1. According to the CPI, the overall inflation rate from Sept. 2019 - Sept. 2020 was 1.4% for consumer goods and services. However, that doesn't mean prices for everything went up. Referring to the table above, which of the following categories of spending did not have price increases from Sept. 2019 - Sept. 2020? (more than one answer)

a. transportation b. tuition c. food and beverages d. housing e. medical services

2. Using the index numbers above, calculate the rate of inflation for alcoholic beverages from Sept. 2019 - Sept. 2020. (calculate within one decimal point)

[Hint: start with the formula for calculating the % rate of inflation from the text and lecture]

Q.1 The budget department of ABC Ltd., gathered the following information for preparing its budgets for forthcoming period. 1. Sales forecast. Product Sales Quantity Selling price Inventories 01-01-2019 31-12-2019 Product-A 30,000 units Rs. 30 per unit. 5,000 units 10,000 units Product-B 40,000 units Rs. 40 per unit. 10,000 units 15,000 units Materials Purchase budget. 2. Material Product Inventories A B 01-01-2019 31-12-2019 Price per kg Materials-X 2kg 1kg 25,000kg 30,000kg Rs.2.0 Materials-Y 1kg 3kg 10,000 kg 15,000 kg Rs.1.0 3. Labor budget. Hour per unit Rate per hour Product –A 2 hours Rs 5 per hour Product-B 3 hours Rs. 4 per hour 1/4 4. Factory Overhead Factory overhead rate is Rs.2 per direct labor hour. Required:- (Marks-08) a. Prepare Sales budget product wise and total. b. Production budget in quantity product wise and total. c. Purchase budget in quantity and Rupees. d. Labor cost budget Rupees. e. Factory overhead budget Rupees. f. Manufacturing cost per unit of product-A, B and C. g. Discuss the behavioral issues that you may face while implementing budgeting in Pakistani environment. (Marks-02)  

You plan to invest in the Kish Hedge Fund, which has total capital of $500 million invested in five stocks:

Kish's beta coefficient can be found as a weighted average of its stocks' betas. The risk-free rate is 3%, and you believe the following probability distribution for future market returns is realistic:

1. What is the equation for the Security Market Line (SML)? (Hint: First determine the expected market return.)
   1. r_i = 1.5% + (11.8%)b_i
   2. r_i = 3.0% + (9.5%)b_i
   3. r_i = 2.7% + (10.7%)b_i
   4. r_i = 2.7% + (9.5%)b_i
   5. r_i = 3.0% + (10.7%)b_i

   -Select-

2. Calculate Kish's required rate of return. Do not round intermediate calculations. Round your answer to two decimal places.

     %

3. Suppose Rick Kish, the president, receives a proposal from a company seeking new capital. The amount needed to take a position in the stock is $50 million, it has an expected return of 14%, and its estimated beta is 1.4. Should Kish invest in the new company?

   The new stock -Select-should or should not

   At what expected rate of return should Kish be indifferent to purchasing the stock? Round your answer to two decimal places.

     %

a) Perform a statistical test to see whether the average loans of customers before the change at the Bank of America and Wells Fargo are different.

Loans before the change at Bank of America:  

51.2
46.1
43.4
44.1
50.2
39.1
35.6
49.3
37.4
49.3
52.9
50.0
37.7
53.0
45.7
36.9
43.4
41.2
54.9
55.0
36.8
38.6
37.1
49.9
47.2
46.0
39.9
53.9
35.5
54.3
36.8
42.0
50.5
50.3
44.7
37.6
35.3
39.8
48.7
51.5

Loans before the change at Wells Fargo:

50.4
42.9
52.2
44.7
40.6
38.2
46.6
47.0
53.5
36.5
47.7
45.8
44.5
38.3
54.3
54.5
44.5
42.4
52.3
50.7
43.7
54.5
38.7
44.5
52.5
53.0
48.6

Increase in loans at BoA:

12.2
8.4
1.3
13.2
5.5
7.4
14.0
-5.1
23.2
7.2
-3.9
12.8
23.7
-2.4
-1.0
7.8
6.7
18.0
-0.1
0.4
8.9
20.5
18.1
9.6
-1.3
1.2
18.5
4.2
28.0
8.7
24.2
5.4
-6.1
13.4
5.0
20.4
13.5
17.4
14.8
-7.9
Increase in loans at Wells Fargo

4.5
16.1
5.0
7.5
19.3
10.0
12.9
11.3
5.1
20.1
14.4
13.1
13.3
10.3
-5.1
-2.1
18.4
13.9
10.3
-4.8
17.3
-1.9
6.9
12.3
0.8
-5.7
10.1
8.2

b) Construct a 95% confidence interval for the difference of average loans of customers before the change at the Bank of America and Well Fargo branch.

The following trial balance was taken from the books of Coyote Company as of December 31, 2019.

            Account                                     Debit Credit

Cash                                                                $30,000

Accounts receivable                               40,000

Allowance for doubtful accounts                                 $ 1,000

S-T Notes receivable                              20,000

Inventory, January 1, 2019                     40,000

Furniture and equipment                        110,000

Accumulated depreciation of F & E                             20,000

Patents                                                 100,000

Accounts payable                                                          22,000

Bonds payable                                                            20,000

L-T notes payable                                                       15,000

Common stock                                                            140,000

Retained earnings                                                         40,000

Sales                                                                            550,000

Purchase                                                 278,000

Insurance expense                                  20,000

Salary expense                                  120,000

Rent expense 50,000

Totals                                                   808,000         808,000

At the year end, the following items have not been recorded.

1. Prepaid insurance expired during the year, $8,000.
2. Estimated bad debts, 1.0% of sales.
3. Inventory as of 12/31/2019 turned out to be $60,000.
4. Five months’ rent of $50,000 was paid in advance on October 1, 2019 and charged to rent expense then.
5. Furniture and equipment have an average useful life of 4 years and salvage value of $10,000. Coyote Company uses the straight-line method of depreciation.
6. Utility bill of $1,600 for the month of December 2019 will be paid on its due date, January 10, 2020.
7. Salaries earned but not yet paid by December 31, 2019, $7,000.

Instruction: prepare

1. Any necessary adjusting entries at the end of 2019.
2. Income Statement and statement of retained earnings, and balance sheet of the company for the year 2019.
3. Any necessary closing entries at the end of 2019.

You observe the following term structure of interest rates (zero-coupon yields, also called "spot rates"). The spot rates are annual rates that are semi-annually compounded.

Compute the six-month forward curve, i.e. compute f(0,0.5,1.0), f(0,1.0,1.5), f(0,1.5,2.0), f(0,2.0,2.5), and f(0,2.5,3.0). Round to six digits after the decimal. Enter percentages in decimal form, i.e. enter 2.1234% as 0.021234.

In all the following questions, enter percentages in decimal form, i.e. enter 2.1234% as 0.021234. Assume semi-annual compounding.

Compute the one-year forward rate in six months, i.e. compute f(0,0.5,1.5)

Compute the one-year forward rate in one year, i.e. compute f(0,1.0,2.0)

Compute the one-year forward rate in two years, i.e. compute f(0,2.0,3.0)

Compute the 1.5-year forward rate in six months, i.e. compute f(0,0.5,2.0)

Compute the 1.5-year forward rate in one-year, i.e. compute f(0,1.0,2.5)

Compute the 1.5-year forward rate in 1.5-years, i.e. compute f(0,1.5,3.0)

Compute the two-year forward rate in six-months, i.e. compute f(0,0.5,2.5)

Compute the two-year forward rate in one-year, i.e. compute f(0,1.0,3.0)

Compute the 2.5-year forward rate in six-months, i.e. compute f(0,0.5,3.0)

A 60-year-old woman came to her physician because she was having problems with urination. Her previous history included hypertension and episodes of edema. The physician ordered various laboratory tests on blood drawn in his office. The results are shown in Case Study Table 14-4.1. Questions 1. What are the abnormal results in this case? 2. Why do you think the triglycerides are abnormal? 3. What is the primary disease exhibited by this patient’s laboratory data?

CASE STUDY TABLE 14-4.1 LABORATORY RESULTS PATIENT REFERENCE ANALYTE VALUES RANGE Na 149 135–143 mEq/L K 4.5 3.0–5.0 mEq/L Cl 120 98–103 mEq/L CO2 content 12 22–27 mmol/L Total protein 5.7 6.5–8.0 g/dL Albumin 2.3 3.5–5.0 g/dL Ca2 7.6 9.0–10.5 mg/dL Cholesterol 201 140–200 mg/dL Uric acid 15.4 3.5–7.9 mg/dL Creatinine 4.5 0.5–1.2 mg/dL BUN 87 7–25 mg/dL Glucose 88 75–105 mg/dL Total bilirubin 1.3 0.2–1.0 mg/dL Triglycerides 327 65–157 mg/dL Lactate 200 90–190 IU/L dehydrogenase Aspartate 45 8–40 IU/L transaminase Amylase 380 76–375 IU/L

You plan to invest in the Kish Hedge Fund, which has total capital of $500 million invested in five stocks:

Kish's beta coefficient can be found as a weighted average of its stocks' betas. The risk-free rate is 6%, and you believe the following probability distribution for future market returns is realistic:

1. What is the equation for the Security Market Line (SML)? (Hint: First determine the expected market return.)
   
   1. r_i = 5.7% + (9.5%)b_i
   2. r_i = 6.0% + (9.1%)b_i
   3. r_i = 4.0% + (10.4%)b_i
   4. r_i = 6.0% + (9.5%)b_i
   5. r_i = 5.7% + (9.1%)b_i
   
   -Select-IIIIIIIVVItem 1
   
2. Calculate Kish's required rate of return. Do not round intermediate calculations. Round your answer to two decimal places.
     %
   
3. Suppose Rick Kish, the president, receives a proposal from a company seeking new capital. The amount needed to take a position in the stock is $50 million, it has an expected return of 14%, and its estimated beta is 1.5. Should Kish invest in the new company?
   The new stock -Select-should notshouldItem 3 be purchased.
   
   At what expected rate of return should Kish be indifferent to purchasing the stock? Round your answer to two decimal places.
     %

1) Investigators found a RR = 1.90 to explain the association between maternal education (high vs. low) and onset of adolescent eating disorders. They should therefore conclude that adolescents whose mothers had high education had a 90% greater risk of developing eating disorders than adolescents whose mothers had low education.

A. True

B. False

2) When examining an association between an exposure and an outcome, researchers may find a small effect that is statistically significant but could lack practical importance or "clinical significance."

A. True

B. False

3) Effect modification occurs when the effect of the exposure on the outcome is modified by a third variable. A. True B. False 59. Investigators are exploring the relationship between number of hours worked per week and cardiovascular disease among academic faculty in the United States. During their analysis, they find that the number of hours worked per week and cardiovascular disease are both associated with sedentary behavior (number of hours sitting). Is sedentary behavior more likely to be a confounder or a mediator of this association between number of hours worked and cardiovascular disease?

A. Confounder

B. Mediator

4)

Investigators explored the relationship between coffee drinking and osteoporosis using a case-control study. They calculated the overall odds ratio and odds ratios among smokers and non-smokers. The results are shown below.

OR (overall) = 2.20

OR (smokers) = 5.0   

OR (non-smokers) = 1.0

In this example, would smoking be best considered an effect modifier, mediator, or confounder for the relationship between coffee consumption and osteoporosis?

A. Confounder

B. Mediator

C. Effect modifier

Ratio Analysis: