Suppose the US economy is in recession. The unemployment rate is 7% and the Federal Reserve Bank is considering using monetary policy to expand output. Assume the bank knows, with certainty, that:

i.             absent changes in monetary policy, unemployment will still be 7% next year;

ii.           the natural rate of unemployment is 5%;

iii.          from Okun's law, 1% more output growth for a year leads to a 0.4% reduction in the unemployment rate.

Also assume the bank can effectively use monetary policy to increase output growth rates as desired, i.e., the interest rate is sufficiently far away from the zero lower bound. However, the bank is uncertain about the effect that changes in its policy rate, the Official Cash Rate (OCR), have on output growth. To inform its decisions, the monetary policy committee summons the research department to produce predictions of the one-year response of US output growth to a decrease of 1% in the OCR. The research department, using three different macroeconometric models, presents the results from three different models:

Model (a): output growth is predicted to increase by 1.0% (moderate monetary transmission channel)

Model (b): output growth is predicted to increase by 0.6% (weak monetary transmission channel)

Model (c): output growth is predicted to increase by 2.0% (strong monetary transmission channel)

The research department further informs that each model prediction is equally likely, and that effects for OCR changes different than -1% are proportional to these predictions, e.g.: a decrease of 2% in the OCR is predicted to increase output growth by 2% according to model (a), 1.2% according to model (b), and 4% according to model (c), and so on.

Using the scenario information above answer the following questions.

Note: for the numerical questions, please provide a numerical answer in percentage points, e.g., 1 for 1%, -2 for -2%, etc.

What is the output growth rate needed to lower the unemployment rate to the natural rate of unemployment?

A 52-year-old man went to his physician for a physi- cal examination. The patient had been a district manager for an automobile insurance company for the past 10 years and was 24 pounds overweight. He had missed his last two appointments with the phy- sician because of business. The urinalysis dipstick finding was not remarkable. His blood pressure was elevated. The blood chemistry results are listed

Questions 1. Given the abnormal tests, what additional information would you like to have?

2. If this patient had triglycerides of 100 mg/dL (1.1 mmol/L) and an HDL-C of 23 mg/dL (0.6 mmol/L), what would be his calculated LDL-C value?

3. If, however, his triglycerides were 476 mg/dL (5.4 mmol/L), with an HDL-C of 23 mg/dL (0.6 mmol/L), what would be his calculated LDL-C value?

Assume that you recently graduated and you just landed a job as a financial planner with the Cleveland Clinic. Your first assignment is to invest $100,000. Because the funds are to be invested at the end of one year, you have been instructed to plan for a one-year holding period. Further, your boss has restricted you to the following investment alternatives, shown with their probabilities and associated outcomes. State of Economy Probability T-Bills Alta Inds. Repo Men American Foam Market Port. Recession 0.1 8.00% -22.0% 28.0% 10.0% -13.0% Below Average 0.2 8.00% -2.0% 14.7% -10.0% 1.0% Average 0.4 8.00% 20.0% 0.0% 7.0% 15.0% Above Average 0.2 8.00% 35.0% -10.0% 45.0% 29.0% Boom 0.1 8.00% 50.0% -20.0% 30.0% 43.0% Barney Smith Investment Advisors recently issued estimates for the state of the economy and the rate of return on each state of the economy. Alta Industries, Inc. is an electronics firm; Repo Men Inc. collects past due debts; and American Foam manufactures mattresses and various other foam products. Barney Smith also maintains an "index fund" which owns a market-weighted fraction of all publicly traded stocks; you can invest in that fund and thus obtain average stock market results. Given the situation as described, answer the following questions. a. Calculate the expected rate of return on each alternative. b. Calculate the standard deviation of returns on each alternative. c. Calculate the coefficient of variation on each alternative. d. Calculate the beta on each alternative. e. Do the SD, CV, and beta produce the same risk ranking? Why or why not? f. Suppose you create a two-stock portfolio by investing $50,000 in Alta Industries and $50,000 in Repo Men. Calculate the expected return, standard deviation, coefficient of variation, and beta for this portfolio. How does the risk of this two-stock portfolio compare with the risk of the individual stocks if they were held in isolation?

Assume that you recently graduated and you just landed a job as a financial planner with the Cleveland Clinic. Your first assignment is to invest $100,000. Because the funds are to be invested at the end of one year, you have been instructed to plan for a one-year holding period. Further, your boss has restricted you to the following investment alternatives, shown with their probabilities and associated outcomes.   

Barney Smith Investment Advisors recently issued estimates for the state of the economy and the rate of return on each state of the economy. Alta Industries, Inc. is an electronics firm; Repo Men Inc. collects past due debts; and American Foam manufactures mattresses and various other foam products. Barney Smith also maintains an "index fund" which owns a market-weighted fraction of all publicly traded stocks; you can invest in that fund and thus obtain average stock market results. Given the situation as described, answer the following question using Excel (PLEASE SHOW WORK USING EXCEL FORMULAS : I NEED TO KNOW WHICH FORMULA AND WHICH DATA TO USE IN THE FORMULA) (CALCULATOR FORMAT NOT ACCEPTED).

f. Suppose you create a two-stock portfolio by investing $50,000 in Alta Industries and $50,000 in Repo Men. Calculate the expected return, standard deviation, coefficient of variation, and beta for this portfolio. How does the risk of this two-stock portfolio compare with the risk of the individual stocks if they were held in isolation?

Q1. A total of 1,176,453 deaths (all causes in the whole population) were reported in country X in 2003. The mid-year population in 2003 was estimated to be 198,812,000. HIV related deaths and mid-year population by age-group are given below.

(a) Calculate the crude death rate (from all causes) in country X in 2003. (2pts)

(b) Calculate the crude HIV-related death rate in country X in 2003 in the whole population. (2pts)

(c) Calculate the age specific HIV-related death among 5-14year-olds and among 35-44year-olds. (1 + 1pt)

HIV-related deaths and mid-year population by age group in Country Y in 2003 are given below

(d) Calculate the age-specific HIV-related death rates for country Y in 2003, and complete the above table.(4pts)

(e) Can you conclude that a person living in country X has a risk of dying from HIV that is 1.2 times as high as a person living in country Y? Give a reason for your answer (2pts)

Problem 7-17 Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, LO7-4, LO7-5]

Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these two product lines appear below:

The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:

Required:

1. Compute the product margins for the Xtreme and the Pathfinder products under the company’s traditional costing system.

2. The company is considering replacing its traditional costing system with an activity-based costing system that would assign its manufacturing overhead to the following four activity cost pools (the Other cost pool includes organization-sustaining costs and idle capacity costs):

Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system.

3. Prepare a quantitative comparison of the traditional and activity-based cost assignments.

Burlington Mills produces denim cloth that it sells to jeans manufacturers. It is negotiating a new contract to provide cloth on a weekly basis to BJ Jeans. The demand for cloth from BJ Jeans is expected to vary each week according the following discrete probability distribution:

Demand (yd)
0 0.05

100 0.15 200 0.40 300 0.30 400 0.10

Burlington’s plant capacity available for this new job will vary each week because of other commitments and occasional breakdowns. Burlington estimates that available capacity will vary from 100 to 500 yards and follow a Uniform probability distribution (see note below).

Simulate the performance of the Burlington plant for 20 weeks. You may manually write your results provided your work is clear, neat, and easy to read. Attach your simulation to the Managerial Report.

Using your simulation results, determine the following:

1. Average weekly demand for cloth from BJ Jeans.

2. Average weekly available capacity for this contract at the Burlington plant.

3. Number of weeks that demand exceeds available plant capacity. Based on this result, also

   calculate the probability that demand will exceed available capacity.

Probability

Page 2 of 3

NOTE:

A Uniform probability distribution is one for which any value in a number interval is equally likely. In the Burlington example, then, available capacity will vary from 100 to 500 yards, with any value in this interval as probable as any other.

Since the calculator’s rand function returns a random real number from a Uniform distribution between 0.0 and 1.0, we can use it to model any Uniform distribution:

Low Value + rand*(High Value – Low Value)

For example, the weekly available capacity for the BJ Jeans contract varies uniformly from 100 to 500 yards. If in the simulation of some week, the rand function generates a value of 0.3486, then for that week the randomly selected available capacity will be:

100 + 0.3486*(500 – 100) = 239.44 yards

*Calculate the heat capacity of the calorimeter

*Calculate the enthalpy of the neutralization reaction in kJ/mol

*calculate the enthalphy of dissolution of Ca in acid in kJ/mol

* calculate the enthalphy of dissolution of Ca in water in kJ/mol

As a dialysis patient, Michelle has a 4-h dialysis treatment three times a week. When she arrives at the dialysis clinic, her weight, temperature, and blood pressure are taken and blood tests are done to determine the level of electrolytes and urea in her blood. In the dialysis center, tubes to the dialyzer are connected to the catheter she has had implanted. Blood is then pumped out of her body, through the dialyzer where it is filtered, and returned to her body. As Michelle's blood flows through the dialyzer, electrolytes from the dialysate move into her blood, and waste products in her blood move into the dialysate, which is continually renewed. To achieve normal serum electrolyte levels, dialysate fluid contains sodium, chloride, and magnesium levels that are equal to serum concentrations. These electrolytes are removed from the blood only if their concentrations are higher than normal. Typically, in dialysis patients, the potassium ion level is higher than normal. Therefore, initial dialysis may start with a low concentration of potassium ion in the dialysate. During dialysis, excess fluid is removed by osmosis. A 4-h dialysis session requires at least 120 L of dialysis fluid. During dialysis, the electrolytes in the dialysate are adjusted until the electrolytes have the same levels as normal serum. Initially the dialysate solution prepared for Michelle's pre-dialysis blood tests shows that the electrolyte levels in her blood are as follows:

HCO3− 24 mEq/L, K+ 6.0 mEq/L, Na+148 mEq/L, Ca2+ 3.0 mEq/L, Mg2+ 1.0 mEq/L, Cl− 111.0 mEq/L.

A dialysis solution is prepared for Michelle that contains the following:

HCO3−  35.0 mEq/L , K+  3.0 mEq/L , Na+  120.0 mEq/L , Ca2+  5.5 mEq/L , Mg2+  3.0 mEq/L , Cl−  96.5, glucose 5.0%(m/v).

Question: What is the osmolarity of the dialysate fluid?

Express your answer using two decimal places.

As a dialysis patient, Michelle has a 4-h dialysis treatment three times a week. When she arrives at the dialysis clinic, her weight, temperature, and blood pressure are taken and blood tests are done to determine the level of electrolytes and urea in her blood. In the dialysis center, tubes to the dialyzer are connected to the catheter she has had implanted. Blood is then pumped out of her body, through the dialyzer where it is filtered, and returned to her body. As Michelle's blood flows through the dialyzer, electrolytes from the dialysate move into her blood, and waste products in her blood move into the dialysate, which is continually renewed. To achieve normal serum electrolyte levels, dialysate fluid contains sodium, chloride, and magnesium levels that are equal to serum concentrations. These electrolytes are removed from the blood only if their concentrations are higher than normal. Typically, in dialysis patients, the potassium ion level is higher than normal. Therefore, initial dialysis may start with a low concentration of potassium ion in the dialysate. During dialysis, excess fluid is removed by osmosis. A 4-h dialysis session requires at least 120 L of dialysis fluid. During dialysis, the electrolytes in the dialysate are adjusted until the electrolytes have the same levels as normal serum. Initially the dialysate solution prepared for Michelle's pre-dialysis blood tests shows that the electrolyte levels in her blood are as follows:

HCO3− 24 mEq/L, K+ 6.0 mEq/L, Na+ 148 mEq/L, Ca2+ 3.0 mEq/L, Mg2+ 1.0 mEq/L, Cl− 111.0 mEq/L.

A dialysis solution is prepared for Michelle that contains the following:

HCO3− 30.0 mEq/L , K+ 2.0 mEq/L , Na+ 120.0 mEq/L , Ca2+ 5.0 mEq/L , Mg2+ 3.5 mEq/L , Cl− 100.5, glucose 5.0% (m/v).

What is the osmolarity of the dialysate fluid?
Express your answer using two decimal places.