Consider a T-bond maturing in March 2020 with coupon payments on September 1st and March 1st. Assume that the bond has $1000 par value, 10% coupon rate, and YTM = 12.5%. The bond is traded on December 13, 2013. What is the Accrued Interest? What is the full price? What is the flat price?

EXPLANATION QUESTION ABOUT FUTURES MARKETS.

1. What characteristic should a cash market have to be a candidate for a futures market?

4. What is basis risk and who is exposed to basis risk? Who is not

6. What particular risks exist in clearing OTC products compared to exchange-traded futures products?

Suppose that the risk-free interest rate is 10%. A bond with 8% yield is traded at a price. The current bond price is $100.

(a) Calculate the theoretical future price for the contract deliverable in six months.

(b) If the actual future price for this stock is $102, describe the arbitrage opportunity and calculate the profit that you can realize.

Pronghorn Corp reports the following for the month of June.

A sale of 375 units occurred on June 15 for a selling price of $8 and a sale of 51 units on June 27 for $9.

Calculate the average cost per unit, using a perpetual inventory system. (Round answers to 3 decimal places, e.g. 5.125.)

eTextbook and Media

Calculate cost of the ending inventory and the cost of goods sold for each cost flow assumption, using a perpetual inventory system. Assume a sale of 375 units occurred on June 15 for a selling price of $8 and a sale of 51 units on June 27 for $9. (Round answers to 0 decimal places, e.g. 125.)

Culver Corporation uses a perpetual inventory system reports the following for the month of June.

Calculate the average cost per unit, using a perpetual inventory system. Assume a sale of 430 units occurred on June 15 for a selling price of $9 and a sale of 55 units on June 27 for $10. (Round answers to 3 decimal places, e.g. 5.125.)

Calculate cost of the ending inventory and the cost of goods sold for each cost flow assumption, using a perpetual inventory system. Assume a sale of 430 units occurred on June 15 for a selling price of $9 and a sale of 55 units on June 27 for $10. (Round answers to 0 decimal places, e.g. 125.)

ronghorn Corp reports the following for the month of June.

A sale of 375 units occurred on June 15 for a selling price of $8 and a sale of 51 units on June 27 for $9.

Calculate the average cost per unit, using a perpetual inventory system. (Round answers to 3 decimal places, e.g. 5.125.)

eTextbook and Media

Calculate cost of the ending inventory and the cost of goods sold for each cost flow assumption, using a perpetual inventory system. Assume a sale of 375 units occurred on June 15 for a selling price of $8 and a sale of 51 units on June 27 for $9. (Round answers to 0 decimal places, e.g. 125.)

ronghorn Corp reports the following for the month of June.

A sale of 375 units occurred on June 15 for a selling price of $8 and a sale of 51 units on June 27 for $9.

Calculate the average cost per unit, using a perpetual inventory system. (Round answers to 3 decimal places, e.g. 5.125.)

eTextbook and Media

Calculate cost of the ending inventory and the cost of goods sold for each cost flow assumption, using a perpetual inventory system. Assume a sale of 375 units occurred on June 15 for a selling price of $8 and a sale of 51 units on June 27 for $9. (Round answers to 0 decimal places, e.g. 125.)

Pronghorn Corp reports the following for the month of June.

A sale of 375 units occurred on June 15 for a selling price of $8 and a sale of 51 units on June 27 for $9.

Calculate the average cost per unit, using a perpetual inventory system. (Round answers to 3 decimal places, e.g. 5.125.)

eTextbook and Media

Calculate cost of the ending inventory and the cost of goods sold for each cost flow assumption, using a perpetual inventory system. Assume a sale of 375 units occurred on June 15 for a selling price of $8 and a sale of 51 units on June 27 for $9. (Round answers to 0 decimal places, e.g. 125.)

You must include all EXCEL printouts and the 6 step write-up for both problems. The questions are given below.

USING ANOVA: Assuming variances are equal.

Concerned about Friday absences, management examined the number of persons absent for each of the past three Fridays. Does this sample provide sufficient evidence to conclude there is a significant difference in the average number of absences? Use alpha = .05.

1. Is there sufficient evidence of a difference in the variances in number of absences among the four plants? (Set alpha = to .05)

2. Provide the p-value for part a, and explain its meaning in words.

3. Is there sufficient evidence to indicate a difference in the mean number of absences among the four plants? (Set alpha = to .05)

4. Provide the p-value for part a, and explain its meaning in words.

5. If there is a difference in the means, what test would you use to figure out which ones are different?

China has resurrected an exchange rate regime called Bretton Woods II, where these economies peg to the dollar. China pegged at Yuan8.28/$ from 1995 to 2005. (http://www.tradingeconomics.com/china/currency). On July 21, 2005, the People's Bank of China announced a revaluation of the Yuan (from Yuan8.28 to Yuan8.11 to the dollar) and a reform of the exchange rate regime. Under the reform., the People’s Bank of China linked its currency to a reference basket of currencies, heavily weighted toward the U.S. dollar. Over the next three years, under this crawling peg system, the yuan gradually appreciated against the dollar. With the advent of the global economic crisis, China reestablished the yuan's fixed peg to the dollar, at Yuan6.84/$ and maintained it for the next two years. China rolled out a new currency policy on June 20, 2010, that allowed the yuan to once again float upward, within limits, against the dollar; de facto, however, the Bretton Woods II regime remains intact and the currency pegged to the U.S. dollar. The Chinese central bank has managed this peg with widespread capital controls through quantitative limits on both inflows and outflows. The objectives of the controls have evolved over time, and include (i) facilitating monetary independence, (ii) helping channel external savings to desired uses; (iii) preventing firms and financial institutions from taking excessive external risks; (iv) maintaining balance of payments equilibrium and exchange rate stability; and (v) insulating the domestic economy from foreign financial crises.

Recently, the government has started to gradually liberalize capital flows and globally integrate China's capital markets in order to eventually establish Shanghai as a leading financial center. It remains unclear, however, whether China will yield more on monetary independence or exchange rate stability. Chinese authorities fear floating exchange rates, since they want to avoid a rapid and large appreciation of the yuan. This could have serious effects on employment and profits of multinationals in their export sector.

1. By how much did the yuan appreciate against the dollar on July 21,2005?

2. How has the yuan’s appreciation since July 21,2005 affected the U.S. trade deficit with China? Check the trade deficit with China over time at https://www.census.gov/foreign-trade/balance/c5700.html

3. How did the crawling-peg system in place from 2005 to 2008 likely affect inflows of hot money to China?

4. What is the likely reason for the Chinese government again fixing the yuan to the dollar upon the outbreak of the global economic crisis?

5. Why has China adopted capital controls?