On January 1, 2015, the American Company borrowed 500,000 euros when the euro was worth $2. Information about this loan is as follows:                                                                                                  

Term of loan is 3 years                                                                              

Interest payment dates   - July 1 and January 1 of each year                                                                                       

Interest rate is 10%                                                                                    

On July 1, 2015, the Euro is worth $2.11                                                                                                                          

On December 31, 2015 (January 1, 2016), the euro is worth $2.09                                              

On July 1, 2016, the Euro is worth $2.05                                                                                                                          

On December 31, 2016 (January 1, 2017) the Euro is worth $1.99                                               

On July 1, 2017, the Euro is worth $1.98                                                                                                                          

On December 31, 2017 (January 1, 2018) the Euro is worth $2.01

REQUIRED: Make all necessary journal entries American Company makes connected with this loan [begin with getting the cash and signing the note]

1. A random sampling of 60 pitchers from the National League and 74 pitchers from the American League showed that 38 National and 36 American League pitchers had E.R.A's below 3.5.

Find the test statistic that would be used to test the claim that the proportion of the NL pitchers with E.R.A. below 3.5 is higher than the proportion of the AL pitchers with similar stats.

Round your answer to three decimal places.

2. Two independent samples are randomly selected and come from populations that are normal. The sample statistics are given below:

n1 = 47 n2 = 52

1 = 24.2 2 = 18.7

s1 = 5.0 s2 = 5.6

Find the standardized test statistic t to test the hypothesis that μ1 = μ2. Round your answer to three decimal places.

1. Let x be the number of errors that appear on a randomly selected page of a book. The table lists the probability distribution of x.

1. Find the mean of x                                           b) Standard the deviation

2. According to a consulting firm 20% of adults say that they most often use their vacation time for international travel. Assume that this result is true for the current population of all American adults.

1. Using the Binomial formula, find the probability that in a random sample of 12 American
2. adults the number who most often use their vacation time for international travel is

1. Exactly 6

2. None

3. At least 6

4. At most 3

2. Approximate the probability that fewer than 80 have hypertension.

3. A researcher was interested in whether American Basset Hounds were taller than European Basset Hounds. The average height for a European Basset Hound in the population is 12" (? = 1"). She took a sample of 14 American Basset Hounds and found that their average height was 13":

a) What is the IV?

b) What is the DV?

c) What is the research question?

d) What is the Null Hypothesis in symbols and in words?

e) What is the Research Hypothesis in symbols and in words?

f) Is this a directional or a non-directional hypothesis?

g) Compute the z-score for the sample’s mean.

h) What is the critical z-score for rejecting the Null hypothesis?

i) Do you reject or fail to reject the Null hypothesis?

j) What would be your conclusion about the new production methods given your results?

“Knives Out” is an American murder-mystery film released in 2019. In the film, a wealthy crime novelist is murdered in his home. The plot of the movie is to find the murderer. Before any evidence is gathered, all family members and persons employed by the murder victim are considered as suspects. There are 14 such people in total. Only 1 person out of the 14 suspects is the murderer. The technology company Apple permits its products to be used in films, but bad characters can’t have an iPhone onscreen. That is, the murderer cannot be seen in the film using an Apple iPhone. Seven out of the fourteen murder suspects are observed in the film to be using an Apple iPhone. It is estimated that 45% of the American population use an Apple iPhone. The murder victim’s eldest daughter, Linda, did not murder her father. What is the probability that Linda uses an Apple iPhone?

Each American family is classified as living in an urban, rural, or suburban location. During a given year, 10% of all urban families move to a suburban location, and 5% move to a rural location; also, 18% of all suburban families move to an urban location, and 4% move to a rural location; finally, 4% of all rural families move to an urban location, and 6% move to a suburban location.

1- If a family now lives in an urban location, what is the probability that it will live in an urban area two years from now? A suburban area? A rural area?

2- Suppose that at present, 45% of all families live in an urban area, 35% live in a suburban area, and 20% live in a rural area. Two years from now, what percentage of American families will live in an urban area?

1. An imaginary study states that an American household spends an average of $1250 per year on soft drinks. The standard deviation for the study is $225. If 30 American households are selected at random, what is the probability that they spend an average of between $1180 and $1270 per year on soft drinks?

2. The average number of deaths per week for Covid 19 patients in the U.S. since March 21st is 9,433, with a standard deviation of 4733. If a week is chosen at random, what is the probability that there were more than 6000 deaths in that week?

3. The average distance a baseball was tossed by students trying out for the little league team was 65 ft., with a standard deviation of 8 ft. If the top 20% of these players will be chosen for the team, what is the least distance necessary to throw the ball to make the team?

In class we learned that investors should always hold a portfolio that is on the efficient frontier. In reality investors often hold a portfolio that is not on the efficient frontier. One reason for this is called home bias. Home bias refers to the fact that investors tend to have larger portfolio weights on assets that are located in the country in which they live. So, American investors tend to have a larger portfolio weight on American firms than is optimal. One explanation for the home bias puzzle is that investors often have less information about foreign investments than they do domestic ones, making it easier for them to forecast the returns on domestic stocks compared to foreign ones.

Assuming this theory is correct explain: How this helps to resolve the home bias puzzle in the context of the mean variance preferences?

The white sands company has $1,000-par-value bonds outstanding with the following characteristics:

currently selling at par; 5 years until final maturity; and a 9 percent coupon rate (with interest paid semiannually). Interestingly, American Express has a very similar bond issue outstanding. In fact, every bond feature is the same as for the white sands bonds, except that American express bonds mature in exactly 10 year. Now, assume that the market’s nominal annual required rate of return for both bond issues suddenly fell from 9 percent to 8 percent.

Required:

a) At the market’s new, lower required rate of return for these bonds, determine the price for each bond. [10]

b) Also, explain which the bond’s price increased the most, and by how much?