A poll was taken this year asking college students if they considered themselves overweight. A similar poll was taken 5 years ago. Five years ago, a sample of 270 students showed that 120 considered themselves overweight. This year a poll of 300 students showed that 140 considered themselves overweight. At a 5% level of significance, test to see if there is any difference in the proportion of college students who consider themselves overweight between the two polls. What is your conclusion?

There is a 9%, 23 year note bond which has a ytm of 9%. The ytm alters by one percent down. By how much does the price alter? If the ytm drops by 2%, by how much does the price change?

What is the exact percentage change of the bond in the 2 cases?

Please show all work and the formula(s) used.

1. If the interest rate is 7% and an asset pays 100 per year for 5 years, starting now, show the present value of the income stream (to 2 decimal places) is $438.72.

2. What is adverse selection?

3. Give an example of adverse selection.

4. What is moral hazard?

5. Give an example of moral hazard.

6. What are the assumptions/conditions of perfectly competitive capital markets? We assumed 2 periods but in practice people also assume other numbers, it is not critically important the exact number if there is more than 1 period.

7. Use the two period model of utility maximization (we will always assume perfectly competitve capital markets in this model) to show the impact on a borrower if the market interest rate increases. Hint: they are worse off.

8. Consider a world with two goods, X and Y. Please label all diagrams fully. a. Using an indifference curve diagram(s) derive the demand curve for X if the goods are: i. Complements ii. Substitutes b. Discuss the similarities and differences between the demand curves for the two cases in part (a).

9. Explain and discuss, using a diagram, the effect of a minimum wage above the market/equilibrium wage in a monopsony. Please label all diagrams fully.

What is the future value of $2,200 per year for 29 years at an interest rate of 6.39 percent?

(Please note that the problem starts by saying "Last year", this means that N will equal 18 (9x2) and not 20 (10x2).

Last year Carson Industries issued a 10-year, 12% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,060 and it sells for $1,150.

a)

a1. What is the bond's nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places.
  %

a2. What is the bond's nominal yield to call? Do not round intermediate calculations. Round your answer to two decimal places.
  %

a3. Would an investor be more likely to earn the YTM or the YTC?
-Select-: 1) Since the YTM is above the YTC, the bond is likely to be called. 2)Since the YTC is above the YTM, the bond is likely to be called 3) Since the YTM is above the YTC, the bond is not likely to be called. 4) Since the YTC is above the YTM, the bond is not likely to be called. 5)Since the coupon rate on the bond has declined, the bond is not likely to be called.

b)

b1. What is the current yield? (Hint: Refer to Footnote 6 for the definition of the current yield and to Table 7.1) Round your answer to two decimal places.
  %

b2. Is this yield affected by whether the bond is likely to be called?

1. If the bond is called, the capital gains yield will remain the same but the current yield will be different.
2. If the bond is called, the current yield and the capital gains yield will both be different.
3. If the bond is called, the current yield and the capital gains yield will remain the same but the coupon rate will be different.
4. If the bond is called, the current yield will remain the same but the capital gains yield will be different.
5. If the bond is called, the current yield and the capital gains yield will remain the same.

C)

C1. What is the expected capital gains (or loss) yield for the coming year? . Use amounts calculated in above requirements for calculation, if required. Negative value should be indicated by a minus sign. Round your answer to two decimal places.

  %

C2. Is this yield dependent on whether the bond is expected to be called?

1. The expected capital gains (or loss) yield for the coming year does not depend on whether or not the bond is expected to be called.
2. If the bond is expected to be called, the appropriate expected total return is the YTM.
3. If the bond is not expected to be called, the appropriate expected total return is the YTC.
4. If the bond is expected to be called, the appropriate expected total return will not change.
5. The expected capital gains (or loss) yield for the coming year depends on whether or not the bond is expected to be called.

United Resources Company obtained a charter from the state in January of this year. The charter authorized 201,000 shares of common stock with a par value of $2. During the year, the company earned $478,000 Also during the year, the following selected transactions occurred in the order given:

a. Sold 97,000 shares of the common stock in an initial public offering at $19 cash per share.

b. Repurchased 25,000 shares of the previously issued shares at $22 cash per share.

c. Resold 5,000 of the shares of the treasury stock at $25 cash per share.

Required:

Prepare the stockholders' equity section of the balance sheet at the end of the year.

Mason Corporation began operations at the beginning of the current year. One of the company’s products, a refrigeration element, sells for $195 per unit. Information related to the current year’s activities follows.

Mason carries its finished goods inventory at the average unit cost of production and is subject to a 30 percent income tax rate. There was no work in process at year-end.

1.)Determine the cost of the December 31 finished goods inventory.

2.)Compute Mason’s net income for the current year ended December 31.

3.)If next year’s production decreases to 23,000 units and general cost behavior patterns do not change, what is the likely effect on

The direct-labor cost of $36 per unit?

No change

Increase

Decrease

The fixed manufacturing overhead cost of $600,000?

No change

Increase

The fixed selling and administrative cost of $860,000?

No change

Increase

Decrease

The average unit cost of production?

No change

Increase

Decrease

There is a 9%, 23 year note bond which has a ytm of 9%. The ytm alters by one percent down. By how much does the price alter? If the ytm drops by 2%, by how much does the price change? What is the exact percentage change of the bond in the 2 cases?

1. Marc and Michelle are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Marc contributed $2,500 to an individual retirement account and he also paid alimony to a prior spouse in the amount of $1,500. Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $2,000 child tax credit for Matthew. Marc and Michelle paid $6,000 of expenditures that qualify as itemized deductions and they had a total of $3,500 in federal income taxes withheld from their paychecks during the course of the year.

c.       What is the total amount of Marc and Michelle’s deductions from AGI?

d.      What is Marc and Michelle’s taxable income?

e.       What is Marc and Michelle’s taxes payable or refund due for the year (use the tax rate schedules)?