1.

Which of the following statements is not true?

	a.	Exercising an option involves buying or selling some asset.
	b.	The option price is the price paid to acquire the option.
	c.	An option is the right to buy or sell an underlying asset at the strike price.
	d.	After the expiration date the option becomes valuable.

2.

Which of the following examples best represents a passive dividend policy?

	a.	The firm sets a policy such that the proportion of dividends paid from net income remains constant.
	b.	The firm pays dividends with what remains of net income after taking acceptable investment projects.
	c.	The firm sets a policy such that the quantity (dollar amount per share) of dividends paid from net income remains constant.
	d.	All of the above are examples of various types of passive dividend policies.

3.

Suppose a company pays out fully franked dividends of $140 each to investors with marginal tax rates 45%. The statutory company tax rate is 30%. How much tax will each investor pay on his/her franked dividend?

	a.	$30
	b.	-$30
	c.	$60
	d.	$90

4.

Apple Computer initiated a cash dividend and stock split in 1987 to:

	a.	signal the stock market about their potential growth and positive NPV prospects.
	b.	confirm the large gains in sales.
	c.	satisfy a market hungry for cash rewards.
	d.	a and b.

5.

Suppose an individual subject to a 30 per cent marginal rate of income tax has 2,500 shares in a company that is paying a partially franked dividend of 40 cents per share, with a franking ratio of 0.70 (i.e. 70%). The individual is a resident for taxation purposes. If the company tax rate is 30 per cent, the tax credit can the individual claim due to the partially franked dividends is:

	a.	$210
	b.	$1000
	c.	$390
	d.	$300

6.

A capital loss occurs when:

	a.	the selling price is less than the purchase price.
	b.	the purchase price is less than the selling price.
	c.	there is no income component of return.
	d.	there is no dividend paid.

7.

The buyer of a call option has the choice to exercise, but the writer of the call option has:

	a.	the obligation to call the shares in.
	b.	the obligation to deliver the shares at exercise.
	c.	the choice to offset with a put option.
	d.	the choice to deliver shares or take a cash payoff.

8.

Suppose a stock exists with a price of $17, and a put option on the stock exists with an exercise price of $32. What is the approximate minimum value of the put option?

	a.	$15.
	b.	$17.
	c.	$32.
	d.	$ 0.

9.

The merger of Westpac Bank and St George bank is an example of ________merger.

	a.	Congeneric
	b.	Horizontal
	c.	Conglomerate
	d.	Vertical

10

Mr. Martin buys a put option to sell 100 shares. The strike price=$70; Current stock price=$65, price of the put option to sell one share=$7. At the time of the expiration of the put option, the share price is $72. What is the total gain or loss of Mr. Martin?

	a.	Gain $7
	b.	Gain $1300
	c.	Loss $700
	d.	Loss $7

You have been assigned to a development team that is building software that will be used to control the operations of a bicycle rental store. A rental store has a limited number of vehicles that can be managed. A bicycle rental store must maintain information about how many vehicles are available for rental. The bicycle rental store must provide publicly available methods to allow vehicles to be added and removed from it. The rental store should also provide publicly available methods that reports its capacity. An attempt to add or remove the vehicle other than it’s capacity should print the message letting user know that he/she can’t add or delete the vehicle (Hint: use “if” condition to check the number of vehicles. They shouldn’t be more that 5/5 each to add and less than 1 to delete). At the moment there are two distinct types of vehicles: bicycle and quadricycle (four-wheel bicycle). Every vehicle has a company code, a fun name, number of wheels and a rental price. The bicycle has two wheels whereas quadricycle has four. Define the Java classes that are required to implement the functionality that is described above. Be sure to use object-oriented principles in your Java code. Hints • Vehicle class, Bicycle class, Quadricycle class, RentalStore class. • Bicycle class and Quadricycle class inherits extends from Vehicle class • RentalStore class will have methods to show the total number of vehicles, add/delete Bicycle and add/delete Quadricycle • Rental class should have ArrayList • In general every class should have attributes, constructor and it’s methods. • Besides RentalStore class, all other classes should have toString() method . • Create TestClass that have Main() method. Bicycles: company code 0001, a fun name ( your choice), number of wheels : 2 and a rental price 150 company code 0002, a fun name ( your choice), number of wheels : 2 and a rental price 110 company code 0003, a fun name ( your choice), number of wheels : 2 and a rental price 50 company code 0004, a fun name ( your choice), number of wheels : 2 and a rental price 250 company code 0005, a fun name ( your choice), number of wheels : 2 and a rental price 90 quadricycle : company code 0011, a fun name ( your choice), number of wheels : 4 and a rental price 250 company code 0012, a fun name ( your choice), number of wheels : 4 and a rental price 110 company code 0013, a fun name ( your choice), number of wheels : 4 and a rental price 210 company code 0014, a fun name ( your choice), number of wheels : 4 and a rental price 210 company code 0015, a fun name ( your choice), number of wheels : 4 and a rental price 190 For this scenario, we will have 5 bicycles and 5 quadricycles (total of 10 vehicles). Add all those vehicles to an ArrayList. Find bicycles with price less than $100 and delete all of them. Find quadricycles with price less than $200 and delete all of them. At last, show to total number of remaining vehicles with their details.

We wish to study the difference in attitudes between urban residents versus suburban residents in a metropolitan area as these attitudes relate to the proposed construction of a nuclear plant in the area. We obtain a random sample of 80 urban residents and find that 60 of these residents favor the construction of the plant. Independently, we obtain a random sample of 100 suburban residents, finding that 65 of these residents favor construction of the plant. Select the correct expression for the margin of error of the 90% confidence interval for p1 − p2, where p1 denotes the population proportion for urban residents and p2 denotes the population proportion for suburban residents.

a) 1.645 ∙ √ .75 80 + .65 100

b) 1.645 ∙ √ (0.75) 2 80 + (0.65) 2 100

c) 1.645 ∙ √ (.75)(.25) 80 + (.65)(.35) 100

d) 1.960 ∙ √ .75 80 + .65 100

e) 1.960 ∙ √ (0.75) 2 80 + (0.65) 2 100

f) 1.960 ∙ √ (.75)(.25) 80 + (.65)(.35) 100

Gross profit $ and gross profit % for Walgreens

Gross profit for 2018 = Revenue – Cost of Goods Sold = 131,537 – 100,745 = $30,792

Gross profit % for 2018 = Gross profit / total sales * 100 = $30,792 / $131,537 *100 = 23.41%

Gross profit for 2017 = 118,214 – 89,052 = $29,162

Gross profit % for 2017 = $29,162 / $118,214 *100 = 24,67%

Gross profit for 2016 = 117,351 – 87,477 = $29,874

Gross profit % for 2016 = $29,874 / 117,351 *100 = 25,46%

Gross profit $ and gross profit % for CVS

Gross profit for 2018 = 194,579 – 156,447 = $33,132

Gross profit % for 2018 = $33,132 / $194,579 *100 = 17.03%

Gross profit for 2017 =184,786 – 153,448 = $31,338

Gross profit % for 2017 = $31,338 / $184,786 *100 = 16.96%

Gross profit for 2016 = 177,546 – 146,533 = $31,013

Gross profit % for 2016 = $31,013 / $177,546 *100 = 17,47%

What do the results of this calculation mean in the context of Walgreens? How about CVS? Compare the two - why are they different (be as specific as possible).

Task #1 Writing a Copy Constructor

1.Copy the files Address.java(Code Listing 8.1), Person.java(Code Listing 8.2),Money.java(Code Listing 8.3), MoneyDemo.java(Code Listing 8.4), andCreditCardDemo.java(Code Listing 8.5) from the Student CD or as directed by your instructor. Address.java, Person.java, MoneyDemo.java, and CreditCardDemo.java are complete and will not need to be modified. We will start by modifying Money.java.

2.Overload the constructor. The constructor that you will write will be a copy constructor. It should use the parameter Money object to make a duplicate Moneyobject, by copying the value of each instance variable from the parameter object to the instance variable of the new object.

Task #2 Writing the equals and toString methods

1.Write and document an equals method. The method compares the instance variables of the calling object with instance variables of the parameter object for equality and returns true if the dollars and the cents of the calling object are the same as the dollars and the cents of the parameter object. Otherwise, it returns false.

2.Write and document a toString method. This method will return a String that looks like currency, including the dollar sign. Remember that if you have less than 10 cents, you will need to put a 0 before printing the cents so that it appears correctly with 2 decimal places.

3.Compile, debug, and test by running the MoneyDemo program. You should get the following output:

The current amount is $500.00

Adding $10.02 gives $510.02

Subtracting $10.88 gives $499.14

$10.02 equals $10.02

$10.88 does not equal $10.02

Task #3 Passing and Returning Objects

1.Create theCreditCardclass according to the UML diagram. It should have data fields that include an owner of type Person, a balance of type Money, and a creditLimit of type Money.

2.It should have a constructor that has two parameters, a reference to a Person object to initialize the owner and a reference to a Money object to initialize the creditLimit. The balance can be initialized to a Money object with a value of zero. Remember you are passing in objects (passed by reference), so you are passing the memory address of an object. If you want your CreditCard to have its own creditLimit and balance, you should create a new object of each using the copy constructor in the Moneyclass

3. It should have accessor methods to get the balance and the creditLimit. Since these are Money objects (passed by reference), we don’t want to create a security issue by passing out addresses to components in our CreditCard class, so we must return a new object with the same values. Again, use the copy constructor to create a new object of type Money that can be returned.

4. It should have an accessor method to get the information about the owner, but in the form of a String that can be printed out. This can be done by calling the toString method for the owner (an instance of the Person class).

5. It should have a method that will charge to the CreditCard by adding the amount passed in the parameter to the balance, but only if it will not exceed the creditLimit. If the creditLimit will be exceeded, the amount should not be added, and an error message can be printed to the console.

6. It should have a method that will make a payment on the CreditCard by subtracting the amount passed in the parameter from the balance.

7. Compile, debug, and test it out completely by running the CreditCardDemo program.

8. You should get the output:

Diane Christie, 237J Harvey Hall, Menomonie, WI 54751

Balance: $0.00

Credit Limit: $1000.00

Attempting to charge $200.00

Charge: $200.00 Balance: $200.00

Attempting to charge $10.02

Charge: $10.02 Balance: $210.02

Attempting to pay $25.00

Payment: $25.00 Balance: $185.02

Attempting to charge $990.00

Exceeds credit limit

Balance: $185.02

Code Listing 8.1 (Address.java)

/** This class defines an address using a street,

city, state, and zipcode. */

public class Address

{

// The street number and name

private String street;

// The city in which the address is located

private String city;

// The state in which the address is located

private String state;

// The zip code associated with the city and street

private String zip;

/**

Constructor

@param road Describes the street number and name.

@param town Describes the city.

@param st Describes the state.

@param zipCode Describes the zip code.

*/

public Address(String road, String town, String st, String zipCode)

{

street = road;

city = town;

state = st;

zip = zipCode;

}

/**

The toString method

@return Information about the address.

*/

public String toString()

{

return (street + ", " + city + ", " + state + " " + zip); } }

Code Listing 8.2 (Person.java)

/**

This class defines a person by name and address.

*/ public class Person

{

// The person's last name private String lastName;

// The person's first name private String firstName;

// The person's address private Address home;

/** Constructor

@param last The person's last name.

@param first The person's first name.

@param residence The person's address.

*/

public Person(String last, String first, Address residence)

{ lastName = last;

firstName = first;

home = residence; }

/**

The toString method @return Information about the person.

*/ public String toString()

{

return(firstName + " " + lastName + ", " + home.toString()); } }

Code Listing 8.3 (Money.java)

/** This class represents nonnegative amounts of money. */

public class Money

{

// The number of dollars private long dollars;

// The number of cents private long cents;

/** Constructor

@param amount The amount in decimal format. */

public Money(double amount)

{

if (amount < 0)

{

System.out.println("Error: Negative amounts " + "of money are not allowed.");

System.exit(0);

}

else { long allCents = Math.round(amount * 100); dollars = allCents / 100; cents = allCents % 100; } }

// ADD LINES FOR TASK #1 HERE

// Document and write a copy constructor

/**

The add method @param otherAmount The amount of money to add. @return The sum of the calling Money object and the parameter Money object. */

public Money add(Money otherAmount)

{ Money sum = new Money(0);

sum.cents = this.cents + otherAmount.cents;

long carryDollars = sum.cents / 100;

sum.cents = sum.cents % 100;

sum.dollars = this.dollars + otherAmount.dollars + carryDollars; return sum; }

/** The subtract method @param amount The amount of money to subtract. @return The difference between the calling Money object and the parameter Money object. */

public Money subtract (Money amount)

{ Money difference = new Money(0);

if (this.cents < amount.cents)

{

this.dollars = this.dollars - 1;

this.cents = this.cents + 100;

}

difference.dollars = this.dollars - amount.dollars;

difference.cents = this.cents - amount.cents;

return difference; }

/** The compareTo method

@param amount The amount of money to compare against.

@return -1 if the dollars and the cents of the calling object are less than the dollars and the cents of the parameter object. 0 if the dollars and the cents of the calling object are equal to the dollars and cents of the parameter object. 1 if the dollars and the cents of the calling object are more than the dollars and the cents of the parameter object. */

public int compareTo(Money amount)

{ int value;

if(this.dollars < amount.dollars) value = -1;

else if (this.dollars > amount.dollars) value = 1;

else if (this.cents < amount.cents) value = -1;

else if (this.cents > amount.cents) value = 1;

else value = 0; return value; }

// ADD LINES FOR TASK #2 HERE

// Document and write an equals method

// Document and write a toString method }

Code Listing 8.4 (MoneyDemo.java)

/** This program demonstrates the Money class. */

public class MoneyDemo

{

public static void main(String[] args)

{

// Named constants

final int BEGINNING = 500; // Beginning balance

final Money FIRST_AMOUNT = new Money(10.02);

final Money SECOND_AMOUNT = new Money(10.02);

final Money THIRD_AMOUNT = new Money(10.88);

// Create an instance of the Money class with

// the beginning balance.

Money balance = new Money(BEGINNING);

// Display the current balance. System.out.println("The current amount is " + balance.toString());

// Add the second amount to the balance

// and display the results.

balance = balance.add(SECOND_AMOUNT); System.out.println("Adding " + SECOND_AMOUNT + " gives " + balance.toString());

// Subtract the third amount from the balance

// and display the results.

balance = balance.subtract(THIRD_AMOUNT);

System.out.println("Subtracting " + THIRD_AMOUNT + " gives " + balance.toString());

// Determine if the second amount equals

// the first amount and store the result. boolean equal = SECOND_AMOUNT.equals(FIRST_AMOUNT);

// Display the result.

if(equal)

{

// The first and second amounts are equal.

System.out.println(SECOND_AMOUNT + " equals " + FIRST_AMOUNT);

}

else

{

// The first and second amounts are not equal. System.out.println(SECOND_AMOUNT + " does not equal " + FIRST_AMOUNT); }

// Determine if the third amount equals

// the first amount and store the result.

equal = THIRD_AMOUNT.equals(FIRST_AMOUNT);

// Display the result.

if(equal)

{

// The third and first amounts are equal.

System.out.println(THIRD_AMOUNT + " equals " + FIRST_AMOUNT);

}

else

{

// The third and first amounts are not equal.

System.out.println(THIRD_AMOUNT + " does not equal " + FIRST_AMOUNT); } } }

Code Listing 8.5 (CreditCardDemo.java)

/** This program demonstrates the CreditCard class. */

public class CreditCardDemo

{

public static void main(String[] args) {

// Named constants final Money CREDIT_LIMIT = new Money(1000);

final Money FIRST_AMOUNT = new Money(200);

final Money SECOND_AMOUNT = new Money(10.02);

final Money THIRD_AMOUNT = new Money(25);

final Money FOURTH_AMOUNT = new Money(990);

// Create an instance of the Person class. Person owner = new Person("Christie", "Diane", new Address("237J Harvey Hall", "Menomonie", "WI", "54751"));

// Create an instance of the CreditCard class. CreditCard visa = new CreditCard(owner, CREDIT_LIMIT);

// Display the credit card information.

System.out.println(visa.getPersonals()); System.out.println("Balance: " + visa.getBalance()); System.out.println("Credit Limit: " + visa.getCreditLimit()); System.out.println(); // To print a new line

// Attempt to charge the first amount and

// display the results.

System.out.println("Attempting to charge " + FIRST_AMOUNT);

visa.charge(FIRST_AMOUNT);

System.out.println("Balance: " + visa.getBalance());

System.out.println();

// To print a new line

// Attempt to charge the second amount and

// display the results.

System.out.println("Attempting to charge " + SECOND_AMOUNT);

visa.charge(SECOND_AMOUNT);

System.out.println("Balance: " + visa.getBalance());

System.out.println(); // To print a new line

// Attempt to pay using the third amount and

// display the results.

System.out.println("Attempting to pay " + THIRD_AMOUNT);

visa.payment(THIRD_AMOUNT);

System.out.println("Balance: " + visa.getBalance());

System.out.println();

// To print a new line

// Attempt to charge using the fourth amount and

// display the results.

System.out.println("Attempting to charge " + FOURTH_AMOUNT);

visa.charge(FOURTH_AMOUNT);

System.out.println("Balance: " + visa.getBalance());

} }

Sketch the linearized Bode plots of system function given below. Ensure to properly label the graph. H(s) = 10^9 (s + 100)(s + 1000) / (s^2 + 15000s + 100 × 10^6)(s + 100 × 10^3)

Eve borrows 10,000. The loan is being repaid with the following sequence of monthly payments: 100, 150, 100, 150, 100, 150, etc. The annual nominal interest rate is 7.56% payable monthly.

Calculate the amount of principal repaid in the 13^th payment.

1. Which government activity is not an example of fiscal policy( TAXATION & SPENDING)?

a) Collecting unemployment insurance taxes

b) Collecting gasoline taxes

c) Providing solar energy subsidies

d) Buying missiles from defense contractors

e) Regulating natural monopolies

2. Confidence in Keynesian economics:

            a) Diminished in the 1960’s as inflation recurred.

            b) Diminished in the 1960’s as inflation occurred simultaneously with two recessions.

            c) Diminished in the 1960’s as unemployment recurred.

            d) Diminished in the 1970’s with “stagflation”

            e) Flourished through the 1980’s.

3. A change in income will
            a) Affect demand and supply the same.

            b) Affect quantity supplied through the income effect shift supply curve.

            c) Shift the demand curve.

            d) Have no effect since everything is held constant along a demand curve.

            e) Have a different effect on demand depending on equilibrium price.

4. The division of labor refers to:

            a) Having each worker or firm specialize in a separate task.

            b) Separating workers by race.

            c) Letting everyone share in a specific task.

            d) Letting each worker make a separate product from start to finish.

            e) Separating management from workers.

5. A price ceiling imposed by the government result in an:

            a) Excess demand at equilibrium price.

            b) Excess demand at the price ceiling.

            c) Excess supply at the price ceiling.

            d) Excess supply at equilibrium price.

            e) Excess demand at a price above the equilibrium.

6. The circular flow of the economy is primarily used to trace the flow of:

            a) Money through the economy.

            b) Consumer spending through the economy.

            c) Goods through the economy.

            d) Resources, production, and money through the economy.

            e) Resources through the production process.

7. If the price level is above the equilibrium level:

            a) The resulting excess demand will force the price level down.

            b) The resulting excess demand will force the price level up.

            c) The resulting excess supply will force the price level up.

            d) The resulting excess supply will force the price level down.

            e) The resulting unemployment will force the price level up.

8. A “laissez-faire” approach to the macroeconomy before the Great Depression influences our government to:

            a) See business downturns as a “serious malady” in a “healthy” system, and therefore take only short-term deficit spending measures to help recovery.

            b) See business downturns as a “serious malady” to an otherwise “healthy system,” and therefore wait for recovery to occur naturally.

            c) See business downturns as a “serious malady” to an otherwise “healthy system,” and therefore work to redesign the system to avoid such failure in the future.

            d) See business downturns as a failure of the type of system Adam Smith envisaged, and thus move toward a modern, more managed economy.

            e) See business downturns as a failure of the current system to be the type that Adam Smith envisaged, and thus move toward less government interference in the macro economy

9. Keynes believed that the Great Depression was caused by:

            a) Unemployment.

            b) Deficit spending by the government.

            c) The tax increases put through by President Herbert Hoover.

            d) The policies of “demand-style” economies.

            e) A fall in aggregate demand.

10. Keynes believed that the best method for ending the Great Depression would be to:

            a) Increase the money supply so that individuals would have more to spend.

            b) Cut government spending and increase taxes to reduce.

            c) Increase government spending and cut taxes so that consumers would spend more.

            d) Cut both government spending and taxes so that government would not be such a large     part of the economy.

            e) Increase both government spending and taxes to increase the role government played     in the economy.

11. Keynes was:

            a) In favor of a federal budget deficit to cure an inflation.

            b) Opposed to a federal budget surplus to cure an inflation.

            c) In favor of a federal budget deficit to cure a recession.

            d) In favor of a federal budget deficit regardless of the state of the economy.

12. Proponents of monetarism:

            a) Feel that fiscal policy of worthless.

            b) View government spending as the most important public policy tool.

            c) View taxation as the most important public policy tool.

            d) Support Keynesian economics.

            e) View the money supply as the most important public policy tool.

13. The word “stagflation” describes a situation in which:

            a) Inflation is stagnated.

            b) Inflation increases with economic growth.

            c) Inflation and unemployment occur at the same time.

            d) Inflation is low enough to grow economic growth.

            e) Inflation is zero.

14. The main difference between economic change before 1970 and after 1970 is that before 1970:

            a) Most macroeconomic instability was caused by simultaneous shifts in aggregate demand and aggregate supply.

            b) Most macroeconomic instability was caused by shifts in aggregate supply.

            c) Most macroeconomic instability was caused by shifts in aggregate demand.

            d) The government assumed no direct responsibility for the level of employment.

            e) The government itself was a much less important player in the macroeconomy.

15. The labor force consists of:

            a) All the people in the economy.

            b) All the people in the economy over 16 years of age.

            c) All the adults in the economy able to work.

            d) All the adults in the economy who hold jobs or are looking for them.

            e) All the adults in the economy qualified to hold a job.

16. Consider an economy with 100 people, 70 of whom hold jobs and 10 of whom are looking. The number of people in the labor force is:

            a) 100

            b) 30

            c) 10

            d) 80

            e) 70

17. Consider an economy with 100 people, 70 of whom hold jobs and 10 of whom are looking. The rate of unemployment is:

            a) 10 percent.

            b) 12.5 percent.

            c) 14.3 percent.

            d) 20 percent.

18. The labor force participation rate for women in the United States has

            a) Stayed the same over the last 30 years      

            b) Increased significantly since the 1950s     

            c) Been influenced by decreasing real wages since 1960     

            d) Trended substantially downward since the 1950s

            e) Increased only very slightly since the 1950s

c- The check-cashing store also makes one-month add-on interest loans at 8 percent discount interest per week. Thus if you borrow $100 for one month (four weeks),the interest will be ($100 × 1.084 ) − 100 = $36.05. Because this is discount interest, your net loan proceeds today will be $63.95. You must then repay the store $100 at the end of the month. To help you out, though, the store lets you pay off this $100 in installments of $25 per week. What is the APR of this loan? What is the EAR? (Round your answers to 2 decimal places. (e.g., 32.16))

Question
We have two investment projects A&amp;B. Both projects cost $250, and we require a 15% return of the two
investments.
Year A B
1 $100 $100
2 $100 $200
3 $100 0
4 $100 0
a) Based on the payback period rule, which project would you pick? Explain.
b) Based on the NPV rule, which project would you pick? Explain.
c) Do a) and b) give you the same conclusion? If not, why? Please elaborate.
d) What other methods can you use to evaluate proposed investments? Please explain.