VAR Calculation

A firm has a portfolio composed of stock A and B with normally distributed returns. Stock A has an annual expected return of 15% and annual volatility of 20%. The firm has a position of $100 million in stock A. Stock B has an annual expected return of 25% and an annual volatility of 30% as well. The firm has a position of $50 million in stock B. The correlation coefficient between the returns of these two stocks is 0.3.

a.       Compute the 5% annual VAR for the portfolio. Interpret the resulting VAR.

b.       What is the 5% daily VAR for the portfolio? Assume 365 days per year.

c.       If the firm sells $10 million of stock A and buys $10 million of stock B, by how much does the 5% annual VAR change?

The safety rules do not allow the concentration of the toxic solution exceeding 0.1 mg to be released in the environment. In a chemical factory, this toxic chemical solution is used in the process. The solution flows at a constant rate of 4 L/min into a safety tank that initially contains 100 L of pure water. The toxic solution inside the tank is kept well stirred and flows out of the tank at a rate of 3 L/min. The concentration of the toxic solution entering the tank is 0.3 mg/L.

a) Determine the mass of the toxic product in the tank after t minutes.

b) Find when the concentration of the toxic solution in the tank will be 0.1 mg/L.

c) Use Range-Kutta method with increment = Time in (question b) / 4 d) Compare your results by finding the error

Betas and risk rankings   Personal Finance Problem   You are considering three stocks A, B, and C — for possible inclusion in your investment portfolio. Stock A has a beta of 1.5, stock B has a beta of 1.2, and stock C has a beta of −0.3.

a. Rank these stocks from the most risky to the least risky.

b.  If you believed that the stock market was getting ready to experience a significant decline, which stock should you add to your portfolio?

c.  If you anticipated a major stock market rally, which stock would you add to your portfolio?

a.  Which stock is the most risky one? (Select the best answer below.) A. Stock Upper AStock A B. Stock Upper BStock B C. Stock Upper C

Forecasting 1. Demand data collected on yearly registrations for a Six Sigma seminar at the Quality College are shown in the following table

a. Estimate (forecast) demand again for years 4-12 with a 3-year weighted moving average in which registrations in the most recent year are given a weight of 0.50, 0.25, and 0.25.

b. Estimate (forecast) demand again for years 1-12 using exponential smoothing with a smoothing constant of 0.3. To being, assume that the forecast for year 1 was 5,000 people.

c. Compute the MAD forecasting error for each forecast. Which forecast is better?

. The “beta” value of Amazon shares is about 1.7. The “beta” value of WalMart shares is about 0.3. According to Standard and Poors, WalMart’s bond rating is AA and Amazon’s rating is AA!.

1. What does the difference in beta values indicate?
2. What does the difference in bond ratings indicate?
3. What is meant by the riskiness of a stock? Can you determine, from the information provided, which of the two stocks is “riskier”?
4. Based on the information provided, do you expect Amazon stock or WalMart stock to produce a higher rate of return for the stockholder, or are the indications ambiguous?
5. Suppose that you had private information indicating that the economy is about to go into recession, information that you believe has not yet been incorporated into stock prices. How could this change your answer to part (d)?

Monthly demand for a hot pizza restaurant is given as follows for 1 year (12 months). Estimate the demand including the next two months (13 and 14) by using Holt's and Exponential Smoothing methods. Compare the methods with MSE, MAD, and MAPE metrics, and discuss the superior method.

Use alpha=0.05 and beta=0.1 for Holt's model and use alpha=0.3 for exponential smoothing model. Hint: Level and trend in Holt's method could be obtained with regression. L0 in exponential smoothing is the average demand for the 12-month period.

1- A mother and newborn baby both need blood transfusions. The father is not currently available for typing and donation. Mother is type O negative and baby is type O positive.

The father of the baby must be Rh
. The mother
safely donate blood to the baby. The father arrives later and after typing his blood its concluded that he can safely donate to his baby - which means that his blood type is
.

2- A mother and newborn baby both need blood transfusions. The father is not currently available for typing and donation. Mother is type O negative and baby is type O positive.

Use Punnett Squares to figure out what the fathers possible genotype(s)? Pick all that apply.

Group of answer choices

OO

AA

BO

AB

BB

AO

3- Why are X-linked recessive genetic disorders more commonly seen in males?

Group of answer choices

For an X-linked disorder to occur, an individual must receive one allele only found on the X chromosome and a second allele found only on the Y chromosome, which females do not have.

Females only have X chromosomes, and genes on the X chromosome are not expressed.

Females must receive two copies of the recessive allele to exhibit the disorder, but males need only one copy.

The alleles of sex-linked genes are carried only on the Y chromosome, which females do not have.

4- A sugar molecule, phosphate group and one of four nitrogenous bases make up this structure which is found in DNA.

Group of answer choices

RNA

nucleotide

base pair

5- What type of macromolecule is DNA?

Group of answer choices

protein

carbohydrate

nucleic acid

lipid

6- What type of RNA specifies the order of amino acids in a protein using a series of three base codons?

Group of answer choices

tRNA

mRNA

rRNA

7- What type of RNA is responsible for bringing the correct amino acid to the ribosome by pairing its’ three base anti-codon with a complementary codon on another RNA molecule?

Group of answer choices

mRNA

tRNA

rRNA

8- The chromosome theory of inheritance states what?

Group of answer choices

all genes are located on chromosomes

all chromosomes are located on genes

all DNA is made of only of genes

9- During transcription what occurs?

Group of answer choices

a strand of RNA is made from a template strand of DNA

a strand of DNA is made from a template strand of RNA

a protein is built
10- During translation what occurs?

Group of answer choices

a protein is built at the ribosome using mRNA

a strand of RNA is made from a template strand of DNA

a protein is built in the nucleus using DNA

Northwood Company manufactures basketballs. The company has a ball that sells for $35. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $21.00 per ball, of which 60% is direct labor cost.
    Last year, the company sold 41,000 of these balls, with the following results:

     Sales (41,000 balls)$1,435,000    Variable expenses 861,000     Contribution margin 574,000    Fixed expenses 420,000     Net operating income$154,000   

Required:1-a.
Compute the CM ratio and the break-even point in balls. (Do not round intermediate calculations.)
  

1-b.
Compute the the degree of operating leverage at last year’s sales level. (Round your answer to 2 decimal places.)
  

2.
Due to an increase in labor rates, the company estimates that variable expenses will increase by $2.80 per ball next year. If this change takes place and the selling price per ball remains constant at $35.00, what will be the new CM ratio and break-even point in balls? (Do not round intermediate calculations.)
  

3.
Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $154,000, as last year? (Do not round intermediate calculations. Round your answer to the nearest whole unit.)
  

4.
Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year, what selling price per ball must it charge next year to cover the increased labor costs? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
  

5.
Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 30%, but it would cause fixed expenses per year to double 76%. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls? (Do not round intermediate calculations.)
  

6.
Refer to the data in (5) above.

a.
If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $154,000, as last year? (Do not round intermediate calculations.)
  

b-1.
Assume the new plant is built and that next year the company manufactures and sells 41,000 balls (the same number as sold last year). Prepare a contribution format income
statement
  

b-2.Compute the degree of operating leverage. (Round your answer to 2 decimal places.)  

Northwood Company manufactures basketballs. The company has a ball that sells for $49. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $34.30 per ball, of which 70% is direct labor cost. Last year, the company sold 58,000 of these balls, with the following results: Sales (58,000 balls) $ 2,842,000 Variable expenses 1,989,400 Contribution margin 852,600 Fixed expenses 705,600 Net operating income $ 147,000 Required: 1-a. Compute last year's CM ratio and the break-even point in balls. (Do not round intermediate calculations.) 1-b. Compute the the degree of operating leverage at last year’s sales level. (Round your answer to 2 decimal places.) 2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $4.90 per ball. If this change takes place and the selling price per ball remains constant at $49.00, what will be next year's CM ratio and the break-even point in balls? (Do not round intermediate calculations.) 3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $147,000, as last year? (Do not round intermediate calculations. Round your answer to the nearest whole unit.) 4. Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs? (Do not round intermediate calculations. Round your answer to 2 decimal places.) 5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 30%, but it would cause fixed expenses per year to increase by 86%. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls? (Do not round intermediate calculations.) 6. Refer to the data in (5) above. a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $147,000, as last year? (Do not round intermediate calculations. Round up your final answer to the nearest whole number.) b-1. Assume the new plant is built and that next year the company manufactures and sells 58,000 balls (the same number as sold last year). Prepare a contribution format income statement (Do not round your intermediate calculations.) b-2. Compute the degree of operating leverage. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

One Question = Please analyze this case, using International Trade methodology (not a short answer please) The Schwinn Bicycle Company illustrates the notion of globalization and how producers react to foreign competitive pressure. Founded in Chicago in 1895, Schwinn grew to produce bicycles that became the standard of the industry. Although the Great Depression drove most bicycle companies out of business, Schwinn survived by producing durable and stylish bikes sold by dealerships that were run by people who understood bicycles and were anxious to promote the brand. Schwinn emphasized continuous innovation that resulted in features such as built-in kickstands, balloon tires, chrome fenders, head and tail lights, and more. By the 1960s, the Schwinn Sting Ray became the bicycle that virtually every child wanted. Celebrities such as Captain Kangaroo and Ronald Reagan pitched ads claiming that “Schwinn bikes are the best.” Although Schwinn dominated the U.S. bicycle industry; the nature of the bicycle market was changing. Cyclists wanted features other than heavy, durable bicycles that had been the mainstay of Schwinn for decades. Competitors emerged, such as Trek, which built mountain bikes, and Mongoose, which produced bikes for BMX racing. Falling tariffs on imported bicycles encouraged Americans to import from companies in Japan, South Korea, Taiwan, and eventually China. These companies supplied Americans with everything ranging from parts to entire bicycles under U.S. brand names, or their own brands. Using production techniques initially developed by Schwinn, foreign companies hired low-wage workers to manufacture competitive bicycles at a fraction of Schwinn’s cost. As foreign competition intensified, Schwinn moved production to a plant in Greenville, Mississippi in 1981. The location was strategic. Like other U.S. manufacturers, Schwinn relocated production to the South in order to hire nonunion workers at lower wages. Schwinn also obtained parts produced by low-wage workers in foreign countries. The Greenville plant suffered from uneven quality and low efficiency, and it produced bicycles no better than the ones imported from Asia. As losses mounted for Schwinn, the firm declared bankruptcy in 1993. Eventually Schwinn was purchased by the Pacific Cycle Company that farmed the production of Schwinn bicycles out to low-wage workers in China. Most Schwinn bicycles today are built in Chinese factories and are sold by Walmart and other discount merchants. Cyclists do pay less for a new Schwinn under Pacific’s ownership. It may not be the industry standard that was the old Schwinn, but it sells at Walmart for approximately $180, about a third of the original price in today’s dollars. Although cyclists may lament that a Schwinn is no longer the bike it used to be, Pacific Cycle officials note that it is not as expensive as in the past either. One Question = Please analyze this case, using International Trade methodology (not a short answer please)