1. Calculate the standard deviation of a portfolio consisting of 40 percent stock P and 60 percent stock Q.

Round to the nearset hundredth percent. Answer in the percent format. Do not include % sign in your answer (i.e. If your answer is 4.33%, type 4.33 without a % sign at the end.)

2.

What is the beta of the following portfolio?

Round to the second decimal place.

3.

Which of the following is NOT an example of factors that affect systematic risk?

4.

You are analyzing a common stock with a beta of 1.5. The risk-free rate of interest is 5 percent and the expected return on the market is 15 percent. If the stock's return based on its market price is 21.5%,

1.  Find the margin of error for the mean weight of medium Antonio’s cheese pizza if a sample of size n = 16 produces a sample standard deviation of 4.220 g, assuming 95% confidence. Round to two decimals.

2. The mean and standard deviation for voltages of power packs labeled as 12 volts for a sample of 25 are as follows:

Please develop a 95.00% confidence interval for the sample above. (Round to 3 decimal places.)
Lower limit = ?

Upper limit = ?

3. The actual voltages of power packs labeled as 12 volts for a sample are as follows: 11.90, 11.79, 11.38, 11.79, 12.21, 11.95, 11.38, 11.01.
Please develop a 90.00% confidence interval for the sample above.

Lower limit = ?

Upper limit = ?

4. Assuming the random variable X is normally distributed, compute the lower and upper limits of the 90% confidence interval for the population mean if a random sample of size n=7 produces a sample mean of 12 and sample standard deviation of 6.00. Round to two decimals.

Lower Limit = ?,

Upper Limit = ?

5. A random sample of 22 scalpers’ ticket prices for a rock concert has sample mean $44.00 and sample standard deviation of $6.02. What is the upper and lower limit of the 95% confidence interval of mean scalpers’ ticket prices? Round to two decimals.

Lower Limit = ?

Upper Limit = ?

3. [13 marks] A company is interested in forecasting demand for a product. They have reason to believe that the demand is not affected by any seasonal changes and that it does not increase or decrease systematically over time. They have data for the last 9 periods (below).

In each part of this question, show your work: show the equation you use, how you plug in, and your final answer. Please do not round any answers. Hint: see lecture 22 example 3.

a) [3 marks] Use a 4-period moving average to forecast demand for period 10.

b) [3 marks] Use a 3-period weighted moving average to forecast demand for period 10 using weights of 0.6, 0.3, and 0.1, respectively. Show your work.

c) [3 marks] Suppose the forecast for period 9 was 235 units. Use exponential smoothing with a smoothing constant of 0.6 to forecast demand for period 10.

d) [4 marks] Suppose the actual demand in period 10 was 211 units. Which of your forecasting methods from parts a through c performed best, and why? Please provide a table similar to the one shown on slide 48 of lecture 22, and make your conclusion based on your table.

A 60-year-old man suffered from 6 months of severe headaches and excessive perspiration, he also became aware that he had developed tunnel vision. He had a 12-yr history of hypertension and vague aches and pains in his shoulder and hand joints that were diagnosed as osteoarthrosis. On examination by his GP, he was found to have course facial features, a prominent jaw. He had bitemporal hemianopia, BP 145/105 mmHG and a slight glycosuria. He was sent for a lateral skull x-ray that showed an enlarged pituitary fossa. Blood tests showed: Fasting glucose 9.2 (Reference range 3.5-6.5 mmol/l) Luteinizing hormone 3.7 (Reference range 0.7-6.0 U/l) Follicle stimulating hormone 4.8 (Reference range <6 U/l) Prolactin 295 (Reference range <425 mU/l) Testosterone 18.1 (Reference range10-35 nmol/l) Growth hormone 8.0 (Reference range <10 mU/l) Cortisol (random) 458 (Reference range 250-700 nmol/l) TSH 3.2 (Reference range 0.3-6.0 mU/l) Free T4 15.6 (Reference range 9.4-25.0 pmol/l) What further biochemical tests would you perform?

Better Mousetraps has developed a new trap. It can go into production for an initial investment in equipment of $5.4 million. The equipment will be depreciated straight line over 6 years to a value of zero, but in fact it can be sold after 6 years for $606,000. The firm believes that working capital at each date must be maintained at a level of 10% of next year’s forecast sales. The firm estimates production costs equal to $1.70 per trap and believes that the traps can be sold for $7 each. Sales forecasts are given in the following table. The project will come to an end in 6 years, when the trap becomes technologically obsolete. The firm’s tax bracket is 35%, and the required rate of return on the project is 12%. Use the MACRS depreciation schedule.

a. What is project NPV? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer in millions rounded to 4 decimal places.)

b. By how much would NPV increase if the firm depreciated its investment using the 5-year MACRS schedule? (Do not round intermediate calculations. Enter your answer in whole dollars not in millions.)

Consider the following information regarding the performance of a money manager in a recent month. The table represents the actual return of each sector of the manager’s portfolio in column 1, the fraction of the portfolio allocated to each sector in column 2, the benchmark or neutral sector allocations in column 3, and the returns of sector indices in column 4.

a-1. What was the manager’s return in the month? (Do not round intermediate calculations. Input all amounts as positive values. Round your answer to 2 decimal places.)

a-2. What was her overperformance or underperformance? (Do not round intermediate calculations. Input all amounts as positive values. Round your answer to 2 decimal places.)

b. What was the contribution of security selection to relative performance? (Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.)

c. What was the contribution of asset allocation to relative performance? (Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.)

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1. Paste SPSS output. (7 pts)
2. Write an APA-style Results section based on your analysis. Include your scatterplot as an APA-style figure as demonstrated in the APA writing presentation. (Results = 8 pts; Graph = 5 pts)

Hula Enterprises is considering a new project to produce solar water heaters. The finance manager wishes to find an appropriate risk adjusted discount rate for the project. The (equity) beta of Hot Water, a firm currently producing solar water heaters, is 1.4. Hot Water has a debt to total value ratio of 0.3. The expected return on the market is 0.08, and the riskfree rate is 0.07. Suppose the corporate tax rate is 30 percent. Assume that debt is riskless throughout this problem. (Round your answers to 2 decimal places. (e.g., 0.16)) a. The expected return on the unlevered equity (return on asset, R0) for the solar water heater project is %. b. If Hula is an equity financed firm, the weighted average cost of capital for the project is %. c. If Hula has a debt to equity ratio of 0.8, the weighted average cost of capital for the project is %. d. The finance manager believes that the solar water heater project can support 40 cents of debt for every dollar of asset value, i.e., the debt capacity is 40 cents for every dollar of asset value. Hence she is not sure that the debt to equity ratio of 0.8 used in the weighted average cost of capital calculation is valid. Based on her belief, the appropriate debt ratio to use is %. The weighted average cost of capital that you will arrive at with this capital structure is

Better Mousetraps has developed a new trap. It can go into production for an initial investment in equipment of $5.7 million. The equipment will be depreciated straight line over 6 years to a value of zero, but in fact it can be sold after 6 years for $671,000. The firm believes that working capital at each date must be maintained at a level of 10% of next year’s forecast sales. The firm estimates production costs equal to $1.80 per trap and believes that the traps can be sold for $7 each. Sales forecasts are given in the following table. The project will come to an end in 6 years, when the trap becomes technologically obsolete. The firm’s tax bracket is 35%, and the required rate of return on the project is 8%. Use the MACRS depreciation schedule. Year: 0 1 2 3 4 5 6 Thereafter Sales (millions of traps) 0 0.4 0.6 0.7 0.7 0.5 0.3 0 a. What is project NPV? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer in millions rounded to 4 decimal places.) b. By how much would NPV increase if the firm depreciated its investment using the 5-year MACRS schedule? (Do not round intermediate calculations. Enter your answer in whole dollars not in millions