Return and Risk: Consider the following scenario: Rate of Return Scenario Prob. Stocks Bonds Recession .20 - 5% 14% Normal .60 15% 8% Boom .20 25% 4%___ 1. What is the expected return for each investment? Bonds: Stocks: Portfolio (40% in bonds, 60% in stocks):

2. What is the risk for each investment? Bonds: Stocks: Portfolio (40% in bonds, 60% in stocks):

3. Which investment do you prefer? A. Bonds B. Stocks C. Portfolio

4. Investors expect the market return this year to be 14%. A stock with a beta of .8 has an expected return of 12%. If the market return this year turns out to be 10%, what is your best guess as to the rate of return on the stock? Suppose that the S&P500 has an expected return of 15% and T - bills provide a risk - free rate of 5%.

5. How to construct a portfolio from these two assets with a n expected return of 12%? Weight for S&P500: Weight for T - bills: 6. How to construct a portfolio from these two assets with a beta of .4? Weight for S&P500: Weight for T - bills:

Please provide full solutions for each a problem, not just a final answer so I can fully understand this. Thank you :)

There are 40 students in a Probability Course. Before epidemics their professor did his exams in campus and to avoid cheating cases he used two variants of the quiz by printing 20 papers of A variant and 20 papers of B variant. When the quiz ended, the students randomly put them into one pile. When the professor returned to his office he started to sort them into two piles of A variant and B variant. He took each paper from top of the original pile and put into one of the two piles A and B. Each time he switched from pile A to pile B or vice versa he took a deep breath. In average how many times did he take deep breath during this sorting process? For example, in the order ABBAABAB he takes 5 deep breaths: A*BB*AA*B*A*B (* indicates deep breath).

The beginning inventory of merchandise at Dunne Co. and data on purchases and sales for a three-month period ending June 30, 2016, are as follows:

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FIFO

1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in

Exhibit 4

, using the first-in, first-out method.

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Chart of Accounts

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Journal

2. Determine the total sales and the total cost of merchandise sold for the period. Journalize the entries in the sales and cost of merchandise sold accounts. Assume that all sales were on account, and date your journal entry June 30. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

Solution

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Final Questions

3. Determine the gross profit from sales for the period.

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Explanation

4. Determine the ending inventory cost on June 30, 2016.

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Explanation

5. Based upon the preceding data, would you expect the inventory using the last-in, first-out method

The method of inventory costing based on the assumption that the cost of merchandise sold is the cost of the most recent purchases.

to be higher or lower?

Higher

Lower

Happy face: interaction. Researchers at Temple University wanted to know the following: If you work waiting tables and you draw a happy face on the back of your customers' checks, will you get better tips? To study this question, they enlisted the cooperation of two servers at a Philadelphia restaurant. One was male, the other female. Each server recorded his or her tips for their next 50 tables. For 25 of the 50, following a predetermined randomization, they drew a happy face on the back of the check. The other 25 randomly chosen checks got no happy face. The response was the tip, expressed as a percentage of the total bill. The averages for the male server were 18% with a happy face, 21% with none. For the female server, the averages were 33% with a happy face, 28% with none.

a. Regard the dataset as a two-way ANOVA, which is the way it was analyzed in the article. Name the two factors of interest, tell whether each is observational or experimental, and identify the number of levels.

b. Draw an interaction graph(Including R code). Is there evidence of interaction? Describe the pattern in words, using the fact that an interaction, if present, is a difference of differences.

Starset Machine Shop is considering a 4-year project to improve its production efficiency. Buying a new machine press for $390,000 is estimated to result in $148,000 in annual pretax cost savings. The press falls in the 5-year MACRS class, and it will have a salvage value at the end of the project of $48,000. The press also requires an initial investment in spare parts inventory of $21,000, along with an additional $3,150 in inventory for each succeeding year of the project. The shop’s tax rate is 21 percent and its discount rate is 8 percent. (MACRS schedule) Calculate the NPV of this project.

MACRS schedule

Chapter 8. Flexible Budgets, Standard Costs, and Variance Analysis

8–1 What is a static planning budget?

8–2 What is a flexible budget and how does it differ from a static planning budget?

8–5 What is a revenue variance and what does it mean?

8–6 What is a spending variance and what does it mean?

8–7 What does a flexible budget enable that a simple comparison of the planning budget to actual results does not do?

8–9 What is a quantity standard? What is a price standard?

8–10 Why are separate price and quantity variances computed?

8–11 Who is generally responsible for the materials price variance? The materials quantity variance? The labor efficiency variance?

8–12 The materials price variance can be computed at what two different points in time? Which point is better? Why?

2. Blood pressure is independent of the blood group. We want to know, if the distributions attending to the blood group, in three referred samples attending to the type of blood pressure, they are distributed in the same way. To this end, a sample of 1500 subjects was collected and their blood group was determined and blood pressure was taken, classifying it as low, normal, and high. Obtaining the following results:

Use alfa at 0.05

Sally works for Nikko Enterprises and earns $990 bi-weekly. She has just received a 2% pay increase, effective this current pay period. In addition, Sally is entitled to five weeks’ vacation pay, which is paid each pay period.

Each pay, Sally also receives a group medical benefit of $40, which is shared 50/50 with her employer. She also receives an annual group term life insurance benefit of $1,250. Both plan values include applicable sales tax.

In addition, the following are other deductions from Sally’s pay, each bi-weekly period; $12 for union dues, $28 for a company loan repayment and $7 toward an employee social fund.

Assume income taxes are calculated at a combined rate of 18%.

Required:

1) Determine Sally’s Net Pay for one bi-weekly pay period, and

2) What is the amount owing to the CRA for statutory deductions (PD7A)

Erma’s Beauty Supply is considering expanding the existing store. Erma wants to lease the office space next door to her business. Erma must spend, $120,000 on equipment to expand. The equipment is expected to have a zero-salvage value and will be retired in 8 years. Erma expects to increase networking capital by $8,000 right now if she goes through with the expansion. Erma spent $12,000 last month on a survey of the area surrounding the shop to see if there was sufficient demand for a larger store. Erma estimates she will increase revenues by $110,000 per year in the new store for eight years. The direct expenses incurred to make those sales are $78,000, including rent. The lease she is considering signing is for 8 years. She will liquidate the $8,000 networking capital when the lease is complete in 8 years. Erma’s Beauty Supply pays 40.0% in taxes and has a cost of capital of 9.0%.

38. How much does Erma need to expand her business at T=0?

39. Based on this information, the project’s operating cash flow in each of the first seven years is $_______?

40. Based on this information, the project’s terminal year (year 8) total cash flow is $_______?

41. What is Erma’s NPV if she decides to expand the business?

STAT15_3:

The weight of yellow cheese (in grams) on a family pizza is normally split with a 200g span and a standard 15g deviation.

A. What is the probability that the yellow cheese weight on a randomly selected family pizza will be between 194 grams and 209 grams?
B. What is the bottom quarter of the yellow cheese weight distribution on family pizza?
C. Family pizza consists of dough, sauce, yellow cheese and a possible addition. The gravy weight is always 100 grams. The weight of the supplement spreads evenly (continuously) in the range of 20 grams to 50 grams. The various component weights are independent.
Ziv ordered two family pizzas - one with no extra and one with extra. What is the expectation and what is the difference between the total weight of the two pizzas (without the dough)?