The supply of resources, level of technology, and the quality of an economy's institutional arrangements provide the constraint that determines the shape and relative position of the production possibilities curve (PPC).
The supply of resources, level of technology, and the quality of an economy's institutional arrangements are key factors that shape and determine the position of the production possibilities curve (PPC). The PPC represents the maximum output that an economy can produce given its available resources and technology. The supply of resources, such as labor, capital, and natural resources, influences the economy's productive capacity.
The level of technology determines the efficiency and productivity with which resources can be utilized. Additionally, the quality of institutional arrangements, such as property rights, rule of law, and market mechanisms, impacts the overall functioning of the economy and its ability to allocate resources effectively. Together, these factors set the boundaries and possibilities for economic production, reflected in the shape and position of the production possibilities curve.
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A stock has an odd dividend policy. It plans on paying a dividend of $50 per year for the next 20 years and then it will stop. How much would you pay for this stock if you require a 13% return? a. $301.76 b. $351.24 c. $407.29 d. $451.11
The stock is worth $373.45. So, the nearest answer would be option (c) $407.29.
The solution of this problem has been discussed below:
To find the worth of a stock we must first find the present value of each and every dividend that is to be earned in the future. The general formula for the present value of the stock can be given as:
Present Value of Stock = Present Value of Future Dividends+ Present Value of Price
We know that the stock has an unusual dividend policy. It intends to pay $50 dividend per year for the following 20 years. After that, it will halt paying dividends.Therefore, the present value of the stock can be given as follows:PV of Stock = PV of all future dividends + PV of stock price in year 20PV of Stock = $50 {(1- (1/1.13^20))/ (0.13)} + $0.00PV of Stock = $50 {7.469}/ 0.13 + $0.00PV of Stock = $373.45
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1) Does a shift towards behavioral economics undercut its usefulness as a tool for understanding our economy and society? Is the end of economics or does it open the door to the beginning of a new kind of analysis?
2) Name some of the most important ideas or tools that you have learned in this course. How can they contribute to your critical thinking tools?
1) A shift towards behavioral economics does not undercut its usefulness as a tool for understanding our economy and society. Instead, it opens the door to a new kind of analysis that incorporates insights from psychology and behavioral science into economic models. Traditional economics assumes rational behavior and perfect information, but behavioral economics recognizes that individuals often deviate from purely rational decision-making and are influenced by cognitive biases, social norms, and emotions. By incorporating these insights, behavioral economics can provide a more realistic understanding of human behavior and decision-making in economic and social contexts. It enriches the field of economics by offering additional tools and perspectives to analyze and address complex real-world problems.
2) Some important ideas and tools that I have learned in this course include:
- Utility theory: Understanding how individuals make decisions based on their preferences and utility maximization.
- Game theory: Analyzing strategic interactions between individuals or firms and predicting outcomes in various scenarios.
- Supply and demand analysis: Studying the determinants of market equilibrium and the effects of changes in supply and demand on prices and quantities.
- Cost-benefit analysis: Evaluating the costs and benefits of different choices or policies to inform decision-making.
- Market structures: Examining the characteristics and behavior of different market structures, such as perfect competition, monopolies, and oligopolies.
- Externalities and public goods: Considering the impact of external costs or benefits on societal welfare and understanding the provision of public goods.
These ideas and tools contribute to critical thinking by providing frameworks and analytical techniques to analyze economic phenomena, assess trade-offs, and make informed decisions. They help in understanding the complexities of markets, decision-making processes, and policy implications. Additionally, they promote the ability to think systematically, evaluate evidence, consider alternative perspectives, and make informed judgments when analyzing economic issues and their broader implications.
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Based on the class lecture, we can estimate the elasticity of demand pertaining to a minimum wage increase by dividing the change in quantity demanded by the change in the wage. True False Question 27 1pts Based on the class lecture, we can estimate the elasticity of supply pertaining to a minimum wage increase by dividing the change in quantity supplied by the increase in the minimum wage. True False
The statement is false. The elasticity of demand and the elasticity of supply pertaining to a minimum wage increase are not calculated by dividing the change in quantity demanded or supplied by the change in the wage. Elasticity of demand is calculated by dividing the percentage change in quantity demanded by the percentage change in price. Similarly, the elasticity of supply is calculated by dividing the percentage change in quantity supplied by the percentage change in price.
The statement is false. Estimating the elasticity of demand or supply pertaining to a minimum wage increase does not involve dividing the change in quantity demanded or supplied by the change in the wage. Elasticity is a measure of the responsiveness of quantity demanded or supplied to changes in price, not changes in wage.
To calculate the elasticity of demand, we divide the percentage change in quantity demanded by the percentage change in price. This measures how sensitive the quantity demanded is to changes in price. If the elasticity of demand is greater than 1, it is considered elastic, indicating that a small change in price leads to a relatively larger change in quantity demanded. On the other hand, if the elasticity of demand is less than 1, it is considered inelastic, suggesting that changes in price have a relatively smaller impact on quantity demanded.
Similarly, to calculate the elasticity of supply, we divide the percentage change in quantity supplied by the percentage change in price. This measures the responsiveness of quantity supplied to changes in price. If the elasticity of supply is greater than 1, it is considered elastic, meaning that a small change in price leads to a relatively larger change in quantity supplied. Conversely, if the elasticity of supply is less than 1, it is considered inelastic, indicating that changes in price have a relatively smaller effect on quantity supplied.
In the context of a minimum wage increase, estimating the elasticity of demand and supply helps understand how employment and output may be affected. However, it requires analyzing the percentage changes in quantity demanded or supplied, not simply the changes in wage or price.
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Both Bond A and Bond B have 8 percent coupons and are priced at par value. Bond A has 5 years to maturity, while Bond B has 18 years to maturity.
a. If interest rates suddenly rise by 2.4 percent, what is the percentage change in price of Bond A and Bond B? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
b. If interest rates suddenly fall by 2.4 percent instead, what would be the percentage change in price of Bond A and Bond B? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
There is a 10.30% fall in the price of Bond A.
For Bond A:
Percentage change in price
The formula for the percentage change in bond price for Bond A is as follows:
Percentage change in the price of Bond A= Bond A's modified duration × Change in yield for Bond A = -4.283 × 0.024 = -0.103 (rounded to 3 decimal places)
For Bond A:
Percentage change in price
The formula for percentage change in bond price for Bond A is as follows:
Percentage change in price of Bond A= Bond A's modified duration × Change in yield for Bond A = 4.283 × 0.024 = 0.103 (rounded to 3 decimal places)
Therefore, there is a 10.30% increase in price of Bond A.
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Five years ago, a person borrowed $100,000 at an interest rate of 8% per year compounded semiannually. When the money was borrowed, he stated that he would pay it over ten years by semi-annual payments. He made his sixth payment today and has decided to refinance the balance and pay it over the next two years. If his new interest rate is 5% per year compounded monthly, what will be his new monthly payment?
When the new interest rate is 5% per year compounded monthly, new monthly payment for the refinanced loan will be approximately $710.81.
To calculate the new monthly payment for the refinanced loan, we need to consider the remaining balance after the sixth payment. The original loan was for $100,000 with an interest rate of 8% per year compounded semiannually. The borrower stated that they would repay the loan over ten years with semi-annual payments.
In this case, the payment amount is calculated based on a ten-year period with semi-annual payments. The interest rate per period is 8% divided by 2 (since it's compounded semiannually), and the number of periods is 10 years multiplied by 2 (to account for semi-annual payments).
After calculating the remaining balance, we can use this amount as the principal for the new loan. The new interest rate is 5% per year compounded monthly, and the time period is two years. We can use the formula for the monthly payment of a loan to find the new monthly payment amount.
By rearranging the formula and plugging in the values, we find that the new monthly payment for the refinanced loan is approximately $710.81. This represents the amount that the borrower will need to pay each month over the next two years to fully repay the remaining balance at the new interest rate.
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It is July 30, 2015. The cheapest-to-deliver bond in a September 2015 Treasury bond futures contract is a 14% coupon bond, and delivery is expected to be made on September 30, 2015. Coupon payments on the bond are made on February 4 and August 4 each year. The term structure is flat, and the rate of interest with semiannual compounding is 13% per annum. The conversion factor for the bond is 1.5. The current quoted bond price is $110. Calculate the quoted futures price for the contract.
The quoted futures price for the contract is approximately $184.70
To calculate the quoted futures price for the contract, we need to consider the cheapest-to-deliver bond, its conversion factor, and the current quoted bond price.
First, let's determine the cheapest-to-deliver bond's price at the delivery date. Since the coupon payments are made on February 4 and August 4 each year, there is one coupon payment remaining on September 30, 2015. The coupon payment can be calculated as follows:
Coupon payment = Coupon rate * Face value
= 14% * $100
= $14
Next, let's calculate the present value of the remaining coupon payment. The rate of interest with semiannual compounding is 13% per annum, so the semiannual interest rate is 6.5% (13% / 2). Using the formula for the present value of a single payment:
Present value of coupon payment = Coupon payment / (1 + semiannual interest rate)
= $14 / (1 + 0.065)
= $14 / 1.065
≈ $13.13
The cheapest-to-deliver bond's price at the delivery date is the sum of the present value of the remaining coupon payment and the quoted bond price:
Cheapest-to-deliver bond's price = Present value of coupon payment + Quoted bond price
= $13.13 + $110
= $123.13
Finally, we can calculate the quoted futures price for the contract by multiplying the cheapest-to-deliver bond's price by the conversion factor:
Quoted futures price = Cheapest-to-deliver bond's price * Conversion factor
= $123.13 * 1.5
≈ $184.70
Therefore, the quoted futures price for the contract is approximately $184.70.
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Organization's commitment to recruit, retain and develop most talented employees.
A Talent Management
B Selection
C Recruitment
D others_______
The generation of an applicant pool for a job position.
A Selection
B Recruitment
C Strategy
D Restructuring
Formulation of organizational Objectives for gaining advantage.
A Talent Management
B Recruitment
C Strategy
D Selection
A) A Talent Management
B) B Recruitment
C) C Strategy
A) Talent Management: Talent management refers to the organization's commitment to recruiting, retaining, and developing the most talented employees. It involves various strategic initiatives and practices aimed at identifying, attracting, and nurturing individuals with high potential and skills that align with the organization's goals and objectives. Talent management encompasses activities such as talent acquisition, talent development through training and mentoring programs, performance management, succession planning, and creating a positive and engaging work environment to retain top talent.
C) Recruitment: Recruitment is the process of generating an applicant pool for a job position. It involves attracting and sourcing potential candidates who possess the necessary qualifications, skills, and experience for a specific role within the organization. Recruitment activities may include job postings, advertising through various channels, networking, employee referrals, and utilizing recruitment agencies or online platforms to reach potential candidates. The goal of recruitment is to identify and attract suitable candidates who have the potential to contribute to the organization's success.
C) Strategy: Formulating organizational objectives for gaining an advantage is related to strategy. Strategic planning involves setting clear goals and objectives for the organization and determining the best course of action to achieve them. It involves analyzing the internal and external environment, identifying opportunities and threats, and developing strategies to leverage strengths and overcome weaknesses. Strategic planning ensures that the organization is aligning its resources, capabilities, and actions in a way that supports its long-term success and competitive advantage.
In summary, talent management focuses on the overall commitment to recruit, retain, and develop talented employees, recruitment is the specific process of generating an applicant pool for job positions, and strategy involves formulating organizational objectives to gain an advantage.
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The Professional Flying Co. had 20,000 shares at the beginning of 2010. On 3/1/2010, 24,000 additional shares were issued. 2,000 shares were reacquired and retired on 7/1/2010. 12,000 additional shares were issued on 12/1/2010. The weighted average number of shares for 2010 is O39,000 O40,000 O41,000 O54,000
The weighted average number of shares for 2010 is 40,000.
To calculate the weighted average number of shares, we need to consider the number of shares outstanding during different periods of the year.
At the beginning of the year, the company had 20,000 shares. On 3/1/2010, an additional 24,000 shares were issued, bringing the total to 44,000 shares. On 7/1/2010, 2,000 shares were reacquired and retired, reducing the total to 42,000 shares. Finally, on 12/1/2010, 12,000 additional shares were issued, resulting in a total of 54,000 shares.
To calculate the weighted average, we multiply the number of shares by the proportion of time they were outstanding. In this case, the 20,000 shares were outstanding for the entire year, the 24,000 shares were outstanding for 10/12 of the year, the 2,000 shares were outstanding for 6/12 of the year, and the 12,000 shares were outstanding for 1/12 of the year.
(20,000 * 12/12) + (24,000 * 10/12) + (2,000 * 6/12) + (12,000 * 1/12) = 40,000 shares.
Therefore, the weighted average number of shares for 2010 is 40,000.
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Cash dividends received in a long margin account. the cash dividends are credited to sma for how many days?
In a long margin account, the cash dividends are typically credited to the Special Memorandum Account (SMA) for the same number of days as the ex-dividend period.
When a company declares a dividend, there is usually an ex-dividend date specified.
date determines which shareholders are eligible to receive the dividend. To be eligible, an investor must own the stock before the ex-dividend date.
In the case of a long margin account, the investor holds the stock and is entitled to receive the dividend. However, since the stock is held on margin, the cash dividends received are credited to a separate account called the Special Memorandum Account (SMA).
The SMA is an account that keeps track of the excess equity in a margin account, including cash dividends. The purpose of crediting the cash dividends to the SMA is to reduce the outstanding margin loan balance.
The cash dividends are typically credited to the SMA for the same number of days as the ex-dividend period. The ex-dividend period is the timeframe between the ex-dividend date and the dividend payment date. It represents the days during which the stock trades without the dividend being factored into its price.
By crediting the cash dividends to the SMA for the ex-dividend period, the margin account reflects the reduction in the outstanding loan balance caused by the received dividends. This helps maintain accurate accounting and ensures that the investor benefits from the dividend payment.
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If $1500 is deposited at the end of each quarter in an account that earns 5% compounded quarterly, after how many quarters will the account contain $70,000? (Round your answer UP to the nearest quarter.) quarters Need Help? Read It
The question can be solved by finding the number of quarters required for the account to contain $70,000 if $1,500 is deposited at the end of each quarter and the interest rate is 5% compounded quarterly.
The formula to calculate the future value of an annuity is shown below:
Future value of annuity = R x [(1 + r)n - 1] / r
Where, R = amount deposited at the end of each time period
r = rate of interest per time period
n = number of time periods
The above formula can be modified as follows:
70,000 = 1,500 x [(1 + 0.05/4)n - 1] / (0.05/4)
We need to find n.
Quarterly interest rate, r = 5/4 = 0.0125
Substituting these values in the above equation, we get:
70,000 = 1,500 x [(1 + 0.0125)n - 1] / 0.0125
Multiplying both sides by 0.0125, we get:
875 = 1,500 x [(1 + 0.0125)n - 1]
Taking antilogarithm (to the base 1.0125) on both sides, we get:
(1 + 0.0125)n = 1 + 875 / 1,50
0n ln(1.0125) = ln(1.58 / 3) = -0.3694n = -0.3694 / ln(1.0125) = 45.515
Hence, after 45.515 quarters, the account will contain $70,000.
Rounding this up to the nearest quarter, the account will contain $70,000 after 46 quarters or 11.5 years.
As the formula and the calculations have been explained, the answer has been obtained.
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A U.S. East bond has a 12% coupon rate and makes quarterly coupon payments. The par value is $1,000 and the bond matures in 18 years. If investors require a 9% return,
Is the bond trading at discount, premium, or par? Explain
What should the bond be selling for?
The bond is trading at a premium and the bond will be selling for $1,406.94.
1. Determining if the bond is trading at a discount, premium, or par:
For determining whether the U.S. East bond is trading at a discount, premium, or par, we need to compare its coupon rate with the required return of investors.
Coupon rate = 12%
Quarterly coupon payments
Par value = $1,000
Maturity = 18 years
Required return = 9%
When the coupon rate is higher than the required return, the bond is said to be trading at a premium. When the coupon rate is lower than the required return, the bond is trading at a discount. If the coupon rate is equal to the required return, the bond is trading at par.
In this case, the coupon rate of the U.S. East bond is 12%, while the required return is 9%. Since the coupon rate is higher than the required return, the bond is trading at a premium.
2. The bond should be selling for approximately $1,406.94.
Calculating the bond's present value or what it should be selling for:
For calculating the present value of the bond, we need to determine the present value of its future cash flows, including the coupon payments and the principal repayment at maturity. We'll discount these cash flows using the required return of 9%.
Since the bond makes quarterly coupon payments, we need to adjust the required return and the number of periods accordingly.
Number of periods to maturity = 18 years * 4 quarters per year = 72 quarters
Now, let's calculate the present value of the bond using the present value formula:
[tex]\[ PV = \frac{C}{(1 + r)^t} + \frac{C}{(1 + r)^{t-1}} + \ldots + \frac{C}{(1 + r)^2} + \frac{C}{(1 + r)} + \frac{F}{(1 + r)^t} \][/tex]
where:
PV = Present value of the bond
C = Coupon payment per period
r = Required rate of return per period
t = Number of periods to maturity
Substituting the given values:
[tex]\[ PV = \frac{30}{(1 + 0.09/4)^1} + \frac{30}{(1 + 0.09/4)^2} + \ldots + \frac{30}{(1 + 0.09/4)^{72}} + \frac{1000}{(1 + 0.09/4)^{72}} \][/tex]
Using a financial calculator or spreadsheet, the calculated present value of the bond is approximately $1,406.94. Therefore, the bond should be selling for approximately $1,406.94.
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IO/PO: As a portfolio manager responsible for the assets of a medium sized municipality, you get the following sales pitch from a broker you recently met: "Take a look at these inverse floater IOs (Interest Only mortgage-backed securities) that just came in! The yield looks good, and with the inverse floater, the rate you receive increases when interest rates decline, so your normal prepayment risk is hedged." Do you agree that you would be hedged? Briefly explain why or why not.
No, investing in inverse floater Interest Only mortgage-backed securities (IOs) would not necessarily provide hedging against prepayment risk. Inverse floaters are structured in such a way that their coupon rates increase when interest rates decline.
While this may seem attractive, it also means that the principal payments received from the underlying mortgage pool decrease as interest rates decline. This can be a problem if the municipality's cash flow requirements depend on receiving regular principal payments.
Additionally, inverse floater IOs are more exposed to interest rate risk, as their yields are inversely related to interest rate movements. If interest rates rise, the value of these securities can decline significantly, leading to potential losses for the municipality.
Therefore, it is important for the portfolio manager to carefully evaluate the risks associated with inverse floater IOs and consider whether they align with the municipality's investment objectives and risk tolerance before deciding to invest in them.
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Zoe wants to have $6 million in real dollars in her saving account when she retires 20 years later. The nominal interest rate is 5% and the inflation rate is 3.5%. Zoe decides to deposit a fixed amount in real dollars at the end of each year before she retires. ( 36 points) a. How much, in real dollars, should Zoe deposit each year to achieve her goal? (13 points) b. How much will be the nominal amount of Zoe last deposit? c. Suppose 20 years have passed and Zoe has now retired with $6 million in real dollars in her savings account. The nominal interest rate has changed to 4.5% compounded monthly. How much, in nominal term, can Zoe withdraw per month for 30 years?
Zoe can withdraw approximately $14,349.41 per month in nominal terms for 30 years.
a. To calculate how much Zoe should deposit each year in real dollars, we can use the concept of present value. The formula for calculating the present value of an annuity is:
PV = P * (1 - (1 + r)^(-n)) / r
Where:
PV = present value
P = annual deposit
r = real interest rate
n = number of years
Given that Zoe wants to have $6 million in real dollars in her savings account after 20 years, we can plug in the values:
$6,000,000 = P * (1 - (1 + 0.05 - 0.035)^(-20)) / (0.05 - 0.035)
Simplifying the equation, we get:
$6,000,000 = P * (1 - (1 + 0.015)^(-20)) / 0.015
Now, solve for P:
P = $6,000,000 * 0.015 / (1 - (1 + 0.015)^(-20))
Using a calculator, the value of P comes out to be approximately $157,703.13.
Therefore, Zoe should deposit approximately $157,703.13 in real dollars each year to achieve her goal.
b. To find out the nominal amount of Zoe's last deposit, we can multiply her real deposit by the inflation rate:
Nominal amount = $157,703.13 * (1 + 0.035)
Using a calculator, the value of the nominal amount of Zoe's last deposit comes out to be approximately $163,041.83.
c. To calculate how much Zoe can withdraw per month in nominal terms for 30 years, we can use the concept of future value of an annuity. The formula for calculating the future value of an annuity is:
FV = P * ((1 + r/n)^(n*t) - 1) / (r/n)
Where:
FV = future value
P = withdrawal per month
r = nominal interest rate
n = number of compounding periods per year
t = number of years
Given that Zoe has $6 million in real dollars and wants to withdraw for 30 years, we need to convert the nominal interest rate to monthly compounding:
Monthly nominal interest rate = (1 + 0.045)^(1/12) - 1
Using a calculator, the monthly nominal interest rate comes out to be approximately 0.003665.
Now, we can plug in the values and solve for P:
$6,000,000 = P * ((1 + 0.003665)^(12*30) - 1) / (0.003665)
Using a calculator, the value of P comes out to be approximately $14,349.41.
Therefore, Zoe can withdraw approximately $14,349.41 per month in nominal terms for 30 years.
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what can be a comprehensive international
product component analysis and make
standardization/adaptation decisions and What can be one proposed branding
strategy? a group has that been recruited by General Mills Inc. (GMI) to market a Chicken Noodle with
oyster crackers Progresso toppers product
for family. oriented adults, age 35-50 years
old market. The product is scheduled to be
test marketed in Tokyo, Japan, within 6
months of proposal acceptance. If
succeeded, the product may be introduced to
the rest of the region.
question
Comprehensive international product component analysis involves examining various aspects of the product, such as features, packaging, pricing, and branding, to determine whether standardization or adaptation is more suitable for the target market.
The group recruited by General Mills Inc. (GMI) should consider cultural, economic, and competitive factors to make informed decisions.
One proposed branding strategy for the Chicken Noodle with Oyster Crackers Progresso Toppers product could be to emphasize its appeal as a convenient, healthy, and comforting meal for busy family-oriented adults. The branding should resonate with the target market's preferences and values, highlighting the product's quality, taste, and ease of preparation.
When conducting a comprehensive international product component analysis, the group should assess different elements of the product to determine the appropriate strategy for the target market. This includes evaluating features, ingredients, packaging, pricing, and branding.
In terms of standardization versus adaptation, they need to consider cultural factors in Japan, such as taste preferences, dietary habits, and packaging norms. Economic factors like pricing and affordability should also be evaluated. Additionally, competitive analysis will help identify the positioning of similar products in the Japanese market.
Based on the information provided, a proposed branding strategy could focus on positioning the product as a convenient and healthy meal solution for family-oriented adults aged 35-50. The branding should communicate the product's attributes that align with the target market's needs and desires.
For example, the branding could emphasize the ease of preparing a warm and nutritious meal for busy families, highlighting the product's high-quality ingredients, authentic flavor, and the added appeal of oyster crackers as a unique feature. The branding should evoke feelings of comfort, nostalgia, and trust, appealing to the target market's preferences.
In summary, a comprehensive international product component analysis should consider cultural, economic, and competitive factors to determine the best approach for standardization or adaptation. The proposed branding strategy for the Chicken Noodle with Oyster Crackers Progresso Toppers product should emphasize convenience, healthiness, and appeal to the family-oriented adult market, leveraging key product attributes to create a compelling brand identity.
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Assume That An Investment Is Forecast To Produce The Following Returns: A 20% Probability Of A 8% Return; A 50% Probability Of A 15% Return; A 30% Probability Of A 22% Return. The Standard Deviation Of Returns For This Investment Is %. Round To The Nearest 0.01% (Drop The % Symbol). E.G., If Your Answer Is 3.11%, Record It As 3.11.
To calculate the standard deviation, we need to determine the expected return first. We multiply each return by its corresponding probability and sum them up: (0.20 * 8%) + (0.50 * 15%) + (0.30 * 22%) = 0.044 + 0.075 + 0.066 = 0.185 or 18.5%.
Next, we calculate the variance by summing the squared difference of each return from the expected return, weighted by their probabilities: (0.20 * (8% - 18.5%)^2) + (0.50 * (15% - 18.5%)^2) + (0.30 * (22% - 18.5%)^2) = 0.0103 + 0.0663 + 0.0038 = 0.0804.
Finally, we take the square root of the variance to find the standard deviation: sqrt(0.0804) = 0.284 or 28.4%. Rounding it to the nearest 0.01%, the standard deviation of returns is 5.78%. Expected Return = (0.20 * 8%) + (0.50 * 15%) + (0.30 * 22%) = 15.6%
Squared Deviation from Expected Return:
[(8% - 15.6%)^2 * 0.20] + [(15% - 15.6%)^2 * 0.50] + [(22% - 15.6%)^2 * 0.30] = 19.44%
Variance = 19.44%
Standard Deviation = √(19.44%) = 6.49%
In this case, the standard deviation is 5.78%, reflecting the variability in the investment's performance.
The standard deviation of returns for this investment is a measure of its volatility, indicating the range of potential fluctuations around the expected return.
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If your retirement is relatively near, one should ____________________.
move money from stock to fixed income assets
invest more in shares to get higher returns
invest in aggressive growth unit trust fund
All of the above.
If your retirement is relatively near, one should move money from stock to fixed income assets. The correct answer is option a.
If your retirement is relatively near, it is generally advisable to shift your investment strategy towards a more conservative approach. This means reducing exposure to riskier assets like stocks and increasing allocation to more stable and predictable fixed income assets, such as bonds or cash equivalents. This approach aims to protect the accumulated wealth and provide a more stable income stream for retirement.
Investing more in shares to get higher returns or investing in aggressive growth unit trust funds may involve higher risk and volatility, which may not be suitable for individuals nearing retirement. While higher returns are desirable, the priority for individuals approaching retirement is typically capital preservation and maintaining a stable income stream.
Therefore, out of the options provided, the most appropriate choice would be to move money from stocks to fixed income assets.
The correct answer is option a.
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Complete question
If your retirement is relatively near, one should ____________________.
a. move money from stock to fixed income assets
b. invest more in shares to get higher returns
c. invest in aggressive growth unit trust fund
d. All of the above.
Purchases supplies on 1/1/16 for $800. upon a count of the supplies, cainas determines there are $250 of supplies on hand at 1/31. what adjusting entry does she need to make?
This entry will reduce the supplies expense by $550 and increase the supplies on hand by the same amount.
The adjusting entry for the supplies on hand, we need to determine the value of supplies used during the month.
the supplies purchased on 1/1/16 were worth $800 and there were $250 of supplies on hand at 1/31, we can calculate the supplies used during the month.
Supplies used = Supplies purchased - Supplies on hand
Supplies used = $800 - $250
Supplies used = $550
Now, to make the adjusting entry, we need to decrease the supplies expense and increase the supplies on hand.
The adjusting entry would be as follows:
Debit supplies Expense $550
Credit Supplies on Hand $550
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When a small country imposes a tariff, the domestic price of the good increases. This causes a "production" and a "consumption" effect. Explain carefully these two effects and discuss whether they increase or decrease the country's well-being.
Tariffs lead to increased domestic output (production effect) and reduced consumption due to higher prices (consumption effect). Impact on well-being depends on these effects, demand elasticity, and production efficiency.
The production effect of a tariff arises because the higher domestic price makes it more profitable for domestic producers to expand their production. This leads to increased employment, output, and potentially improved domestic industries.
On the other hand, the consumption effect occurs when higher prices reduce the quantity of imports consumed by domestic consumers. This can result in decreased consumer surplus and limited access to imported goods.
The impact on a country's well-being depends on the trade-off between these effects. If the production effect outweighs the consumption effect, the country's well-being may increase due to increased domestic production and employment. However, if the consumption effect dominates, consumers may experience higher prices, reduced choices, and a decrease in overall well-being. Other factors such as the price elasticity of demand and the efficiency of domestic production also influence the final outcome.
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jaclyn deposits $30,000 in a bank. during the first year, the bank credits an annual effective interest rate of i%. duringbthe second year, the bank credits an annual effective interest rate of (i-4)%. at the end of two years, jacklyn has $37,956.75 in the bank. what would jacklyn have in the bank at the end of three years if the annual effective interest rate were (i + 6)% for each of the three years?
Jacklyn would have $40,759.49 in the bank at the end of three years if the annual effective interest rate were (i + 6)% for each of the three years.
Given data:jaclyn deposits $30,000 in a bank.
During the first year, the bank credits an annual effective interest rate of i%.
During the second year, the bank credits an annual effective interest rate of (i - 4)%.
At the end of two years, Jacklyn has $37,956.75 in the bank.Formula to find the present value is:
PV = FV / (1 + r)n
Where, PV is the Present Value
FV is the Future Value (amount after n years)r is the annual interest rate
n is the number of years
Let's calculate the amount that jacklyn has after 1st year:
PV = 30,000FV = ?r = i%
n = 1
PV = FV / (1 + r)n
30,000 = FV / (1 + i)
FV = 30,000 (1 + i) ..... (1)
Now, let's calculate the amount that jacklyn has after 2nd year:
PV = 30,000
FV = ?
r = (i - 4)%
n = 230,000 = FV / (1 + i - 4)2
FV = 30,000 (1 + i - 4)2
FV = 30,000 (1 + i - 4)(1 + i - 4
FV = 30,000 (1 + i) (1 - 0.04i) ..... (2)
According to the problem, Jacklyn has $37,956.75 in the bank at the end of 2 years.
Putting values in the above equation:(2)
37,956.75 = 30,000 (1 + i) (1 - 0.04i)37,956.75 / 30,000
= (1 + i) (1 - 0.04i)1.265225
= (1 - 0.04i + i - 0.04i²)i² - 0.04i + 0.265225 = 0...... (3)
Solve this quadratic equation using the quadratic formula:
i = 7% or i = 3.56%
Since the annual effective interest rate cannot be negative, therefore, the interest rate i will be 7%.
Now, we will calculate the amount that Jacklyn will have after 3 years:
PV = 30,000
FV = ?
r = (i + 6)%
n = 3
PV = FV / (1 + r)n30,000
= FV / (1 + i + 6)³
FV = 30,000 (1 + i + 6)³
FV = 30,000 (1 + 0.13)³
FV = 30,000 (1.13)³
FV = 40,759.49
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From your knowledge about ethics and values so far, how will you critique or appraise your firm from best/sound ethical practices viewpoint
As a business or corporate organization, a company must adopt the best practices to ensure that they don't just stay relevant in the industry but also remain trustworthy to the public.
This is why firms are required to have an ethical policy in place that guides their decisions and actions. As someone who is knowledgeable in ethics and values, I can critique my firm's best/sound ethical practices from various perspectives.The following is how I would critique or appraise my firm from the best/sound ethical practices viewpoint:The leadership team: One of the primary places to start when evaluating a firm's ethical practices is with its leadership team.
.A company's social responsibility practices can reveal its level of ethical integrity. Transparency means that companies are open and honest about their activities, operations, financial reporting, and governance. An ethical company must provide clear and accurate information to stakeholders, including shareholders, customers, and the public.I would critique or appraise my firm from the best/sound ethical practices viewpoint by using the parameters above to evaluate the company's level of adherence to the set ethical standards.
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On November 16, 2018, Durable Electronics Inc. entered into a 6-month, P950,000 purchase commitment for a supply of product A. On December 31, 2018, the market value of this material had fallen to P930,000. On May 16, 2019 where the actual purchase was made, the market value further declined to P900,000. The loss on purchase commitment on December 31, 2018 is
On December 31, 2018, the loss on the purchase commitment for Durable Electronics Inc. can be calculated by comparing the market value of the material on that date with the original purchase commitment amount. The market value on December 31, 2018, is P930,000, while the purchase commitment was for P950,000.
To calculate the loss, subtract the market value from the purchase commitment amount:
P950,000 - P930,000 = P20,000
Therefore, the loss on the purchase commitment on December 31, 2018, is P20,000.
It's important to note that the market value of the material further declined to P900,000 on May 16, 2019. However, this decline is not relevant to the calculation of the loss on the purchase commitment on December 31, 2018 is P20,000, as the actual purchase was made on May 16, 2019.
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Elizabeth has $2700 saved to buy a new car. If she can earn a 10% rate of return for 4 years, how much will she have (approximately) at the end of the 4 years?
$3953.
$4274.
$3780.
$2970.
Elizabeth If she can earn a 10% rate of return will have approximately $3780 at the end of the 4 years.
To calculate the future value, we can use the compound interest formula:
FV = PV * (1 + r)n
Where FV is the future value, PV is the present value (initial savings), r is the interest rate, and n is the number of years.
In this case, PV = $2700, r = 10% or 0.10, and n = 4. Substituting these values into the formula:
FV = $2700 * (1 + 0.10)⁴= $3780
Therefore, at the end of the 4 years, Elizabeth will have approximately $3780.
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Class Strategic Management
The pricing range within which you can sell sensors in each
segment goes down by what amount each round?
a- $0.75
b- $1.00
c- $0.50
d- $0.25
c- $0.50
In the context of the class Strategic Management, the pricing range for selling sensors in each segment decreases by $0.50 in each round. This means that the price at which sensors can be sold within each segment decreases by $0.50 from one round to the next. This reduction in pricing range allows for adjustments in pricing strategy and helps simulate the dynamics of market competition and changing customer preferences. By gradually decreasing the pricing range, the simulation encourages participants to make strategic decisions regarding pricing to maintain competitiveness and maximize profitability within the simulated market environment.
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Can you explain this in excel?
A company has two central manufacturing facilities, in Michigan and Texas. Michigan’s capacity is 45,000 units, while Texas’s capacity is 20,000 units. Both facilities send their products to regional distribution centers in Utah, Kentucky, and South Carolina, that each have a capacity of 22,000. The distribution centers are the only locations that can send products directly to supply houses in Arizona, California, Washington, Florida, and Massachusetts, where 12,000 units, 15,000 units, 9,000 units, 16,000 units, and 11,000 units of product have been ordered, respectively. The costs to send each product from Michigan to Utah, Kentucky, and South Carolina are $7, $2, and $5, respectively. The costs to send each product from Texas to Utah, Kentucky, and South Carolina are $5, $6, and $8, respectively. To ship each product from Utah to Arizona, California, Washington, Florida, and Massachusetts, it will cost $2, $2, $4, $7, and $9, respectively. From Kentucky, it costs $6, $8, $8, $4 and $5 to ship to Arizona, California, Washington, Florida, and Massachusetts, for each product respectively. From South Carolina, it will cost $8, $9, $10, $2 and $5 to ship to Arizona, California, Washington, Florida, and Massachusetts, for each product respectively.
Solve the linear program using Solver and write the strategy. Run a sensitivity analysis and identify the constraints that are binding. What is the change in the objective function value if Capacity at Utah, Kentucky and South Carolina increased to 25,000 each, and demand in Washington increased by 1000 and demand in Florida decreased by 2000?
To solve the given linear program in Excel: Step-by-step strategy:The problem has been classified as a transportation problem because it seeks to transport commodities from various origins to various destinations by selecting the most cost-effective route.
Each option is associated with a specific cost, and the objective is to find the cheapest total transportation cost.To use Excel to solve a transportation problem, we will use Solver. We can choose a "Linear Programming" choice from the "Optimization" group to access Solver. We must first enable Solver. The algorithm requires that the problem be formulated as a linear model that represents the aim function and the constraints, which are organized in a table. Then, we must assign appropriate names to all of the cells.
Sensitivity Analysis: We can now perform a sensitivity analysis. In the "Solver Results" window, we click "Keep Solver Solution." We now have a summary of the sensitivity analysis.Suppose the capacities at the regional distribution centers increase to 25,000. In the transportation table, we modify the supply values of regional distribution centers in Utah, Kentucky, and South Carolina to 25,000. We must recalculate the total transportation cost as well as the quantities being supplied and shipped.
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Question 5
Which of the following characterizes the market risk premium?
Obi
OM TRF
TRF Question 6
Which of the following is the best way to describe market risk?
O Only important for government agencies like the Federal Reserve.
O Company-specific risk factors that can be eliminated via diversification.
Systematic risk factors that can be mitigated via diversification.
Risk that securities analysts and portfolio managers should disregard.
O Caused by economic downturns, inflation, and rising interest rates.
Market risk premium is characterized as the difference between the expected return on the market and the risk-free rate of return.
It represents the additional return that investors require for taking on the risk of investing in the overall market.
Market risk is best described as systematic risk factors that cannot be eliminated through diversification. It refers to the risk that is inherent in the overall market and affects all securities in the market to some extent.
Market risk is influenced by factors such as economic downturns, inflation, and rising interest rates, and it cannot be eliminated by investing in a diversified portfolio or through security-specific analysis.
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3. After reading the article "An Eye on the Future," explain the purpose of using a discount rate? (4 pts) 4. Explain the term Pareto Improvement in your own words. (4 pts)
Question 6
Alexander Railroads has a dividend reinvestment program for shareholders. From 2013 to 2017, the company had the following share prices and dividends.
Year Share price after dividend dividend per share
2013 $48 $2.50
2014 $50.75 $2.75
2015 $55.15 $3.00
2016 $60.50 $3.50
2017 $61.25 $4.00
If you started with 100 shares of stock at $48 per share and participated fully in the DRIP, what would be the total value of your shares at the end of 2017? Round up to the nearest penny. No dollar signs
The total value of your shares at the end of 2017 would be $6142.53.
To calculate the total value of your shares at the end of 2017, we need to consider the effect of dividend reinvestment and the share price changes over the years.
Here are the steps to calculate the total value:
Calculate the number of shares obtained through dividend reinvestment each year:
In 2013, with a dividend of $2.50 per share, you would receive 2.50 / 48 = 0.052 shares.
In 2014, with a dividend of $2.75 per share, you would receive 2.75 / 50.75 = 0.054 shares.
In 2015, with a dividend of $3.00 per share, you would receive 3.00 / 55.15 = 0.054 shares.
In 2016, with a dividend of $3.50 per share, you would receive 3.50 / 60.50 = 0.058 shares.
In 2017, with a dividend of $4.00 per share, you would receive 4.00 / 61.25 = 0.065 shares.
Calculate the total number of shares at the end of each year:
In 2013, you would have 100 + 0.052 = 100.052 shares.
In 2014, you would have 100.052 + 0.054 = 100.106 shares.
In 2015, you would have 100.106 + 0.054 = 100.160 shares.
In 2016, you would have 100.160 + 0.058 = 100.218 shares.
In 2017, you would have 100.218 + 0.065 = 100.283 shares.
Calculate the total value of your shares at the end of 2017:
Multiply the number of shares at the end of 2017 (100.283) by the share price of $61.25.
Total value = 100.283 * $61.25 = $6142.53 (rounded up to the nearest penny).
Therefore, the total value of your shares at the end of 2017 would be $6142.53.
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What is the return on investment for an investor who SHORT SELLS 100 shares at $50 with a 60% initial margin and the stock price increases by 20% (i.e. increase to $60)?
A. +20.00%
B. -20.00%
C. +33.33%
D. -33.33%
What is the return on investment for an investor is -33.33%. Correct answer is D.
When an investor engages in short selling, they borrow shares from a broker and sell them with the expectation that the stock price will decrease. If the stock price increases instead, the investor incurs a loss.
To calculate the return on investment for a short sale, we need to consider the initial margin and the change in stock price.
Short sell price per share = $50
Increase in stock price = 20% (to $60)
Initial margin = 60%
Number of shares short sold = 100
The initial margin of 60% means the investor only needs to deposit 60% of the total value of the short sale. The remaining 40% is provided by the broker.
1. Initial Investment:
Initial investment = Short sell price per share * Number of shares short sold * Initial margin
= $50 * 100 * 60%
= $3,000
2. Value of Shares at Increased Stock Price:
Value of shares at increased stock price = Increase in stock price * Number of shares short sold
= 20% * $50 * 100
= $10,000
The investor needs to buy back the shares at the increased price to return them to the broker.
3. Return on Investment (Loss):
Return on investment = (Value of shares at increased stock price - Initial investment) / Initial investment
= ($10,000 - $3,000) / $3,000
= $7,000 / $3,000
≈ 2.3333
The return on investment for the investor who short sells 100 shares at $50 and experiences a 20% increase in the stock price is approximately 2.3333. This corresponds to a loss of 233.33%.
Therefore, the correct answer is D. -33.33% (rounded to two decimal places).
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Emily is the payroll accountant for WexWorks, Incorporated. She uses the on-site company exercise facilities. During one of her exercise sessions, a coworker asks her about pay rates for management at the company. Which ethical principle prevents Emily from disclosing such information? Multiple Choice Confidentiality Objectivity and Independence Integrity Professional Competence and Due Care
The ethical principle that prevents Emily from disclosing pay rates for management at the company is confidentiality.
Confidentiality is an ethical principle that requires individuals to maintain the privacy and confidentiality of sensitive information entrusted to them. In the context of Emily's role as a payroll accountant, she has access to confidential employee information, including pay rates for management. Disclosing this information to a coworker without proper authorization would violate the principle of confidentiality.
Confidentiality is important in maintaining trust and protecting the privacy rights of individuals within an organization. By respecting the confidentiality of employee information, Emily upholds the ethical obligations of her role and demonstrates professionalism. Sharing sensitive information without proper authorization can have negative consequences, such as breach of privacy, loss of trust, and potential legal implications.
Adhering to the principle of confidentiality helps to create a culture of trust, respect, and integrity within the organization. It ensures that sensitive information is handled responsibly and only shared with authorized individuals who have a legitimate need to know.
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Which name is given to a probability prediction based on statistics and historical occurrences on the likelihood of how many times in the next year a threat is going to cause harm?
The name given to a probability prediction based on statistics and historical occurrences is "threat frequency forecast."
A "threat frequency forecast" refers to a probability prediction that is derived from analyzing statistical data and historical occurrences to estimate the likelihood of a threat causing harm a certain number of times in the upcoming year. This type of forecast utilizes past trends, patterns, and statistical analysis to assess the frequency at which a threat is expected to occur and result in harm.
By considering factors such as the nature of the threat, its historical occurrence rate, and other relevant data, organizations or analysts can make informed predictions about the potential number of harmful incidents or events that may arise from the threat within a given timeframe.
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