Recent Question

An investor is considering buying one of two 1. A 10-year bond with a 9% annual coupon has a yield to maturity of 8%. Which of the following statements is CORRECT? a. If the yield to maturity remains constant, the bond’s price one year from now will be higher than its current price. b. The bond is selling below its par value. c. The bond is selling at a discount. d. If the yield to maturity remains constant, the bond’ ...

Other / Other 16 Apr 2016

How could a truly random sample be obtained NARRBEGIN: SA_106_109 The manager of a local fast-food restaurant is interested in improving service provided to customers who use the restaurant’s drive-up window. As a first step in the process, the manager asks his assistant to record the time (in minutes) it takes to serve a large number of customers at the final window in the facility’s drive-up system. The given frame in this ...

Other / Other 16 Apr 2016

The defining property of a simple random sample 1. Identifiable subpopulations within a population are called: a. clusters b. samples c. blocks d. strata e. None of these options 2. A sample in which the sampling units are chosen from the population by means of a random mechanism is a a. probability sample c. stratified sample b. judgmental sample d. systematic sample 3. A judgmental sample is a sample in whic ...

Other / Other 16 Apr 2016

Why do you think the weakening of the currencies did not initially improve the economies 1. On August 26, 1998, the day that Russia decided to let the ruble float freely, the ruble declined by about 50 percent. N the following day, called bloody Thursday, stock markets around the world (including the U.S.) declined by more than 4 percent. Why do you think the decline in the ruble had such a global impact on stock prices? Was the marketà ...

Other / Other 16 Apr 2016

By how much would the change in the capital structure improve the ROE 1. Last year Jandik Corp. had $295,000 of assets, $18,750 of net income, and a debt-to-total-assets ratio of 37%. Now suppose the new CFO convinces the president to increase the debt ratio to 48%. Sales and total assets will not be affected, but interest expenses would increase. However, the CFO believes that better cost controls would be sufficient to offset the hig ...

Other / Other 16 Apr 2016

Intervention Effects on Corporate Performance 1. Effects of September 11. Within a few days after the September 11, 2001 terrorist attack on the U.S., the Federal Reserve reduced short-term interest rates in the U.S. to stimulate the U.S. economy. How might this action have affected the foreign flow of funds into the U.S. and affected the value of the dollar? How could such an effect on the dollar increase the probability that the U.S. econ ...

Other / Other 16 Apr 2016

Why do you think the Indonesia rupiah was more exposed 1. Was the depreciation of the Asian currencies during the Asian crisis due to trade flows or capital flows? Why do think the degree of movement over a short period may depend on whether the reason is trade flows or capital flows? 2. Why do you think the Indonesia rupiah was more exposed to an abrupt decline in value than the Japanese yen during the Asian crisis (even if their econ ...

Other / Other 16 Apr 2016

Intervention Effects on Bond Prices. U.S. bond prices 1. Effects on Currencies Tied to the Dollar. The Hong Kong dollar’s value is tied to the U.S. dollar. Explain how the following trade patterns would be affected by the appreciation of the Japanese yen against the dollar: (a) Hong Kong exports to Japan and (b) Hong Kong exports to the United States. 2. Intervention Effects on Bond Prices. U.S. bond prices are normally inversely ...

Other / Other 16 Apr 2016

Impact of Intervention on Currency Option Premiums 1. Pegged Currencies. Why do you think a country suddenly decides to peg its currency to the dollar or some other currency? When a currency is unable to maintain the peg, what do you think are the typical forces that break the peg? 2. Impact of Intervention on Currency Option Premiums . Assume that the central bank of the country Zakow periodically intervenes in the foreign exchange ...

Other / Other 16 Apr 2016

Did the intervention by the Thai government constitute sterilized or nonsterilized 1. Did the intervention by the Thai government constitute sterilized or nonsterilized intervention? What is the difference between the two types of intervention? Which type do you think would be more effective in increasing the value of the baht? Why? (Hint: Think about the effect of nonsterilized intervention on U.S. interest rates.) 2. If the Tha ...

Other / Other 16 Apr 2016