbitrage opportunity. [Mark 0.5]
c) Suppose now that there is a cost each time currency is being traded, i.e., either bought or sold. Moreover, this transaction cost is equal to 1% of the value of currency that is traded. What will the manager’s decision be in this case? [Mark 1.0]

Note: Round your answers to the third decimal point.

Minion, Inc. has no debt outstanding and a total market value of $422,400. Earnings before interest and taxes, EBIT, are projected to be $55,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 14% higher. If there is a recession, then EBIT will be 20% lower. The company is considering a $205,000 debt issue with an interest rate of 6%. The proceeds will be used to repurchase shares of stock. There are currently 8,800 shares outstanding. Ignore taxes. Assume the company has a market-to-book ratio of 1.0 and the stock price remains constant.

a-1) calculate the return on equity, ROE, under each of the three economic scenarios before any debt is issued.

a-2) calculate the percentage changes in ROE when the economy expands or enters a recession.

b-1) assume the firm goes through the proposed recapitalization. calculate return on equity, ROE, under each of the three economic scenarios.

b-2) assume the firm goes through with the proposed recapitalization. calculate the percentage changes in ROE when the economy expands or enters a recession.

The following ratios have been calculated for MORT Oil and Gas Company for two years 2019-2018.

Instructions:

You are an analyst and investors ask you to analyze the capital structure, long-term solvency, and profitability of Al MORT Oil and Gas Company, and give them a feedback regarding the decision to invest in this company or not.

For the past

112112

​years, a certain state suffered

2828

direct hits from major​ (category 3 to​ 5) hurricanes. Assume that this was typical and the number of hits per year follows a Poisson distribution. Complete parts​ (a) through​ (d).

​(a) What is the probability that the state will not be hit by any major hurricanes in a single​ year?

The probability is

1-The number of hits to a website follows a Poisson process. Hits occur at the rate of

1.0 per minute1.0 per minute

between​ 7:00 P.M. and

99​:00

P.M. Given below are three scenarios for the number of hits to the website. Compute the probability of each scenario between

8 : 27 P.M.8:27 P.M.

and

88​:3535

P.M. Interpret each result.

​(a) exactly fivefive

​(b) fewer than fivefive

​(c) at least fivefive

2-Determine the required value of the missing probability to make the distribution a discrete probability distribution. x ​P(x) 3 0.35 0.35 4 ​? 5 0.16 0.16 6 0.27 0.27 ​P(4) =

Consider the following multifactor (APT) model of security returns for a particular stock.

a. If T-bills currently offer a 5% yield, find the expected rate of return on this stock if the market views the stock as fairly priced. (Do not round intermediate calculations. Round your answer to 1 decimal place.)

Expected rate of return = ?%

b. Suppose that the market expects the values for the three macro factors given in column 1 below, but that the actual values turn out as given in column 2. Calculate the revised expectations for the rate of return on the stock once the “surprises” become known. (Do not round intermediate calculations. Round your answer to 1 decimal place.)

Expected rate of return = ?%