In 2011-2015, mutual fund manager, Diana Sauros produced the following percentage rates of return for the Mesozoic Fund. Rates of return on the market index are given for comparison.

Calculate (a) the average return on both the Fund and the index, and (b) the standard deviation of the returns on each. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Calculate openness as a percentage for Paraguay and Poland. Explain how you calculated openness, i.e., write down the formula. Using a graph of Openness (as a percentage) versus time, explain in up to 200 words how openness has changed for these countries from 2001 to 2014. Put Paraguay and Poland in the same graph and make sure your graph is properly labelled.

1. Why is the percentage return a more useful measure than the dollar return?

2. How do the authors of your textbook define risk? How is it measured?

3. What are the two components of total risk? Which component is part of the risk-return relationship? Why?

4. Consider that you have three stocks in your portfolio and wish to add a fourth. You want to know if the fourth stock will make the portfolio riskier or less risky. Explain how this would be assessed using beta as the measure of risk.

5. Why do we use market-based weights instead of book-value-based weights when computing the WACC?

Please answer all of the questions, if you can not answer all of the questions do not reply.

Which is correct regarding call option elasticity?

Dimitra is projecting cash flows for her firm using the percentage of sales method. She projects that the sales will be growing at 5% per year from the current level of $1M (year 0). She also projects a constant $20K per year in depreciation for the next 5 years. The firm's Net PPE currently stands at $400K. What should be her forecast for Capital Investment in year 2?

A.

$44K

B.

$20K

C.

$41K

D.

$61K

E.

$20K

When forecasting financial statements, the percentage of sales method of tying forecast variables to sales may not be appropriate when:

Form a corporation. Explain what each shareholder contributed and what stock percentage and FMV they received in return.

Explain what tax consequences/gains if any recognized upon formation and the Initial bases in the stock for each shareholder.

Peterson Co.’s shareholder equity and the percentage of an upcoming stock dividend.

Peterson is considering either a 34% stock dividend or a 7% stock dividend.

Insert the total equity amount here. (The company is using the cost method for treasury stock.):

$__________________________________.

Set up cell C16 on P1 so that it AUTOMATICALLY displays the word “Small” or the word “Large” as appropriate to describe the stock dividend (the IF function would accomplish this). Assume a small stock dividend is less than 25%.

Insert the Retained Earnings amount here:

$___________________________________ (% = 34%)

Total each of the columns. Note the total of the “Effect” column should be zero.

When circuit boards used in the manufacture of compact disc players are tested, the long-run percentage of defectives is 10%. Let X = the number of defective boards in a random sample of size n = 25, so X ~ Bin(25, 0.1). (Round your probabilities to three decimal places.)

(a) Determine P(X ≤ 2).

(b) Determine P(X ≥ 5).

(c) Determine P(1 ≤ X ≤ 4).

(d) What is the probability that none of the 25 boards is defective?

(e) Calculate the expected value and standard deviation of X. (Round your standard deviation to two decimal places.)

The following data represent soil water content (percentage of water by volume) for independent random samples of soil taken from two experimental fields growing bell peppers. Soil water content from field I: x1; n1 = 72 15.3 11.3 10.2 10.8 16.6 8.3 9.1 12.3 9.1 14.3 10.7 16.1 10.2 15.2 8.9 9.5 9.6 11.3 14.0 11.3 15.6 11.2 13.8 9.0 8.4 8.2 12.0 13.9 11.6 16.0 9.6 11.4 8.4 8.0 14.1 10.9 13.2 13.8 14.6 10.2 11.5 13.1 14.7 12.5 10.2 11.8 11.0 12.7 10.3 10.8 11.0 12.6 10.8 9.6 11.5 10.6 11.7 10.1 9.7 9.7 11.2 9.8 10.3 11.9 9.7 11.3 10.4 12.0 11.0 10.7 8.9 11.2 Soil water content from field II: x2; n2 = 80 12.3 10.3 13.6 8.1 13.5 7.8 11.8 7.7 8.1 9.2 14.1 8.9 13.9 7.5 12.6 7.3 14.9 12.2 7.6 8.9 13.9 8.4 13.4 7.1 12.4 7.6 9.9 26.0 7.3 7.4 14.3 8.4 13.2 7.3 11.3 7.5 9.7 12.3 6.9 7.6 13.8 7.5 13.3 8.0 11.3 6.8 7.4 11.7 11.8 7.7 12.6 7.7 13.2 13.9 10.4 12.9 7.6 10.7 10.7 10.9 12.5 11.3 10.7 13.2 8.9 12.9 7.7 9.7 9.7 11.4 11.9 13.4 9.2 13.4 8.8 11.9 7.1 8.8 14.0 14.3 (a) Use a calculator with mean and standard deviation keys to calculate x1, s1, x2, and s2. (Round your answers to two decimal places.) x1 = s1 = x2 = s2 = (b) Let μ1 be the population mean for x1 and let μ2 be the population mean for x2. Find a 95% confidence interval for μ1 − μ2. (Round your answers to two decimal places.) lower limit upper limit (c) Examine the confidence interval and explain what it means in the context of this problem. Does the interval consist of numbers that are all positive? All negative? Of different signs? At the 95% level of confidence, is the population mean soil water content of the first field higher than that of the second field? Because the interval contains only positive numbers, we can say that the mean soil water content of the first field is higher. Because the interval contains both positive and negative numbers, we cannot say that the mean soil water content of the first field is higher. We can not make any conclusions using this confidence interval. Because the interval contains only negative numbers, we can say that the mean soil water content of the second field is higher. (d) Which distribution did you use (standard normal or Student's t)? Why? The Student's t-distribution was used because σ1 and σ2 are unknown. The Student's t-distribution was used because σ1 and σ2 are known. The standard normal distribution was used because σ1 and σ2 are unknown. The standard normal distribution was used because σ1 and σ2 are known. Do you need information about the soil water content distributions? Both samples are large, so information about the distributions is not needed. Both samples are small, so information about distributions is needed. (e) Use α = 0.01 to test the claim that the population mean soil water content of the first field is higher than that of the second. (i) What is the level of significance? State the null and alternate hypotheses. H0: μ1 = μ2; H1: μ1 ≠ μ2 H0: μ1 ≠ μ2; H1: μ1 = μ2 H0: μ1 = μ2; H1: μ1 > μ2 H0: μ1 = μ2; H1: μ1 < μ2 Correct: (ii) What sampling distribution will you use? What assumptions are you making? The standard normal. We assume that both population distributions are approximately normal with known standard deviations. The standard normal. We assume that both population distributions are approximately normal with unknown standard deviations. The Student's t. We assume that both population distributions are approximately normal with known standard deviations. The Student's t. We assume that both population distributions are approximately normal with unknown standard deviations. What is the value of the sample test statistic? Compute the corresponding z or t value as appropriate. (Test the difference μ1 − μ2. Do not use rounded values. Round your answer to three decimal places.) (iii) Find (or estimate) the P-value. P-value > 0.250 0.125 < P-value < 0.250 0.050 < P-value < 0.125 0.025 < P-value < 0.050 0.005 < P-value < 0.025 P-value < 0.005. Sketch the sampling distribution and show the area corresponding to the P-value. WebAssign Plot WebAssign Plot WebAssign Plot WebAssign Plot. (iv) Based on your answers in parts (i)-(iii), will you reject or fail to reject the null hypothesis? Are the data statistically significant at level α? At the α = 0.01 level, we reject the null hypothesis and conclude the data are statistically significant. At the α = 0.01 level, we reject the null hypothesis and conclude the data are not statistically significant. At the α = 0.01 level, we fail to reject the null hypothesis and conclude the data are not statistically significant. At the α = 0.01 level, we fail to reject the null hypothesis and conclude the data are statistically significant. (v) Interpret your conclusion in the context of the application. Fail to reject the null hypothesis, there is sufficient evidence that the population mean soil water content of the first field is higher than that of the second. Reject the null hypothesis, there is insufficient evidence that the population mean soil water content of the first field is higher than that of the second. Reject the null hypothesis, there is sufficient evidence that the population mean soil water content of the first field is higher than that of the second. Fail to reject the null hypothesis, there is insufficient evidence that the population mean soil water content of the first field is higher than that of the sec