1) Demand pull inflation occurs when the:

• price of necessity goods increases suddenly.

• price level changes in response to changes in the business cycle.

• business cycle becomes sporadic and unpredictable.

• price of a key input increases suddenly.

2) While the __________ is not important, the _________ can have a big effect on economic behavior.

• price level; predictable change in the price level

• predictable change in the price level; price level

• price level; unpredicted change in the price level

• unpredicted change in the price level; price level

3) When real rates of interest are negative, borrowers:

• benefit, because the value of their debt increases.

• suffer, because the value of their debt increases.

• suffer, because the value of their debt declines.

• benefit, because the value of their debt declines.

4) Unexpected high inflation redistributes wealth from:

• those who save to those who borrow.

• banks to those who save.

• those who borrow to those who save.

• those who borrow to banks.

5) When banks hold excess reserves the:

• money multiplier underestimates how much money will be created in the economy.

• money multiplier overestimates how much money will be created in the economy.

• reserve ratio is not fully functioning, and should be raised.

• reserve ratio is not fully functioning, and should be lowered.

XYZ stock price and dividend history are as follows:

An investor buys three shares of XYZ at the beginning of 2010, buys another one shares at the beginning of 2011, sells one share at the beginning of 2012, and sells all three remaining shares at the beginning of 2013.

a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2010, to January 1, 2013. (Negative amounts should be indicated by a minus sign.)

b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.) (Negative value should be indicated by a minus sign. Round your answer to 4 decimal places.)

Rate of return             %

Question 3: Textbook

• Product: Textbook
• Selling price: $60
• Sales in January: 500
• Price elasticity: 5

The information above is provided by a bookstore. The store manager wants to determine if $50 is the profit maximization price for this textbook. He also provides the following information:

• Purchase price from publisher: $40

Question 3.1: Please create a linear demand curve based on the given information.

[Please type the equation of the linear demand curve]

Question 3.2: Use Excel Solver to find out the profit maximizing price of this textbook.

XYZ stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2010 $ 140 $ 4 2011 $ 159 $ 4 2012 $ 132 $ 4 2013 $ 137 $ 4 An investor buys five shares of XYZ at the beginning of 2010, buys another three shares at the beginning of 2011, sells one share at the beginning of 2012, and sells all seven remaining shares at the beginning of 2013. a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Arithmetic mean 2.93 % Geometric mean 2.08 % b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2010, to January 1, 2013. (Negative amounts should be indicated by a minus sign.) Date Cash Flow 1/1/2010 $ -700 1/1/2011 -457 1/1/2012 164 1/1/2013 987 b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.) (Negative value should be indicated by a minus sign. Round your answer to 4 decimal places.) Rate of return %

A treasury bond futures price is 103-24. The price of three deliverable bonds are 110-06, 138-12 and 155-28. Their conversation factors are 1.0067, 1.2598, and 1.4367, respectively which bond is the cheapest to deliver?

Number of Shares Outstanding (000's) 300

Share Price as of 12/31/2017 $11

Share Price as of 12/31/2016 $9

Tax Rate 40%

Total Dividends Paid In 2017 (000's) $ 60

Capital Expenditures in 2017 (000's) $70

Net Income 2016 $171

Net income 2017 $189

Sold old equipment for $20,000 with an original cost of $25,000 and A/D of $10,000

- Find total stakeholder return ( Dividends + SPA) for year ended 2016 and 2017

XYZ stock price and dividend history are as follows:

An investor buys three shares of XYZ at the beginning of 2015, buys another one shares at the beginning of 2016, sells one share at the beginning of 2017, and sells all three remaining shares at the beginning of 2018.

a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2015, to January 1, 2018. (Negative amounts should be indicated by a minus sign.)

b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.) (Negative value should be indicated by a minus sign. Round your answer to 4 decimal places.)

No explanation only Answers(Thums up for all answer)

18.) The Price-Earnings valuation model estimates the price of a share of stock today as the ______.

a. sum of a forward looking P/E multiple and the EPS in the next period

b. product of the firm’s historic P/E multiple and the EPS in the next period

c. product of a forward looking P/E multiple and the EPS in the next period

d. product of a forward looking P/E multiple and the current EPS

19.) Which of the following statements about economic value added (EVA) is NOT true?

a. EVA is a measure of value creation.

b. EVA is a process for attempting to create value.

c. If a firm generates positive EVA then it increases shareholder value.

d. all of the above are true

20.) Which of the following is NOT a factor that would be analyzed by a firm as part of an external SWOT analysis?

a. expected inflation

b. expected growth of firm-wide sales

c. expected changes in GDP

d. political uncertainty

21.) If a firm is projected to increases revenues by 10% AND net income by the same amount, which of the following must be TRUE?

a. there can be no variable costs

b. there can be no fixed costs

c. there can be no taxes

d. the change in expenses must be exactly equal to the change in revenues

22.) Rogue River Retail Inc. has a before-tax cost of debt of 8.00%, a cost of equity of 12.00%, a tax rate of 30.00% and no preferred stock outstanding. If the firm is made up of 50% debt and 50% equity, what is the firm’s after-tax cost of borrowing?

a. 12.00%

b. 11.60%

c. 8.00%

d. 5.60%

23.) Which of the following is likely to lead to an increase in a firm’s cost of debt financing?

a. an increase in expected inflation

b. an increase in the riskiness of assets

c. an increase in the average age of debt financing

d. all of the above

24.) Which of the following equations for the book value plus adjustment method is correct? a. value of equity (VE) = market value of equity - adjustments

b. value of equity (VE) = book value of equity + adjustments

c. value of equity (VE) = book value of equity - adjustments

d. value of equity (VE) = market value of equity + adjustments