Consider a population of 10241024 mutual funds that primarily invest in large companies. You have determined that muμ​, the mean​ one-year total percentage return achieved by all the​ funds, is 8.408.40 and that sigmaσ​,the standard​ deviation, is 3.503.50. Complete​ (a) through​ (c). a. According to the empirical​ rule, what percentage of these funds is expected to be within ​±33 standard deviations ,deviations of the​ mean? 99.799.7​% b. According to the Chebyshev​ rule, what percentage of these funds are expected to be within

​±22 standard deviations of the​ mean? -75.075.0​% ​(Round to two decimal places as​ needed.)

***** c. According to the Chebyshev​ rule, at least

88.8988.89​%

of these funds are expected to have​ one-year total returns between what two​ amounts?

Between_ and _.

Interest rate risk is associated with the bonds price variability given a change in the interest rates.

Suppose you have BOND A, which is a 30 year zero coupon bond and BOND B, which is a 5 year 10% coupon bond. If interest rates (YTM) change from 8% to 7% the bonds will increase in value. Suppose BOND A's price changes from $99.38 to 121.71 and the 5 year 10% coupon bond price changes from $1079.85 to $1123.01. Which bond has the greatest percentage increase in value? Record the percentage increase in value of the bond with the highest percentage change below. Write the increase as a decimal, so a 5% increase would be written as 0.0500.

The goal of this second stage in our equity analyst project is to select one industry out of this list of 24 whose performance prospects you determine are best over the next year. Here are some factors to consider when comparing industry groups:[1]

Degree of Competition in the Industry

Supply/Demand Dynamics for the Industry’s Products

Industry Cost Structure

Degree of Government Regulation-Favorable or Not

Exposure to the Business Cycle

Relative Financial Norms and Standards

Your team is asked to write a 5-10 page paper providing your analysis of the issues involved in your selection of the industry group that you conclude is most likely to prosper in the coming months and your justification of your choice of that industry.

Team Analysis of Select Industry Groups

This analysis is a team assignment that requires your team to analyze a select group of alternative industries to determine which is most likely to perform best in terms of growth and earnings over the next 12 months. Your instructor will create your teams, ideally based on similar views about the near-term prospects for the U.S. economy expressed in the Individual Asset Allocation Exercise.

To guide this second stage analysis, you are asked to rely on the North American Industry Groups database available at Yahoo! Finance. The system is comprised of 9 macroeconomic sectors, 31 business segments and 215 industry groups. This database is readily accessible via Yahoo! Finance at

http://biz.yahoo.com/ic/ind_index.html

To simplify the exercise the 215 industry groups within the database have been reduced to a more analytically manageable 24 industry groups (each with public firms listed at Yahoo! Finance totaling no less than 5 and no more than 15 companies) in 7 macroeconomic sectors as follows:

Basic Materials

Aluminum

Major Integrated Oil &Gas

Nonmetallic Mineral Mining

Consumer Goods

Appliances

Confectioners

Office Supplies

Financial

REIT-Healthcare Facilities

REIT-Hotel/Motel

REIT-Industrial

Healthcare

Drugs-Generic

Home Health Care

Hospitals

Industrial Goods

Manufactured Housing

Pollution & Treatment Controls

Services

Advertising Agencies

Air Delivery & Freight Services

Drug Stores

Electronic Stores

Home Improvement Stores

Jewelry Stores

Technology

Computer Based Systems

Long Distance Carriers

Personal Computers  

Utilities

Water Utilities

To access more details on these groups go to http://biz.yahoo.com/ic/ind_index.html and click on any of the names of the 24 groups to go to each industry’s “Industry Center” page. Additional useful information is available via the link to “Industry Browser” on the left. Also, on each industry’s summary page click on “Company Index” and then on “Public” on the subsequent page next to “View:” to get the list of public companies in this industry. Our focus is on publicly listed companies in which we might ultimately invest. The list of public companies is provided alphabetically. Following each name is the company’s ticker symbol in brackets. See http://www.investopedia.com/terms/s/stocksymbol.asp or http://www.investorwords.com/4968/ticker_symbol.html for brief definitions of stock/ticker symbols.

Please note that on occasion the ticker symbol may also be followed by other letters, such as PK or OB (see http://www.investopedia.com/ask/answers/04/022004.asp or http://www.investopedia.com/ask/answers/120.asp for explanations). It is recommended that we ignore stocks so designated in these exercises.

Problem #1: A firm with a normalized pretax income of $40 million, 25% tax rate, and a Total Debt/Total Capital ratio of 30%, decides to undertake a capital expansion financed by new debt. The new level of debt will raise the Total Debt/Total Capital ratio to 40% (5-percentage points above its industry average). As a result, the firm’s credit rating is downgraded by a full level (say for example, from A to B) despite being secured by specific assets. This credit downgrade raises the firm’s Weighted Average Cost of Capital (aka Required Rate of Return) from 10% to 11.5%

1. What is the value of the firm prior to the downgraded credit rating?
2. Assuming the firm’s capital expansion program will lead to a 20% increase in normalized pretax income what is the firm’s value in the aftermath of the credit downgrade?

Problem #2: How would your answer to Problem #1 change if the debt was unsecured? Specifically, what might the credit rating be under an unsecured format and how would this affect the value of the firm? Explain or provide your reasoning.

Problem #3: How would your answers to Problems #1 and #2 be affected by the percentage of insider ownership of equity and what life-cycle stage the firm is in? Explain or provide your reasoning.

Citron Company is a wholesale distributor of children's clothing. During the year, it donates clothes (cost of $60,000; retail value of $100,000) to Clothes for Needy (a qualified charitable organization). Disregarding percentage limitations, Citron's charitable contribution deduction is:

a.$80,000 if Citron is an individual.

b.$100,000 if Citron is a C corporation.

c.$60,000 if Citron is a C corporation.

d.$80,000 if Citron is a C corporation.

e.None of these choices are correct.

Skinner Corporation, a calendar year C corporation, had the following transactions during 2019:

Skinner's taxable income (or NOL) for 2019 is:

a.$60,000 NOL.

b.$100,000 taxable income.

c.$30,000 NOL.

d.$100,000 NOL.

e.None of these choices are correct.

During the 2019, Goose Corporation (a calendar year, cash basis taxpayer) receives cash dividends as follows:

Presuming the taxable income limitation does not apply, Goose Corporation's dividends received deduction for 2019 is:

a.$144,000.

b.$126,000.

c.$135,000.

d.$159,000.

e.None of these choices are correct.

Konig Enterprises, Ltd., owns and operates three restaurants in Vancouver, B.C. The company allocates its fixed administrative expenses to the three restaurants on the basis of sales dollars. Last year the fixed administrative expenses totaled $880,000 and were allocated as follows:

This year the Imperial Garden restaurant increased its sales by $1 million. The sales levels in the other two restaurants remained unchanged. The company’s sales data for this year were as follows:

Fixed administrative expenses for this year remained unchanged at $880,000.

Required:

1. Using sales dollars as an allocation base, show the allocation of the fixed administrative expenses among the three restaurants for this year.

2. Calculate the change in each restaurant’s allocated cost from last year to this year.

3. Is sales dollars a good base for allocation of fixed costs?

- This is the question.

A salesman for a new manufacturer of cellular phones claims not only that they cost the retailer less but also that the percentage of defective cellular phones found among his products, ( p1), will be no higher than the percentage of defectives found in a competitor's line, ( p2 ). To test this statement, the retailer took a random sample of 135 of the salesman's cellular phones and 175 of the competitor's cellular phones. The retailer found that 14 of the salesman's cellular phones and 8 of the competitor's cellular phones were defective. Does the retailer have enough evidence to reject the salesman's claim? Use a significance level of α = 0.01 for the test. 1 of 6: State the null and alternative hypotheses for the test Step 2 of 6: Find the values of the two sample proportions, pˆ1 and pˆ2. Round your answers to three decimal places. Step 3 of 6: Compute the weighted estimate of p, ‾‾p. Round your answer to three decimal places Step 4 of 6: Compute the value of the test statistic. Round your answer to two decimal places. Step 5 of 6: Determine the decision rule for rejecting the null hypothesis H0. Round the numerical portion of your answer to two decimal places. Step 6 of 6: Make the decisi on for the hypothesis test. Reject or Fail to Reject Null Hypothesis.

Konig Enterprises, Ltd., owns and operates three restaurants in Vancouver, B.C. The company allocates its fixed administrative expenses to the three restaurants on the basis of sales dollars. Last year the fixed administrative expenses totaled $970,000 and were allocated as follows:

This year the Imperial Garden restaurant increased its sales by $1 million. The sales levels in the other two restaurants remained unchanged. The company’s sales data for this year were as follows:

Fixed administrative expenses for this year remained unchanged at $970,000.

Required:

1. Using sales dollars as an allocation base, show the allocation of the fixed administrative expenses among the three restaurants for this year.

2. Calculate the change in each restaurant’s allocated cost from last year to this year.

3. Is sales dollars a good base for allocation of fixed costs?