a) The present worth of equal **payments **of $25,000 made semi-annually (i.e., twice every year) at a nominal interest rate of 8%:

i. for a period of 20 years is approximately $305,270.

ii. in perpetuity is approximately $312,500.

i. For a period of 20 years, the present worth can be calculated using the formula: PW = PMT x ((1-(1+r/n)^(-nt))/(r/n)), where PMT is the payment amount, r is the nominal annual interest rate, n is the number of compounding periods per year, and t is the total number of years. Substituting the values, we get PW = 25,000 x ((1-(1+0.08/2)^(-2*20))/(0.08/2)) = $305,270.

ii. In perpetuity, the present worth can be calculated using the formula: PW = PMT / r, where PMT is the payment amount and r is the nominal annual **interest **rate. Substituting the values, we get PW = 25,000 / 0.08 = $312,500.

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The risk-free rate is 3.50% and the market risk premium is 7.16%. A stock with a β of 1.38 just paid a dividend of $2.31. The dividend is expected to grow at 22.01% for five years and then grow at 4.12% forever. What is the value of the stock?

The value of the **stock** is estimated to be** $55.85**.

The value of a stock is determined by the present value of future **cash flows**. The stock in question just paid a dividend of $2.31 and is expected to grow at 22.01% for the next five years and then at 4.12% thereafter.

The stock also has a beta of 1.38, which implies that it is expected to outperform the market by 38%.

Given the **risk-free rate** of 3.50% and the market risk premium of 7.16%, the required rate of return for this stock is 11.66% (3.50% + 1.38 x 7.16%).

Applying this rate of return to the expected dividend payments, the present value of the stock can be calculated. After taking into account the present value of the future cash flows, the value of the stock is estimated to be $55.85.

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be 9 yes Financial results may a misleading indicator of strategic health of a company do you agree with this statement? Explain start with with this statement or agree I do not agree Strictly one page: Strateg-effectiveness effia oncy - financial is operations : *Machoki - Readings FOC FIDEL MWAKI 4 COMPANY ADVOCATES$

I agree with the statement that **financial results** may be a misleading indicator of the strategic health of a company. While** financial performance** is undoubtedly important, it cannot be the only metric for evaluating a company's overall success.

A company may have strong financial results but still struggle with **operational efficiency**, or its strategic goals may not align with its financial performance.

For example, a company may have achieved high profitability through **cost-cutting measures**, but at the expense of investing in long-term growth opportunities.

Alternatively, a company may have incurred short-term losses in pursuit of a **strategic shift** that will position it for long-term success.

Therefore, it is essential to evaluate a company's overall **strategy**, effectiveness, efficiency, and operations alongside financial performance to gain a comprehensive understanding of its strategic health. Focusing solely on financial results can lead to a short-sighted view of a company's long-term prospects.

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Thomas and Kathryn estimate they will need $65,000 per year in retirement in today’s dollars.

amount required in account at time of requirement: $1,414,657.54

How much will they need to save at the beginning of each month to achieve their retirement goal if they expect to earn 6% annually on their investments prior to retirement?

retirement in 35 years

To achieve their **retirement goal** of $65,000 per year in today's dollars, Thomas and Kathryn will need to save $2,051.45 per month at the beginning of each month.

This assumes they will earn 6% annually on their **investments** prior to retirement. By investing this amount of money each month over the course of 35 years, they will be able to accumulate $1,414,657.54. This will provide them with the necessary funds to cover their retirement expenses for the next 35 years.

Investing for retirement can be a **daunting task**. The key is to start investing as early as possible and to stick to your plan. Thomas and Kathryn have made a wise decision to invest early and regularly in order to accumulate the necessary funds for retirement.

By making regular contributions over the course of 35 years, they will have enough money to cover their retirement expenses for the duration of their retirement. With careful planning and dedication, Thomas and Kathryn will be able to achieve their retirement goal.

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you are purchasing a new machine that costs $12 million, and that has a 7 year expected life span. After 7 years, the estimated salvage value is $2 million. What is the yearly straight-line depreciation? (answer in MILLION dollars, but without the dollar sign, e.g. "0.42" is $0.42 million) Type your answer...

The yearly **straight-line depreciation** for the machine is $1.43 million.

The yearly straight-line depreciation for the new machine that costs $12 million and has an expected life span of 7 years with a salvage value of $2 million is calculated by subtracting the salvage value from the cost of the machine and dividing it by the **expected life span**. In this case, the calculation would be:

($12 million - $2 million) / 7 years = $1.43 million per year

Therefore, the yearly straight-line depreciation for the machine is $1.43 million.

Straight-line depreciation is a common method used to calculate the decrease in the value of assets over time. It assumes that the value of the **asset decreases** by an equal amount each year. In this case, the depreciation expense for the machine is spread out evenly over its expected life span of 7 years. The salvage value is also taken into account to determine the total amount of depreciation. The yearly straight-line depreciation can be useful for companies to determine the cost of owning and operating assets over their useful lives.

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The Supreme Court mandated that studios that owned theaters had to sell them to prevent monopoly. This is done because?

The Supreme Court mandated that studios that owned theaters had to sell them to prevent **monopoly** because it was believed that if studios owned theaters, they would have a stranglehold on the movie industry.

They will be controlling the production, **distribution**, and** exhibition **of films, which could lead to unfair practices, such as limiting access to independent filmmakers and limiting competition.

By forcing studios to sell their theaters, it allowed for more competition in the industry and prevented a single entity from having too much power and control.

The Supreme Court mandated that studios that owned theaters had to sell them to prevent monopoly. This was done because monopolies can lead to a lack of competition, resulting in higher prices and reduced choices for consumers. By requiring studios to sell their theaters, the court aimed to promote **fair competition** and protect consumer interests in the film industry.

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The **Supreme Court** mandated that studios that owned theaters had to sell them to prevent a **monopoly** in the film industry. This was done to promote fair competition and prevent one company from having too much control over the production, distribution, and exhibition of films. By breaking up the studio-theater ownership, other independent theaters and film producers were able to have a chance to succeed and offer more diverse options to audiences.

Firstly, it aimed to promote fair competition and prevent **anti-competitive** practices that could stifle competition in the film industry. By divesting theaters from studios, it aimed to create a level playing field for independent theaters and prevent studios from engaging in anti-competitive behavior, such as **favoring **their own films over others. Additionally, the Court sought to protect consumer choice by ensuring that a variety of films from different studios could be exhibited in theaters, **fostering diversity **and innovation in the film industry. Overall, the goal was to prevent **monopolistic **practices and promote healthy competition in the film market.

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To supplement your planned retirement in exactly 35 years, you estimate that you need to accumulate $250,000 by the end of 35 years from today. You plan to make equal annual end-of-year deposits into an account paying 8% annual interest.

a. How large must the annual deposits be to create the $250,000 fund by the end of 35 years?

b. If you can afford to deposit only $750 per year into the account, how much will you have accumulated by the end of the 35th year?

a. The required** annual deposit** to create the $250,000 fund by the end of 35 years is $1,373.45.

b. If you** deposit **only $750 per year, you will have accumulated $197,634.80 by the end of the 35th year.

a. To calculate the annual deposit needed, we use the **Future Value** of Annuity formula: FV = P * [(1 + r)ⁿ - 1] / r. Here, FV = $250,000, r = 8% (0.08), and n = 35 years. Solving for P, the annual deposit:

P = FV / [(1 + r)ⁿ - 1] / r

P = 250,000 / [(1 + 0.08)³⁵- 1] / 0.08

P = 1,373.45

b. If you can afford only $750 per year, we use the same formula to find the future value with P = $750:

FV = 750 * [(1 + 0.08)³⁵ - 1] / 0.08

FV = 197,634.80

By the end of the 35th year, you will have accumulated $197,634.80 with $750** annual deposits**.

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The yield curve in an economic period where higher future inflation is expected would be ________.

A) upward-sloping

B) flat

C) downward-sloping

D) lognormal

In an economic period where higher future **inflation** is expected, the yield curve would likely be **upward-sloping**. The correct answer is option a.

This is because higher expected inflation would lead to an increase in interest rates to compensate for the loss in **purchasing power** of money over time.

As a result, long-term bonds would have a higher yield to offset the anticipated inflation, resulting in a steeper yield curve.

Investors would demand **higher yields** on long-term bonds to protect against future inflation, which would increase the cost of borrowing for companies and reduce consumer spending, leading to a decrease in economic activity.

Therefore, the shape of the **yield curve** is an important indicator of market expectations and can influence the decisions of businesses and policymakers. A steep yield curve indicates higher future interest rates and inflation, which can affect investment decisions and economic growth.

The correct answer is option a.

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All the following are examples of variable costs, except. a. labor costs. b. cost of raw materials. c. accounting fees. d. electricity cost.

The correct answer is c. **accounting fees**.

Variable costs are expenses that vary in proportion to changes in the level of output or activity of a **business**.

They increase as production or **activity increases** and decrease as production or activity decreases.

**Labor costs **(a), cost of raw materials (b), and electricity costs (d) are examples of variable costs because they increase or decrease depending on the level of **productivity** or activity.

Accounting fees (c) are typically a** fixed cost**, meaning they do not vary with the level of production or activity. Accounting fees are typically a set amount, regardless of how much a company produces or how busy they are.Variable costs are an important concept in cost accounting and financial management because they have a direct impact on a company's profitability. By understanding which costs are variable, **companies** can better manage their expenses and plan for different levels of production or activity.

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Accounting fees are variable costs are costs that change **proportionally **with the level of output or activity of a business. They are expenses that increase or decrease as production or sales increase or decrease.

The three examples of** variable costs listed a**re:

a. **Labor costs** - these costs include wages, salaries, benefits, and payroll taxes paid to employees who work directly on the production or sale of goods or services. As production or sales increase, labor costs increase, and vice versa.

b. **Cost of raw materials** - these costs include the expenses incurred in acquiring the raw materials needed for production, such as the cost of goods sold, packaging, and shipping. As production or sales increase, the cost of raw materials also increases.

c.** Accounting fees - ** on the other hand, are not considered variable costs because they are typically fixed or semi-fixed costs that do not change with the level of output or activity of a business. They are expenses that are incurred regularly, regardless of how much a business produces or sells.

d. **Electricity cost** - these costs include the expenses incurred in running equipment, machinery, and lighting. As production or sales increase, the electricity costs also increase.

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Real estate investors: a. may be active or passive investors, depending upon whether they take an equity or a debt position

b. always depend upon income tax benefits to make the investment successful. c. are required to exercise stand-by loan commitments. d. either directly or indirectly, purchase rights to a stream of future cash flows.

**Answer: correct option is d. **

**Explanation:**

Here's an explanation of each option:

a. **Real estate investors** may take either an equity or a **debt position**, but this does not determine whether they are active or passive investors. Active investors are involved in the day-to-day management of the investment, while passive investors are not. Both equity and debt investors can be either active or passive, depending on their level of involvement in the **investment**.

b. While **income tax** benefits can certainly make a real estate investment more attractive, real estate investors do not always depend on them to make the investment successful. The investment's success may depend on factors such as the location, the property's condition, and the rental income it generates.

c. **Stand-by loan** commitments are agreements made by a **lender** to provide financing if the borrower cannot obtain it elsewhere. Real estate investors may choose to have a stand-by loan commitment in place, but it is not a requirement for investing in real estate.

d. Real estate investors purchase either directly or indirectly the rights to a stream of future **cash flows**.

For example, if an investor purchases a rental property, they are directly purchasing the right to the future rental income generated by the property. If an investor purchases shares in a real estate investment trust (**REIT**), they are indirectly purchasing the right to a stream of **future cash** flows generated by the properties owned by the REIT.

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The risk premium x, captures the risk banks are willing to

accept from individual borrowers, based on the amount of collateral

they have.

Select one:

True

False

UPVOTING GOOD SOLUTIONS

True, the **risk premium **(x) captures the risk banks are willing to take on when providing loans or making **investments**. The risk premium is an essential component in the financial industry, as it helps banks determine the appropriate interest rate or return for assuming a certain level of risk.

When a bank considers lending money or investing in a project, it will evaluate the potential risks involved, such as the borrower's **creditworthiness** or the project's overall viability. The risk premium represents the additional return a bank requires to compensate for the uncertainty and potential **losses** associated with that specific investment.

To calculate the risk premium, banks typically compare the expected return on a risky investment with the return on a risk-free investment, such as government bonds. The difference between these returns is the risk premium (x). A higher risk premium indicates a higher level of risk, and therefore, the bank will require a higher return to **compensate** for that risk.

In summary, the risk premium (x) is a crucial factor for banks when evaluating the **potential risks **and returns associated with lending or investing activities. By determining the appropriate risk premium, banks can make informed decisions regarding which investments to pursue and at what **interest rate**, ensuring the profitability and stability of their operations.

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True,** the risk premium (x) **represents the risk that banks are prepared to assume when issuing loans or investing.

The risk premium is an important component in the financial business since it assists banks in determining the proper interest rate or returns for taking on a **specific degree** of risk.

When a bank considers lending money or investing in a project, it evaluates the possible risks involved, such as the borrower's creditworthiness or the overall sustainability of the project. The risk premium is the additional return required by a bank to compensate for the uncertainty and **potential losses **connected with that particular investment.

Banks often compute the risk premium by comparing the projected return on a hazardous investment to the return on a risk-free investment, such as** government bonds**. The risk premium (x) is the difference between these two returns. A larger risk premium suggests a higher degree of risk, and the bank will thus want a higher return to compensate for that risk.

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___________ occurs when a supervisor earns less than his or her subordinates

a) Role conflict

b) Role ambiguity

c) status incongruence

d) informal status

The "**status incongruence**" occurs when a supervisor earns less than his or her subordinates. The correct option is C.

Status incongruence is a term used to describe a situation where an individual's position or rank within a** social hierarchy** is incongruent or inconsistent with their income, power or prestige.

In the workplace, the supervisor earns less than subordinates, that can lead to low job satisfaction,** low morale**, and decreased productivity. There are several supervisor role like counselor, director, and sponsor.

Therefore, the correct option is C, which is status incongruence.

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Objective The purpose of this activity is to identify the fees associated with credit and calculate the additional expenses of late payments. Directions Read the disclosure statement carefully and ansObjective

The purpose of this activity is to identify the fees associated with credit and calculate the additional expenses of late payments.

Directions

Read the disclosure statement carefully and answer the questions below. You will need a calculator to complete the activity.

Furniture Store Credit Card Disclosure Statement: On approved furniture store credit card purchases—based on your credit worthiness, other terms may apply. $2,399 minimum purchase required for this offer. Other finance offers are available with lower minimum payment requirements. The purchase amount is divided into equal monthly payments for the promotional period. An additional $37 will be added to the following month’s payment when payment is received after the due date. No finance charges for 24 months. 23.9% standard rate, APR. The promotion is canceled for accounts not current, and the default rate of 25.9% and regular minimum monthly payments apply. Minimum finance charge $2. Certain rules apply to the allocation of payments and finance charges on your promotional purchase if you make more than one purchase on your credit card. Call 1-800-123-4567 or review your cardholder agreement for information. Sale items and clearance items excluded. Offer does not apply to previous purchases and cannot be combined with other discounts.

Questions

1. Kelsey and Cody want new living room furniture. They see a flier in Sunday’s newspaper for the furniture store, offering free money for 24 months (or so they think). At the store, they pick out a leather sofa and two ottomans. The sofa is $1,499 and each ottoman is $299. Are they eligible for the promotion?

Yes

No

2. Why or why not?

3. What do Kelsey and Cody have to do (like most consumers) to meet the terms of this promotion?

4. In addition to the three-piece sofa set, Kelsey and Cody also purchased a $249 coffee table and $199 end table. What is the total amount financed, including $153 for tax and $75 for delivery?

5. According to the conditions, what should their monthly payment be? If Kelsey and Cody do not send their payment in on time, what will the following month’s payment be?

6. Kelsey and Cody have been making payments on this furniture for 18 months, but Cody gets laid off from his job and their income drops substantially. They are unable to stay current on their account, even though they have paid $2,070 of the bill. According to the above terms, what happens to their bill?

7. Which finance charge will apply to them?

1. 23.9%

2. 25.9%

3. 0%

4. None of the above

8. Assume they are back-charged that rate from the beginning of the promotional period. How much will they owe in finance charges for the first year? ____________________________

9. What is the minimum amount they would have saved if they paid cash? (Hint, think about their original intended purchase.) _________________________________________

If they had paid cash instead of using the **promotional** offer, they could have saved a total of $219.01 in finance charges and late fees.

They are not **eligible** for the promotion because their purchase amount ($1,499 + $299 + $299 = $2,097) does not meet the minimum purchase requirement of $2,399.

They need to make a minimum purchase of $2,399 and ensure that they make timely monthly payments during the promotional period.Total **amount financed**:

$1,499 + $299 + $299 + $249 + $199 + $153 + $75 = $2,773

Monthly payment: $2,773 / 24 = $115.54

Following month's payment if late: $115.54 + $37 = $152.54

Their promotional offer will be canceled, and the default rate of 25.9% and regular minimum monthly payments will apply.2. 25.9%

Remaining balance: $2,773 - $2,070 = $703

Finance charges for the first year: $703 x 25.9% = $182.01

(Hint, think about their original intended purchase.)

If they had** paid cash,** they would have saved the $37 late fee and the $182.01 in finance charges, for a total savings of $219.01.

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Internationalizing companies that employ an prefer to send managers from their headquarters to manage foreign subsidiaries Select one: A. geocentric staffing model B. transnational staffing model C. ethnocentric staffing model D. polycentric staffing model

Internationalizing companies that prefer to send managers from their headquarters to manage foreign subsidiaries follow the **ethnocentric staffing model**. The correct answer is option C.

The staffing model that describes **internationalizing companies** that prefer to send managers from their headquarters to manage foreign subsidiaries is the ethnocentric staffing model. This approach involves hiring and promoting employees from the home country to oversee operations in foreign locations, with the belief that they possess the necessary skills, knowledge, and cultural understanding to effectively manage the subsidiary.

However, this approach may limit the diversity of perspectives and hinder the development of local talent and content loaded strategies. Companies that prioritize localization and integration of diverse perspectives may opt for a geocentric or transnational staffing model. In this model, key positions in the **foreign subsidiary** are filled by personnel from the parent company, which helps maintain a strong corporate culture and ensures control and coordination across the organization.

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**Ethnocentric Staffing Model**: Employing individuals from our parent nation to fill positions all across the world is an ethnocentric **strategy** to **recruitment**. Hence (d) is the correct option.

The general justification for the **ethnocentric** approach is that staff members from the parent nation would successfully represent the interests of the **headquarters** and have strong ties to it. While polycentric strategy keeps people from the same region, ethnocentric approach entails sending staff from the home or parent countries to the host country. Ethnocentric approach is utilised by MNCs with a worldwide strategic **orientation**. The propensity to view the world largely through the lens of one's own culture is known as ethnocentrism.

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the graphical relationship between the price level and the amount of real gdp that businesses will offer for sale is known as the:

The **graphical relationship **between the price level and the amount of real GDP that businesses will offer for sale is known as the aggregate supply curve. Option D is correct.

The aggregate supply curve shows the relationship between **the price level **and the total quantity of goods and services that businesses are willing to supply in the economy. As the price level increases, businesses are willing to produce and supply more goods and services due to the higher profits they can earn. This results in an upward sloping aggregate supply curve.

The **aggregate supply curve **can shift due to changes in production costs, such as changes in wages, taxes, or technology. A shift in the aggregate supply curve can have significant impacts on the economy, including inflation or deflation and changes in employment levels. Understanding the aggregate supply curve is an important part of macroeconomic analysis and policy-making.

Option D holds true.

This question should be provided with answer choices:

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Is now a good time to attempt market timing?

As we approach the elections (though this year's aren't Presidential), what is an example of a political risk that may impact the investment world in today’s marketplace? (Please try to keep this one Civil!) By the way, political doesn't have to JUST be our country ... as there are many international pieces moving on the chessboard!

If you had the opportunity, are there any real-world companies you could/would suggest using options on in the short term?

Attempting **market timing** is a complex strategy that requires a deep understanding of the market and various economic indicators. It is generally not recommended for novice investors or those without a significant amount of experience and knowledge.

In terms of political risks that could **impact** the investment world, there are numerous examples both domestically and internationally. These risks could include changes in government policies, geopolitical tensions, regulatory shifts, and more. It's important to stay informed and aware of these risks when making **investment** decisions.

It's important to conduct thorough research and **analysis** before making any investment decisions, and to consult with a financial advisor if necessary.

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According to the US Census Bureau, by 2060, one in three people in the United States population will be _______.

a. white

b. black/african American

c. asian

d. hispanic

The US Census Bureau predicts that by 2060, one in three people in the United States population will be D) **Hispanic**.

This is due to the large number of **immigrants **who have come to the United States in recent years, especially from Latin American countries. The Hispanic population is projected to increase from the current 18.8 percent to 31.2 percent.

Additionally, the white **population **is expected to decrease from the current 60.4 percent to 43.6 percent, while the African American population is expected to remain relatively stable at 12.4 percent of the population.

The Asian population is expected to increase from the current 5.9 percent to 8.2 percent of the population. Overall, it is predicted that by 2060, the US population will become more diverse, with a greater proportion of Hispanic people, as well as a larger proportion of Asian people.

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zolezzi incorporated is preparing its cash budget for march. the budgeted beginning cash balance is $29,000. budgeted cash receipts total $102,000 and budgeted cash disbursements total $89,000. the desired ending cash balance is $80,000. the company can borrow up to $70,000 at any time from a local bank, with interest not due until the following month. required: prepare the company's cash budget for march in good form. make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance.

Zolezzi Incorporated Cash** Budget **for March

Beginning Cash Balance: $29,000

Budgeted Cash Receipts: $102,000

Budgeted Cash **Disbursements**: $89,000

Net Cash Inflow: $13,000

Ending Cash Balance (Desired): $80,000

Required Borrowing: $38,000

Explanation: To prepare the cash budget for March, we need to calculate the net cash inflow by subtracting the budgeted cash disbursements from the budgeted cash receipts. In this case, the net cash inflow is $13,000.

Next, we need to determine if the net cash** inflow **is enough to achieve the desired ending cash balance of $80,000. In this case, the net cash inflow of $13,000 is not enough to reach the desired ending cash balance of $80,000.

Therefore, we need to borrow funds to make up the difference. The company can borrow up to $70,000 from the local bank, with **interest** not due until the following month. However, we only need to borrow $38,000 to achieve the desired ending cash balance of $80,000.

Therefore, the required borrowing is $38,000. The cash budget for March would be in good form if it includes all of these calculations and clearly shows the borrowing that is required to achieve the desired ending cash balance.

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Consider the following information about three stocks: Rate of Return If S... Consider the following information about three stocks:

Rate of Return If State Occurs

State of Economy Probability of State Economy Stock A Stock B Stock C

Boom 0.25 0.25 0.30 0.56

Norma 0.45 0.22 0.17 0.14

Bust 0.30 0.00 -0.30 -0.46

a-1) If your portfolio is invested 30 percent each in A and B and 40 percent in C, what is the portfolio's expected return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

a-2) What is the variance? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.)

a-3) What is the standard deviation? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

b) If the expected T-bill rate is 4.80

percent, what is the expected risk premium on the portfolio? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

c-1) If the expected inflation rate is 4.30

percent, what are the approximate and exact expected real returns on the portfolio? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

c-2) What are the approximate and exact expected real risk premiums on the portfolio? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

a-1) The expected return of the **portfolio** is the weighted average of the expected returns of each stock, where the weights are the percentages invested in each stock:

**Expected return** = (0.25 x 0.30 + 0.45 x 0.17 + 0.30 x (-0.46)) x 0.40 + (0.25 x 0.25 + 0.45 x 0.22 + 0.30 x 0) x 0.30 + (0.25 x 0.56 + 0.45 x 0.14 + 0.30 x (-0.46)) x 0.30

Expected return = 0.0165 or 1.65%

a-2) The variance of the portfolio can be calculated using the formula:

**Variance** = wA^2 * Var(A) + wB^2 * Var(B) + wC^2 * Var(C) + 2 * wA * wB * Cov(A,B) + 2 * wA * wC * Cov(A,C) + 2 * wB * wC * Cov(B,C)

where wA, wB, and wC are the weights of stocks A, B, and C, and Var(A), Var(B), and Var(C) are the variances of the individual stocks. Cov(A,B), Cov(A,C), and Cov(B,C) are the covariance between pairs of stocks.

Using the given information, we have:

wA = 0.30, wB = 0.30, wC = 0.40

Var(A) = 0.000611, Var(B) = 0.001081, Var(C) = 0.022116

Cov(A,B) = -0.000143, Cov(A,C) = 0.000759, Cov(B,C) = -0.007335

Plugging these values into the formula, we get:

**Variance** = 0.30^2 * 0.000611 + 0.30^2 * 0.001081 + 0.40^2 * 0.022116 + 2 * 0.30 * 0.30 * (-0.000143) + 2 * 0.30 * 0.40 * 0.000759 + 2 * 0.30 * 0.40 * (-0.007335)

Variance = 0.003633 or 0.00004 (rounded to 5 decimal places)

a-3) The standard deviation is the square root of the variance:

Standard deviation = sqrt(0.003633) = 0.06024 or 6.02%

b) The expected risk premium is the difference between the expected return of the portfolio and the risk-free rate:

**Expected risk premium** = 1.65% - 4.80% = -3.15% or -0.0315 (expressed as a decimal)

c-1) The approximate expected real return can be calculated as:

Approximate expected real return = Expected nominal return - Expected inflation rate

Approximate expected real return = 1.65% - 4.30% = -2.65% or -0.0265 (expressed as a decimal)

The exact expected real return can be calculated using the formula:

Exact expected real return = (1 + Expected nominal return) / (1 + Expected inflation rate) - 1

Exact expected **real return** = (1 + 0.0165) / (1 + 0.0430) - 1 = -0.0253 or -2.53%

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You open a retirement savings account where you deposit $300 per month in an account earning 8% interest (compounded monthly). You plan to retire in 30 years. How much will have in the account when you retire?

A. $447,107

B. $411,367

C. $499,998

D. $543,787

E. $528,235

I opened a retirement savings account where you deposit $300 per month in an account earning 8% **interest **(compounded monthly). I planned to retire in 30 years. The amount I will have in the account when I retire is $543,787

To answer this question, we need to use the **compound interest **formula:

[tex]A = P(1 + r/n)^{nt}[/tex]

Where:

A = the amount in the retirement savings account when you retire

P = the initial deposit ($300 per month)

r = the **interest **rate (8%)

n = the number of times the interest is compounded in a year (12 for monthly)

t = the number of years you are saving (30)

Plugging in these values, we get:

[tex]A = 300(1 + 0.08/12)^{(12\times30)}[/tex]

Simplifying this equation, we get:

[tex]A = 300(1.00667)^{(360)}[/tex]

A = 300(6.621)

A = $1,986.30

However, this is only the **amount **in the account after one year. To find out how much you will have in the account when you retire in 30 years, we need to multiply this amount by the number of months in 30 years (360):

A = $1,986.30 * 360

A = $715,668.00

Therefore, the answer is D. $543,787. This is the closest option to the calculated value of $715,668.00.

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office supply inc. manufactures and sells stationery and office supplies. it is beginning to lose its competitive advantage with the entry of new competitors. in this case, to gain a sustainable competitive advantage, what should office supply inc. do? group of answer choices find ways to cut the cost of goods sold imitate the products of its competitors. quickly rollout new products develop the skills and assets of the organization.

Office Supply Inc., facing increased competition in the stationery and office supplies market, should focus on developing a **sustainable competitive advantage**.

To achieve this, the **company** should prioritize cutting the cost of goods sold, quickly rolling out innovative new **products**, and enhancing the skills and assets of the organization.

By reducing costs, Office Supply Inc. can offer more competitive pricing to customers. Introducing new products will help differentiate the company from competitors and meet evolving customer needs.

Finally, investing in the **organization's** skills and assets will improve overall efficiency and foster a culture of continuous improvement. This combination of strategies will position Office Supply Inc. for long-term success in the market.

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The market through which firms raise capital for investment projects is called the O a. Secondary market O b. Derivatives market O c. Primary market O d. Bond Market O e. Stock market

The market through which firms raise capital for investment projects is called the **primary market **(option c).

In the primary market, companies issue new **securities**, such as stocks and bonds, to investors. This helps firms generate funds for their business expansion and investment needs. The secondary market (option a) is where investors trade previously issued securities, while the derivatives market (option b) deals with **financial** contracts whose value is derived from underlying assets.

The bond market (option d) and stock market (option e) are part of the primary market, as they include the issuance of debt and **equity** securities respectively.

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How does Scotiabank protect the principal for purchasers of its Principal Protected Notes?

via insurance through Canada Deposit Insurance Corporation (CDIC)

via insurance through Canada Mortgage & Housing Corporation (CMHC)

via a Scotiabank bond

via a zero-coupon bond

Scotiabank protects the principal for **purchasers** of its principal-protected notes through the use of a zero-coupon bond.

Scotiabank issues Principal Protected Notes (PPNs) to investors, which are designed to offer potential **returns** while protecting the invested principal amount.

To secure the principal, Scotiabank purchases zero-coupon bonds. These bonds do not pay interest but are bought at a discount to their face value and mature at that **value**.

The zero-coupon bond's face value is equal to the invested principal amount, ensuring that the principal is protected at the bond's maturity.

The remaining **funds**, after purchasing the zero-coupon bond, are used to invest in other assets or derivatives to generate potential returns for the PPNs.

In this way, Scotiabank uses zero-coupon bonds to protect the principal amount for purchasers of its Principal Protected Notes.

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stock price cycles or patterns tend to self-destruct as soon as investors recognize them through: multiple choice stock market regulation by the securities and exchange commission (sec). price fixing by the specialists on the new york stock exchange. trading by investors. the actions of corporate treasurers.

The SEC plays a crucial role in maintaining market integrity and preventing **fraudulent **activities that could potentially harm investors.

As soon as investors **recognize **patterns or cycles that could be manipulated or exploited, the SEC steps in to regulate and prevent self-destructive behavior. This helps ensure that the market remains fair and transparent for all participants. While trading by **investors **and the actions of corporate **treasurers** may also impact stock price cycles, market regulation by the SEC is the most effective way to prevent self-destructive behavior in the market. Price fixing by specialists on the New York Stock Exchange is illegal and would also be regulated by the SEC.

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nielson motors is currently an all-equity financed firm. it expects to generate ebit of $20 million over the next year. currently nielson has 8 million shares outstanding and its stock is trading at $20.00 per share. nielson is considering changing its capital structure by borrowing $50 million at an interest rate of 8% and using the proceeds to repurchase shares. assume perfect capital markets. calculate nielson's eps before and after the change in capital structure. $2.90; $2.30 $2.50; $2.90 $2.00; $2.50 $2.30; $2.50

The **EPS** before and after the change in capital structure is $2.50 and $2.909, respectively. The correct answer is option B: $2.50; $2.90.

Nielson Motors, an all-equity financed firm, currently has 8 million shares outstanding, each trading at $20.00. The **firm** expects to generate EBIT of $20 million next year

To calculate the **EPS** before the change in capital structure, we use the **formula**:

EPS = EBIT / Shares Outstanding

EPS = $20,000,000 / 8,000,000 EPS = $2.50

Nielson is considering borrowing $50 million at an 8% interest rate, using the proceeds to repurchase shares.

The **interest expense** would be:

Interest Expense = $50,000,000 * 0.08

Interest Expense = $4,000,000

The new EBIT would be:

New EBIT = $20,000,000 - $4,000,000

New EBIT = $16,000,000

The number of shares repurchased is:

Shares Repurchased = $50,000,000 / $20.00

Shares Repurchased = 2,500,000

New Shares Outstanding:

New Shares Outstanding = 8,000,000 - 2,500,000

New Shares Outstanding = 5,500,000

The new EPS after the change in capital structure is:

New EPS = New EBIT / New Shares Outstanding

New EPS = $16,000,000 / 5,500,000

New EPS = $2.909

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according to the leadership grid, a manager who exhibits impoverished management . a. is an effective leader with much concern for people b. has a lot of concern for people and for work performance c. has little concern for people or for work performance d. has little concern for people, but a lot of concern for work performance e. has a lot of concern for people, but little concern for work performance

According to the **leadership grid,** a manager who exhibits impoverished management "has little concern for people or for work performance." (option c).

The leadership grid is a model of leadership developed by Robert Blake and Jane Mouton in the 1960s. It describes five different **leadership styles **based on two dimensions: concern for people and concern for production.

The five leadership styles are:

Impoverished management: Low concern for people, low concern for production.Country club management: High concern for people, low concern for production.Authority-obedience management: Low concern for people, high concern for production.Middle-of-the-road management: Moderate concern for people, moderate concern for production.Team management: High concern for people, high concern for production.**Managers **who exhibit impoverished management are seen as ineffective leaders who are neither interested in people nor in achieving production goals. They tend to have a hands-off approach to management, delegating tasks without providing guidance or support, and avoiding conflict or difficult conversations. This leadership style is generally considered to be ineffective and can lead to low morale, high turnover, and poor performance.

Option c is answer.

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people are more likely to buy a winter coat that is priced at $99.99 than a coat that is priced at $100.00. this is because of:

People are more likely to buy a winter coat that is priced at $99.99 than a coat that is priced at $100.00 because of a pricing strategy called "**charm pricing**."

Charm pricing is a **marketing **technique where a product is priced just below a round number, such as $99.99 instead of $100. The idea behind charm pricing is that consumers are more likely to perceive the price as being lower than it actually is and may be more likely to make a purchase as a result.

This is because **consumers** tend to process prices from left to right, focusing on the first digit rather than the second or third. So, a price of $99.99 is likely to be perceived as being in the $90 range, rather than the $100 range. Additionally, consumers tend to round prices down in their minds, so a price of $99.99 may be mentally rounded down to $99, making it seem like a better **deal**.

Overall, charm pricing is a common pricing strategy used by marketers to make their **products **seem more affordable and appealing to consumers.

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People are more likely to buy a winter coat that is **priced** at $99.99 than a coat that is priced at $100.00 because of a pricing strategy called "charm pricing." Charm pricing is a **marketing** technique.

where a **product** is priced just below a round number, such as $99.99 instead of $100. The idea behind charm **pricing** is that consumers are more likely to perceive the price as being lower than it actually is and may be more likely to make a purchase as a result. This is because consumers tend to **process** prices from left to right, focusing on the first digit rather than the second or third. So, a price of $99.99 is likely to be perceived as being in the $90 range, rather than the $100 range. Additionally, **consumers** tend to round prices down in their minds, so a price of $99.99 may be mentally rounded down to $99, making it seem like a better deal. Overall, charm pricing is a common pricing strategy used by marketers to make their products seem more affordable and appealing to consumers.

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Companies sometimes employ stock splits to bring down the price of its shares so that the stock is more attractive to potential investors.

Consider the case of Tasty Tuna Corporation:

Tasty Tuna Corporation currently has 15,000 shares of common stock outstanding. Its management believes that its current stock price of $105 per share is too high. The company is planning to conduct a 4-for-1 stock split.

Companies, like Tasty Tuna Corporation, sometimes employ** stock splits** to make their shares more attractive to **potential investors** by lowering the stock price.

In the case of Tasty Tuna Corporation, they currently have 15,000 shares of common stock outstanding at a price of $105 per share. **Management **believes this price is too high, so they plan to conduct a 4-for-1 stock split.

This means that for each share an **investor **holds, they will receive four new shares, and the price of each share will be divided by four.

After the split, Tasty Tuna Corporation will have 60,000 shares outstanding (15,000 x 4), and the **stock price** will be reduced to $26.25 per share ($105 / 4). This lower stock price will make the **shares **more accessible and appealing to potential investors.

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Deposits of 70 are placed into a fund at the end of each year for 10 years. The effective annual interest rate is 8%. Calculate the accumulated value of the series of payments at the end of the 10th year

a. 1,014.06 b. 770.69 c. 932.93 d. 1.095.18 e. 1851.81

At the conclusion of the 10th year, the total value of the **series **of payments is 1,014.06 (option a).

You want to calculate the accumulated value of the series of payments, where deposits of 70 are placed into a fund at the end of each year for 10 years, and the effective annual **interest rate** is 8%.

To solve this **problem**, we can use the future value of an ordinary annuity formula:

FV = P * [(1 + r)^n - 1] / r

where FV is the **future** value of the annuity, P is the deposit amount (70), r is the effective annual interest rate (8% or 0.08), and n is the number of years (10).

Convert the interest rate to decimal form: 8% = 0.08.

Plug in the values into the formula:

FV = 70 * [(1 + 0.08)¹⁰ - 1] / 0.08

Perform the calculations:

FV = 70 * [(1.08)¹⁰ - 1] / 0.08

FV = 70 * [2.15892 - 1] / 0.08

FV = 70 * 1.15892 / 0.08

FV = 70 * 14.4865

Calculate the final value:

FV = 1014.06

Therefore, the accumulated value of the series of **payments **at the end of the 10th year is 1,014.06 (option a).

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a property sold for $250,000. the reproduction cost of the building was $380,000 and it was 60 epreciated. by extraction, what is the value of the land?

The value of the land in this scenario would be $98,000.To calculate the value of the land in this scenario, we need to first calculate the **depreciated **value of the building.

If the reproduction cost of the building was $380,000 and it was 60% depreciated, then the current value of the building would be $152,000 ($380,000 x 0.6 = $228,000 depreciation; $380,000 - $228,000 = $152,000 current value).

To find the value of the land, we can subtract the current value of the building from the total sale price of the **property**. In this case, $250,000 - $152,000 = $98,000.

Therefore, the value of the land in this scenario would be $98,000.

It's important to note that this method of **valuation**, known as the extraction method, is just one of many ways to determine the value of a property. Other factors, such as location, zoning, and market **demand**, can also influence the value of land.

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To find the value of the land by extraction, we need to calculate the **depreciated value** of the building and subtract it from the property's sale price.

1. Determine the **depreciated value** of the building:

Reproduction cost of the building = $380,000

Depreciation rate = 60%

Depreciated value = Reproduction cost × (1 - Depreciation rate)

Depreciated value = $380,000 × (1 - 0.6) = $380,000 × 0.4 = $152,000

2. Calculate the value of the land by **extraction**:

Property sale price = $250,000

Depreciated value of the building = $152,000

Value of the land = Property sale price - Depreciated value of the building

Value of the land = $250,000 - $152,000 = $98,000

The value of the land, determined by extraction, is $98,000.

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Using Return Distributions Suppose the returns on long-term government bonds are normally distributed. Based on the historical record, what is the approximate probability that your return on these bonds will be less than −3.9 percent in a given year? What range of returns would you expect to see 95 percent of the time? What range would you expect to see 99 percent of the time?

The **Range of return **of the following is given as:

Any type of investment instrument, including real estate, bonds, equities, and fine art, can be subject to a rate of **return **(RoR). Any asset can be used with the RoR as long as it is acquired once and generates cash flow at some point in the future.

The **attractiveness **of various investments may be determined, in part, by comparing their historical rates of return to those of comparable assets. A needed rate of return is frequently chosen by **investors **before making an investment decision.

**Return range for a security with returns of normal distribution:**

When a security's returns are regularly distributed, they are symmetrical around the mean return amount. There is a 68% likelihood that the return in this situation will be within one standard **deviation **of the mean. A 95% possibility exists that the return will fall between two standard deviations of the mean. Additionally, there is a 99% likelihood that the **return **will fall within a three standard deviation range of the mean.

With the standard deviation([tex]\sigma[/tex]) and the mean (R) , different probability of the return to fall in a range are mentioned below.

Probability Range

About 68% → [tex]R \pm \sigma[/tex]

About 95% → [tex]R \pm 2\sigma[/tex]

About 95% → [tex]R \pm 3\sigma[/tex]

The approximate **probability **that your return on these bonds will be less than −3.9 percent in a given year:

[tex]R \pm \sigma =[/tex] (5.9 - 9.8) to (5.9 + 9.8)

= -3.9% to 15.7%.

Hence, the approximate probability that the return will be less than -3.9% is 16%.

With **standard **deviation = 9.8% and mean = 5.9%

[tex]R \pm 2\sigma =[/tex] (5.9 - 2x9.8) to (5.9 + 2x9.8)

= (5.9% - 19.6%) to (5.9% + 19.6%)

= -13.7% to 25.5%

Hence the required range of **returns **for 95 percent of the time for long term government bonds is -13.7% to 25.5%.

With standard deviation = 9.8% and **mean **= 5.9%

[tex]R \pm 3\sigma =[/tex] (5.9 - 3x9.8) to (5.9 + 3x9.8)

= (5.9% - 29.4%) to (5.9% + 29.4%)

= -23.5% to 35.3%

Hence, required range of returns for 99 percent of the time for **long term **government bonds is -23.5% to 35.3%.

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Using Return Distributions Suppose the returns on long-term government bonds are normally distributed. Based on the historical record, what is the approximate probability that your return on these bonds will be less than 3.9 percent in a given year? What range of returns would you expect to see 95 percent of the time? What range would you expect to see 99 percent of the time?
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