Tables 1 and 2 show the quantities of the goods that Suzie bought and the prices she paid during two consecutive weeks. Suzie’s CPI market basket contains the goods she bought in Week 1. Calculate the cost of Suzie’s CPI market basket in Week 1 and in Week 2. What percentage of the CPI market basket is gasoline? Calculate the value of Suzie’s CPI in Week 2 and her inflation rate in Week 2.

Table 1 Data for Week 1

Item

Quantity

Price (per unit)

Coffee

11 cups

$3.25

DVDs

1

$25.00

Gasoline

15 gallons

$2.50

Table 2 Data for Week 2

Item

Quantity

Price (per unit)

Coffee

11 cups

$3.25

DVDs

3

$12.50

Gasoline

5 gallons

$3.00

Concert

1 ticket

$95.00

Use the following information to work Problems 4 and 5.

The GDP price index in the United States in 2000 was about 90, and real GDP in 2000 was $11 trillion (2005 dollars). The GDP price index in 2010 was about 111, and real GDP in 2010 was $13.1 trillion (2005 dollars).

Calculate nominal GDP in 2000 and in 2010 and the percentage increase in nominal GDP between 2000 and 2010.What was the percentage increase in production between 2000 and 2010, and by what percentage did the cost of living rise between 2000 and 2010?

The project will last for 8 years, beginning in 2011 (year 0) and ending in 2019 (year 8). Depreciation is straight line to zero, and taxation (at the time) is 35% in the United States. In any year with a negative EBIT, there is no tax. The capital investment for the fibre line project is $350,000,000 (invested in year 0), including costs of amplification sites, earthmoving equipment, easements etc. Working capital is expected to be $60,000,000, returned at the end of the project. A 24 hours a day, 7 days a week maintenance team is required to ensure 99.99% operational capacity, costing $60 million per year, and increasing at 3% per year. The project success hinges on access to the fibre ports in the exchanges, they know this and charge $50,000,000 per year (combined), declining by 5% p.a. as demand declines.      A team of surveyors and builders who inspected the 1400 km path cost $1.5 million. At the end of the project, the technology is obsolete for its purpose in investment banking, but it can be sold to a telecom provider (contributing to the revenue for year 8) for $127,000,000. Revenue is subscription based at $3,600,000 per year, per subscription. In year 1 there will be 200 subscriptions, year 2 is 150, year 3 is 100, year 4 is 50. In year 5, 6, 7, 8 only 20 subscriptions are taken in per year. The all-important discount rate is 14.5%.

Question: What is the NPV and IRR using excel?

What motivates employees? The Great Place to Work Institute evaluated nonfinancial factors both globally and in the United States. The results, which indicate the importance rating of each factor, are stored in Table 6. These items were chosen carefully to match each by a common characteristic or factor. At the 0.05 level of significance, is there evidence of a difference in the mean rating between global and U.S. employees? The first few lines of data are shown below:

Factor Global US

Being treated with respect 119 123

Work/life balance 111 112

The type of work that you do 110 111

The quality of people you work with 107 111

The quality of the leadership of the organization 107 112

Base Pay 106 104

What is the null hypothesis for the mean test?

2. Referring to Table 6, what is the upper limit of 90% confidence interval?

3. Referring to Table 6, what is the interpretation of the confidence interval?

Question # 2 The city of Atlanta, Georgia enacted an ordinance that imposes significant restrictions on the installation of outdoor advertising within the city. The express objectives of the ordinance are “to eradicate risks to motorists and other citizens caused by potentially distracting outdoor advertising” and “to maintain and enhance the attractiveness of Atlanta.” The ordinance allows certain commercial advertising (signs advertising products obtainable at the location where the sign is placed), but outlaws other types of outdoor advertisements, both commercial and non-commercial, unless expressly allowed by one of the ordinance’s 10 stated exclusions, such as impermanent political election signs. Big Al’s Big Ads Inc., and other organizations involved in outdoor advertising in the city when the ordinance was enacted, brought suit in state court alleging that the ordinance was unconstitutional. They sought an injunction against enforcement of the ordinance. The trial court determined that the ordinance was an unconstitutional violation of Big Al’s First Amendment rights. The Georgia Court of Appeals affirmed, but the Georgia Supreme Court reversed, holding, among other things, that the ordinance was not invalid under the First Amendment. Big Al’s and the other companies appeal to the United States Supreme Court and the Court agrees to hear the case. How does the Court generally deal with issues involving freedom of speech? How will the Court deal with the issues presented by this particular case? Fully discuss how the Court would likely analyze this case.

The mortgage on your house in Winnipeg is five years old. It required monthly payments of $1402, had an original term of 30 years, and had an interest rate of 9% (APR with semiannual compounding). In the intervening five years, interest rates have fallen, housing prices in the United States have fallen, and you have decided to retire to Florida. You have decided to sell your house in Winnipeg and use your equity for the down payment on a condo in Florida. You will roll over the outstanding balance on your old mortgage into a new mortgage in Florida. The new mortgage has a 30-year term, requires monthly payments, and has an interest rate of 6.625% (APR with monthly compounding, which is typical for U.S. mortgages).

1. What monthly repayments will be required with the new loan?

2. If you still want to pay off the mortgage in 25 years, what monthly payment should you make on your new mortgage?

3. Suppose you are willing to continue making monthly payments of $1402. How long will it take you to pay off the new mortgage?

4. Suppose you are willing to continue making monthly payments of $1402, and you want to pay off the mortgage in 25 years. How much additional cash can you borrow today as part of the new financing?

** please show the complete work out/steps with formulas. No excel sheets.**

A swap is initiated between Microsoft and Intel in which Microsoft receives a 6-month LIBOR and pays a fixed rate for every 6 months for 1 year on a notional principal of $100 million. Assuming that 6-month, 12-month, 18-month spot rates (zero rates) are 4.3%, 4.7%, 4.9% with continuous compounding, respectively, the swap rate under this swap should be closest to

Select one:

a. 4.95%

b. 4.55%

c. 4.35%

d. 4.75%

The two-month interest rates with continuous compounding in Australia and the United States are 4.2% and 3.5% per annum, respectively. The spot exchange rate is currently priced at USD 0.780 per AUD. Given the two-month forward contract on the Australian dollars in the market is currently priced at USD 0.782 per AUD, which transactions should an investor take today in order to take advantages of this arbitrage opportunity?

Select one:

a. The forward is underpriced; the investor should buy the forward contract, borrow USD and lend AUD

b. The forward is underpriced; the investor should buy the forward contract, borrow AUD, and lend USD

c. The forward is overpriced; the investor should sell the forward contract, borrow AUD and lend USD

d. The forward is overpriced; the investor should sell the forward contract, borrow USD and lend AUD

3a.

The supply curve of dollars in the foreign exchange market reflects the activities of American _________ and ________ investors.

-importers; Mexican

-importers; American

-exporters; Mexican

-exporters; American

b.

A nation whose interest rate is rising relatively fast will see its securities become ________ attractive to foreigners. Its currency will __________.

-more; depreciate

-more; appreciate

-less; depreciate

-less; appreciate

c.

The curve representing the demand for dollars in the foreign exchange market is downward sloping because, when the price of a dollar (the exchange rate) decreases, _________ because they have become relatively ____________.

-Americans demand more foreign goods; less expensive

-foreigners demand fewer American goods; more expensive

-Americans demand fewer foreign goods; more expensive

-foreigners demand more American goods; less expensive

d.

The Japanese yen depreciates relative to the US dollar. What should we expect?

-A decrease in the number of U.S. tourists visiting Japan

-An increase in the Japanese demand for U.S. goods

-An increase in the U.S. demand for Japanese goods

-An increase in the number of Japanese tourists visiting the United States

e.

A situation in which goods cost the same in one country as in another when prices are compared using the market exchange rate is referred to as ___________.

-cost equivalence

-a currency union

-exchange rate neutrality

-purchasing power parity

The Chief Executive Officer (CEO) is a top corporate manager whose primary job is to lead the day-to-day running of the corporation and whose primary goal is to maximize shareholder value. To incentivize CEOs, many large corporations have been compensating CEOs with various forms of pay-for-performance in addition to a fixed annual salary. According to some estimates, over the last two decades CEO compensation in the United States has on average increased by 600%, with a disproportionate increase in equity-based compensation (e.g. stock options). These increases in executive compensation, particularly stock options, have generated enormous controversy. The recent high-profile corporate scandals and financial market tsunami have led some observers to argue that the excessive focus on shareholder value maximization in general, and inadequately designed executive compensation in particular, have led to managerial gross misbehavior as well as short-termism. Some argue that rapid increases in executive compensation represent unmerited transfers of shareholder wealth to top executives with limited if any incentive effects, and at times have led to outright frauds. The problem is exacerbated when the CEO is also the chairman of the board of directors. The adverse effects of excessive CEO compensation are particularly severe in countries where institutional checks such as shareholder protection and shareholder activism are weak.

Required：

1. Discuss what the relative strengths and weakness of the corporate governance system are.

The table contains real data for the first two decades of AIDS reporting.

1.) Graph “year” versus “# AIDS cases diagnosed” (plot the scatter plot). Do not include pre-1981 data. In excel using formula's

2.) Find the regression equation, Interpret slope, Find r. and Describe linear correlation.

3.) When x = 1985, ŷ = _____

When x = 1990, ŷ =_____

When x = 1970, ŷ =______ Why doesn’t this answer make sense?

4.)  What does the correlation imply about the relationship between time (years) and the number of diagnosed AIDS cases reported in the U.S.?

Suppose that the Treasury bill rate is 5% rather than 2%. Assume the expected return on the market stays at 9%. Use the following information. Stock Beta (β) United States Steel 3.10 Amazon 1.36 Southwest Airlines 1.24 The Travelers Companies 1.17 Tesla 0.99 ExxonMobil 0.93 Johnson & Johnson 0.92 Coca-Cola 0.59 Consolidated Edison 0.16 Newmont 0.10 Calculate the expected return from Johnson & Johnson. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Find the highest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Find the lowest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Would U.S. Steel offer a higher or lower expected return if the interest rate were 5% rather than 2%? Assume that the expected market return stays at 9%. Would Coca-Cola offer a higher or lower expected return if the interest rate were 8%? a. Expected return % b. Highest Expected return % c. Lowest expected return % d. Would U.S. Steel offer a higher or lower expected return? e. Would Coca-Cola offer a higher or lower expected return?