The answer is option a, which states that an invention sought to be patented is a living creature. Since Diamond v. Chakrabarty, genetically modified organisms can be patented, making option a incorrect as a reason for denial.
The correct answer to the student's question about a valid condition for denying a patent application is option a: The "invention" sought to be patented is actually a living creature. After the 1980 Diamond v. Chakrabarty case, it became possible to patent genetically modified organisms, meaning that living creatures, if altered by humans, could be subject to a patent. This decision allowed for the patenting of genetically modified bacteria, plants, and even specific genes, as long as they met the criteria of being distinct, new, and not naturally occurring.
Options b, c, and d represent legally recognized reasons for denying a patent. In option b, if an invention was previously known or documented, it is not considered novel and therefore not patentable. Option c, abandonment, refers to a situation where the inventor stops pursuing the patent without a good reason, and in option d, one must be the true inventor to apply for a patent. However, none of these options represents a barrier to entry that is both a valid reason for denying a patent and directly government-enforced.
A higher Discount Rate tends to ___________ the price of loans because the overall supply of bank reserves tends to be smaller..
Answer:
decrease
Explanation:
Discount rates on loans have an inverse relationship with loan prices; if the rate increases, the price will decrease and vice versa. In this case, a higher discount rate will decrease the price of loans as excess reserves in commercial banks and other lending institutions get smaller. This reduces the overall money supply in the economy.
Assume deflation is occurring in a nation; the implication(s):
Answer:
1) Demand for goods declines
2) Salaries declines
3) Bank loans reduces
4) Buyers' losses increase
5) Wages declines, debts increases
6) Interest rates go to zero
7) Business profits decrease
8) Unemployment increases
Explanation:
There are always reasons to beware of deflation. These are:
1) While consumers are not in a hurry to buy goods in the prospect of falling prices, there is a delay in demand, and demand for goods declines. In addition, prices are falling in response to a declining student.
2) Salary projections are also declining, and consumers are more likely to save than spend money. For example, 70% of US economic growth is based on consumption, which could lead to overall GDP decline in the country.
3) The volume of bank loans is also reduced, as repayment of interest rates that are larger than the loans themselves is not beneficial to the borrower.
4) Buyers are subject to a loss of value over time as the value of the goods they purchase.
5) The higher the debt of the borrower, the worse it is: during deflation, wages are reduced, and debt remains the same.
6) During inflation there is no upper limit of interest rates, and in deflation they go to zero. Banks do not offer 0% credit, and when rates are above zero, banks make money, but borrowers have to make losses here.
7) Companies' profits also decrease during deflation, which results in lower securities prices. This worries private investors who want to keep their profits out of dividends.
8) Unemployment increases while companies' struggles to make a profit, and their wages decrease. These processes have a negative impact on the economy as a whole.
Suppose Fiat recently entered into an Agreement and Plan of Merger with Case for $4.3 billion. Prior to the merger, the market for four-wheel-drive tractors consisted of five firms. The market was highly concentrated, with a Herfindahl-Hirschman index of 2,765. Case’s share of that market was 22 percent, while Fiat comprised just 12 percent of the market. If approved, by how much would the post merger Herfindahl-Hirschman index increase?
Answer:
The Post Merger Herfindahl-Hirschman index will increase by 528 Points
Explanation:
Herfindahl-Hirschman index or simply the HH Index measures a market's level of competitiveness based on the number of firms participating in the industry.
HH Index has a maximum of 10,000 points for a market that is dominated by one firm and continues to reduce and tend towards 0 as the number of firms with equal sizes in the industry increases. In other words, the increase in an industry's HH Index is a function of the decrease in the number of firms in the industry and the disparities in sizes among the firms in the industry.
For acceptable levels of HH Index, the general consideration is that a market with HH Index between 1,500 and 2,500 has a moderate concentration, while any market with HHI higher than 2,500 points is highly concentrated.
To the Question,
the Success of the Merger between Fiat and Case would reduce the number of firms in the market and this will lead to an increased HHI,The formula for increase in HH Index==10,000 (Maximum HHI Points) [(22% (Case's Market Share + 12% (Fiat's Market Share)^2 - (22%)^2- (12%)^2]= 10,000 [(0.22 + 0.12)^2 - (0.22)^2 - (0.12)^2]=10,000 (0.0528)=528 PointsThis means the Post Merger HH Index will increase by 528 Points from 2,765 to 3, 293 (2,765+528)The Herfindahl-Hirschman Index (HHI) post the merger between Fiat and Case with market shares of 12% and 22% respectively, increases by 532.
Explanation:Herfindahl-Hirschman Index (HHI) is used to measure the concentration of market by adding the square of the market share of each firm in the industry. In this case, there is a merger between Fiat and Case with market shares of 12% and 22% respectively. You calculate market concentration post-merger by squaring the new combined market share of the merged entity (Fiat-Cases), and add it to the HHI of the other remaining firms. The increased HHI after the merger can be calculated as follows: ((12 + 22)^2 - (12^2 + 22^2)) = (34^2 - (144 + 484)) = 1160 - 628 = 532. Hence, the post merger Herfindahl-Hirschman index would increase by 532.
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The net present value of a proposed investment is negative. Therefore, the discount rate used must be:
A. greater than the project's internal rate of return.
B. less than the project's internal rate of return.
C. greater than the minimum required rate of return.
D. less than the minimum required rate of return.
Answer:
A. greater than the project's internal rate of return.
Explanation:
Net present value method: In this method, the initial investment is subtracted from the discounted present value cash inflows. If the amount comes in positive than the project is beneficial for the company otherwise not. It shows the inverse relationship between the net present value and the discount rate
The computation of the Net present value is shown below
= Present value of all yearly cash inflows after applying discount factor - initial investment
The discount factor should be computed by
= 1 ÷ (1 + rate) ^ years
Internal rate of return: It is that rate of return in which the net present value is zero. i.e NPV = zero
On their second date, Colby and Mac spend a considerable amount of time talking about their pasts, revealing their likes and dislikes, and exploring their compatibilities. Colby and Mac's interactions are indicative of which stage of relationship development?
contact
involvement
intimacy
dissolution
Answer:
The correct answer is letter "B": involvement.
Explanation:
In the involvement stage of relationships, people share personal information in detail such as past experiences and they start to show each other emotions and feelings. According to specialists, this happens because both parties are measuring the other's interest to find out how far the relationship could go.
Patricia McDonald has determined that the value of her liquid assets is $4,500, the value of her real estate is $148,000, the value of her personal possessions is $62,000, and the value of her investment assets is $73,000. She has also determined the value of her current liabilities is $7,500 and the value of her long term liabilities is $98,000. What is Patricia's net worth?
Answer:
$182,000
Explanation:
Total assets:
= Value of her liquid assets + Real estate + Personal possessions + Investment assets
= $4,500 + $148,000 + $62,000 + $73,000
= $287,500
Total liabilities:
= Current liabilities + Long term liabilities
= $7,500 + $98,000
= $105,500
Net worth:
= Total assets - Total liabilities
= $287,500 - $105,500
= $182,000
Where the agreement of the parties is contrary to any of the provisions or standards in a preprinted sales contract, it is BEST to:_____
a. Insert one or more special clauses in an addendum to the contract.
b. Renegotiate the contrary item(s) with the parties to the contract.
c. Line out the particular provision or standard affected.
d. Prepare a nonstandard contract.
Answer: Insert one or more special clauses in an addendum to the contract.
Explanation:
The standard provision are assumed to apply to every contract especially when signed on a pre-printed contract agreement that contains such standards.
In the above scenario the provision of the sales contract in a pre-printed sales contract applied to the parties.
To give validity to the contrary terms an addendum of it has to be added to the standard of the pre-printed sales contract.
Re- negotiating or listen the contrary terms does not give validity to it, neither does preparing a non standard contract.
Joni Kingbird Inc. has the following amounts reported in its general ledger at the end of the current year.
Organization costs $24,200
Trademarks 16,500
Discount on bonds payable 37,200
Deposits with advertising agency for ads to promote goodwill of company 12,200
Excess of cost over fair value of net identifiable assets of acquired subsidiary 77,200
Cost of equipment acquired for research and development projects; the equipment has an alternative future use 87,200
Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years 83,400
On the basis of this information, compute the total amount to be reported by Kingbird for intangible assets on its balance sheet at year-end.
Answer:
$93,700
Explanation:
Excess of cost over fair value of net identifiable assets of acquired subsidiary Shall be considered as good will and it will come under the head intangible assets.
Other are considered to be a expense.
Total amount reported for intangible assets:
= Trademarks + Excess of cost over fair value of net identifiable assets of acquired subsidiary
= $16,500 + $77,200
= $93,700
Lone Star has computed the following unit costs for the year just ended:
Direct material used $12
Direct labor $18
Variable manufacturing overhead $25
Fixed manufacturing overhead $29
Variable selling and administrative cost $10
Fixed selling and administrative cost $17
Under absorption costing, each unit of the company's inventory would be carried at:
$55.
$65.
some other amount.
$84.
$35.
Answer:
$84
Explanation:
The computation of each unit of the company's inventory under absorption costing is shown below:
= Direct material used + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead
= $12 + $18 + $25 + $29
= $84
We simply added the first four-unit cost through which total unit cost would come
All other information which is given is not relevant. Hence, ignored it
At L=64, K = 82, the marginal product of labor is 10 and the marginal product of capital is 20. What is the marginal rate of technical substitution (labor measured on the horizontal axis)?
The marginal rate of technical substitution is _________.(Enter a numeric response using real number rounded up to two decimal places)
Answer:
-0.5
Explanation:
Marginal rate of technical substitution (MRTS) refers to the rate at which the inputs are substituted for one another in a production of particular good.
Given that,
The marginal product of labor = 10
The marginal product of capital = 20
Hence,
[tex]MRTS=(-)\frac{MP_{L} }{MP_{K} }[/tex]
[tex]MRTS=(-)\frac{10}{20}[/tex]
= - 0.5
Therefore, the marginal rate of technical substitution is - 0.5.
The Marginal Rate of Technical Substitution (MRTS) is -0.5, indicating that each additional unit of capital can substitute 0.5 units of labor while maintaining the same production level.
Explanation:The Marginal Rate of Technical Substitution (MRTS) measures the rate at which a firm can substitute capital for labor and still remain at the same level of production. It is calculated by taking the negative ratio of the marginal product of labor (MPL) to the marginal product of capital (MPK), as labor is measured on the horizontal axis. In the given scenario, the MPL is 10 and the MPK is 20.
To calculate the MRTS, we use the formula: MRTS = -MPL/MPK. By substituting the given values, we get MRTS = -10/20 = -0.5.
So, in this case, the Marginal Rate of Technical Substitution is -0.5, meaning that each additional unit of capital used would decrease the amount of labor needed by 0.5 units, maintaining the same level of production.
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Your project sponsor, after reading through the risk response plan, has sent you an email asking you to justify the costs associated with the risk responses. You have decided to have each risk owner justify the cost for the responses to their risks. In delegating this work to them, provide instructions on how they would complete this analysis to show the benefit of the risk responses.
Answer:
Please find the detailed answer as follows:
Explanation:
A cost benefit analysis will be the most appropriate in this case.
Instructions to develop cost association with the risk responses:
List the risks associated with the system Note down the direct costs associated with the risk Note down the indirect costs associated with the risk Highlight the benefits associated with the solution for the risk
Given the acquisition cost of product Z is $64, the net realizable value for product Z is $58, the normal profit for product Z is $5, and the market value (replacement cost) for product Z is $60, what is the proper per unit inventory price for product Z?
a. $64.
b. $60.
c. $53.
d. $58.
Answer:
option (d) $58
Explanation:
Data provided in the question:
Acquisition cost of product Z = $64
Net realizable value for product Z = $58
Normal profit for product Z = $5
Market value (replacement cost) for product Z = $60
Now,
Floor Net realizable value = Net realizable value - Normal profit
= $58 - $5
= $53
Proper per unit inventory price for product Z
= lower of [ cost , net reliable value ]
= lower of [ $64 , $58 ]
= $58
Hence,
The answer is option (d) $58
By helping communicate about brands, advertising in the era of industrialization made previously unmarked commodities into differentiated product offerings, and ______a. Used electronic commerce to do so b. Created brand marks and identities c. Diminished the growth of wholesalers d. Inhibited the growth of retail chains markers
Answer:
b. Created brand marks and identities
Explanation:
Before industrialization, usual commodities (FMCG - fast moving consumer goods) were unmarked and not connected to a specific brand or image. Sugar was simply referred to as sugar for example, and the same applied to similar products.
Afterward, the notion of brand and brand identity emerged and products became differentiated by brand and company. People started to think and ask questions before buying: "Which brand of sugar should I buy?". The brand usually reflects the consumer's status, social position and preferences.
Final answer:
By helping communicate about brands, advertising in the era of industrialization made previously unmarked commodities into differentiated product offerings and created brand marks and identities. option B
Explanation:
By helping communicate about brands, advertising in the era of industrialization made previously unmarked commodities into differentiated product offerings and created brand marks and identities. This branding evolution was a response to the challenges faced by companies as they grew into national businesses.
Prior to the advent of strong brand identities, regional business expansion by salesmen could lead to inconsistent product quality and pricing, even to the extent of unethical practices like diluting products for personal profit.
The development of national brands offering consistent quality, such as Coca-Cola and Quaker Oats, became essential to corporate reputation and success. As the advertising industry grew, so did the methods of reaching customers. With expanded trade and mass production, businesses vied for consumer attention among a wide array of products.
This led to increased spending in advertising and innovations such as full-page newspaper ads and professional advertising agencies. Moreover, the importance of advertising was reinforced with the rise of print media and the development of television, both of which focused on creating visual connections with consumers through graphic images and recognizable brand logos.
Andy "Nard Dog" Bernard graduated from Cornell in May of 2018 with a BA in Women's Studies. As a graduation gift, Nard Dog's father, a widower, gave him an old Toyota Prius because, according to the father, "the Ferarri is more your brother's style and the old Prius reminds me of you." The Prius was originally purchased 8 years ago for $33,000 and today it is worth $16,000.
1. How much of the gift is subject to the gift tax?
2. If Andy's father sold the Prius for $16,000 and then gave Andy the proceeds from the sale, how much of the gift would be subject to federal gift taxes?
3. If Andy's father sold the Prius for $16,000 and then gave the proceeds from the sale to Cornell to pay for Andy's graduate school tuition, how much of the gift would be subject to federal gift taxes?
Solution:
1. Amount of gift subject to gift tax is only $ 1,000.
In 2018, the gift tax exclusion limit is $ 15,000. Hence, only the amount over and above $ 15,000 is subject to gift tax and IRS form 109 to be filled.
Here, the fair value of car is considered as the worth of gift.
So, taxable amount of gift is $ 16,000 - $ 15,000 = $ 1,000.
2. Amount of gift subject to gift tax = $ 1,000
The gift tax provisions will not change even if Andy's father gifted him a car or in terms of sale proceeds (cash).
Any asset money or money's worth is given to another person where full consideration is not received back is a gift.
3. If Andy's father give sale proceeds to Cornell, Amount of gift subject to federal gift tax = $ 0
Any amount given directly to an educational institution to pay tution fees as a gift is exempt from gift tax.
Here, Andy's father directly give the sale proceeds of $ 16,000 to Cornell as a gift for his further studies, that amount is exempt from gift tax.
The portion of the gift subject to gift tax depends on the value of the gift and the annual exclusion limit. If the gift is below the annual exclusion limit or qualified education expense, no gift taxes would be owed.
Explanation:1. The gift tax applies to the portion of the gift that exceeds the annual gift tax exclusion limit. For 2018, the annual exclusion limit is $15,000 per recipient. Since the value of the Prius is $16,000, only $1,000 would be subject to gift tax.
2. If Andy's father sold the Prius for $16,000 and then gave him the proceeds, the gift would still be $16,000. However, since it is below the annual exclusion limit, no federal gift taxes would be owed.
3. If Andy's father sold the Prius for $16,000 and then gave the proceeds to Cornell for Andy's graduate school tuition, the gift would still be $16,000. However, since it is a qualified education expense, it would not be subject to federal gift taxes.
he demand for labor is L = 4000minus300w, where L is the number of workers demanded and w is the hourly wage rate. The supply of labor is L = 200w. The equilibrium wage rate in this market is $ 8, and the equilibrium quantity of labor is 1600 workers. (Enter your responses as integers.) A minimum wage law is passed that sets the minimum wage at $9 per hour. As a result, 1300 workers are demanded and 1800 workers are supplied, so unemployment is 500workers. (Enter your responses as integers.) Do all workers benefit from the minimum wage law? No, because not everyone can find work at the higher wage. Which group of workers will have the least difficulty finding work at the minimum wage? A. Highly educated workers. Your answer is correct.B. Low skilled workers. C. Young and inexperienced workers. D. All of the above. The deadweight loss from the minimu
Answer:
Please find the detailed answer as follows:
Explanation:
The deadweight loss for the given information is = 1/2*2.5*300 = $375
The supply of labor of 1800 will have wage rate 1300 = 200*w
or w = 1300/200 = $6.5
Then the area of shaded portion in the figure or the deadweight loss will be 1/2*base(9-6.5) *altitude (1600-1300).
The establishment of a minimum wage leads to unemployment among workers and deadweight loss in the labor market, with highly educated workers facing the least difficulty in finding employment.
Explanation:The introduction of a minimum wage law sets the price of labor above the equilibrium, causing the quantity demanded by employers to fall and the quantity supplied by workers to rise, resulting in unemployment. At a minimum wage of $9, 1300 workers are demanded while 1800 are supplied, creating unemployment of 500 workers. Not all workers benefit from the minimum wage law; in fact, it often leads to a surplus of labor where some workers struggle to find employment.
When considering which group of workers will have the least difficulty finding work at the minimum wage, it is typically highly educated workers who fare better due to their qualifications and experience compared to low-skilled or young and inexperienced workers.
The deadweight loss in the labor market arises because the minimum wage creates a gap between the quantity of labor supplied and the quantity demanded, leading to inefficient allocation of resources and potential losses in welfare for both workers and employers.
As a manager of a chain of movie theaters that are monopolies in their respective markets, you have noticed much higher demand on weekends than during the week. You therefore conducted a study that has revealed two different demand curves at your movie theaters. On weekends, the inverse demand function is P = 20 – 0.001Q; on weekdays, it is P = 15 – 0.002Q. You acquire legal rights from movie producers to show their films at a cost of $25,000 per movie, plus a $2.50 "royalty" for each moviegoer entering your theaters (the average moviegoer in your market watches a movie only once).
a) What price should you charge on weekends?
b) What price should you charge on weekdays?
Answer:
11.25; 8.75
Explanation:
On weekends,
Inverse demand function: P = 20 – 0.001Q
On weekdays,
Inverse demand function: P = 15 – 0.002Q
Let quantity demanded tickets on weekend be Q1 and quantity demanded tickets on weekday be Q2,
Profit function:
= [(20 - 0.001Q1) × Q1] + [(15 - 0.002Q2) × Q2] - [25,000 + 2.5(Q1 + Q2)]
For maximizing profit, Differentiating profit w.r.t Q1 and Q2,
⇒ (20 - 0.002Q1) - 2.5 = 0
⇒ (15 - 0.004Q2) - 2.5 = 0
Hence, solving for Q1 and Q2, we get
Q1 = 8,750
Q2 = 3,125
Therefore,
Price during weekends: P = 20 - (0.001 × 8,750)
= 11.25
Price during weekdays: P = 15 - (0.002 × 3,125)
= 8.75
the risk that a portfolio's return will underperform the benchmark return is called the ____.
Answer:
tracking error
Explanation:
As per the subject matter of finance, tracking error refers to the risk metric in a stock portfolio related to the portfolio administrator's actively managed funds choices; it shows how strongly a portfolio matches the standard to which it is thoroughly tested.
The most common indicator is perhaps the standard deviation of the portfolio-index return gap.Tracking error relates to the measure of the divergence from the baseline. Tracking error will not take into account risk (return) which is just a market activity feature.
Choose the ideal cost of quality breakdown from the following options.
a. Prevention 15%, Appraisal 35%, Failure 50%
b. Prevention 5%, Appraisal 45%, Failure 50%
c. Prevention 50%, Appraisal 35%, Failure 15%
d. Prevention 25%, Appraisal 50%, Failure 25%
Answer:
The correct option is c.
Prevention 50%, Appraisal 35%, Failure 15%
Explanation:
A quality breakdown should have higher percentage of prevention, follow by Appraisal ,then small percentage of failures due to unforseen occurrences.
Answer:
Options A and B both represent ideal cost of quality (CoQ) breakdowns.
Explanation:
In trying to determine the financial benefit of quality in an organization, certain models can be adopted. One such model is the PAF model.
The PAF model tracks the resources spent in ensuring quality by preventing the occurrence of bad quality, appraising the products and processes and the internal and external costs of failure. It accounts for all of the activities that any typical company would perform in the name of providing good products or services to customers.
Prevention refers to costs associated with preventing a quality problem from occurring in the first place. Typical costs that are included in this category are; training, procedure writing, ISO related costs, and process or equipment automation.
Appraisal refers to any activity aimed at inspecting the quality of the product or service including calibration, instrumentation, and inspection and test personnel.
Internal Failure are those costs associated with recognizing a poor quality characteristic exists BEFORE the product leaves the factory. The most common cost in this category is scrap, followed closely by rework costs.
External failure is failure of a product or service at the delivery point or usage point of the customer. At this point, the product is fully burdened with cost, including transportation and storage costs. Reputation is impacted here too.
[tex]CoQ = Prevention + Appraisal + Failure[/tex]
The point where the sum of Prevention and Appraisal cost is equal to the Failure cost is referred to as minimal or ideal Cost of Quality point.
[tex]Prevention + Appraisal = Failure[/tex]
Clearly, in option A, [tex]15%+ 35% = 50%[/tex]
and in option B, [tex]5% + 45% = 50%[/tex].
The equilibrium price of peanut butter is $5. A study comes out that says the fat in peanut buffer is good for your heart. Holding all other factors constant, which of the following scenarios could happen?
a. The price of peanut butter increases to $7 because of a supply shift.
b. The price of peanut butter decreases to $4 because of a supply shift.
c. The price of peanut butter decreases to $4 because of a demand shift.
d. The price of peanut butter increases to $7 because of a demand shift.
e. The price of peanut butter increases to $7 because of a demand AND a supply shift.
Answer:
The equilibrium price of peanut butter is $5. A study comes out that says the fat in peanut buffer is good for your heart. Holding all other factors constant, which of the following scenarios could happen?
The price of peanut butter increases to $7 because of a demand AND a supply shift
Explanation:
As a result of price increment, there would be a shift in the demand and supply. the increase in demand as a result of health importance would directly cause an increase in supply for the increase in demand to be met.
If a study comes out claiming that the fat in peanut butter is good for your heart, the demand for peanut butter would increase, leading to a higher price and quantity of peanut butter.
Explanation:In this scenario, the equilibrium price of peanut butter is $5. If a study comes out that says the fat in peanut butter is good for your heart, it would likely increase the demand for peanut butter. This would result in an increase in both the price and quantity of peanut butter, as the demand curve shifts to the right.
So, the correct answer is d. The price of peanut butter increases to $7 because of a demand shift.
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In the aggregate expenditures model if aggregate expenditures equal 800 billion and real GDP equals 600 there is a_________________
A. investment equals –$200 billion.
B. unplanned inventory accumulation equals $200 billion.
C. consumption plus investment equals $200 billion
Answer:
unplanned inventory accumulation equals -$200 billion.
Explanation:
As we know that
Unplanned inventory equals to
= Real GDP - aggregate expenditures
= 600 billion - 800 billion
= -$200 billion
It shows a difference between the real GDP and the aggregate expenditure
Since the real GDP is less than the aggregate expenditure, so the unplanned inventory should come in negative amount else it comes in a positive amount
You bought a stock one year ago for $ 50.00 per share and sold it today for $ 55.00 per share. It paid a $ 1.00 per share dividend today.
a.What was your realized return?
b. How much of the return came from dividend yield and how much came from capital gain?
Answer:
a. 12%
b. 2% and 10%
Explanation:
a. The computation of the realized return is shown below:
= {(Ending share price - initial price) + Dividend} ÷ (Initial price) × 100
= {$1 + ($55 - $50)} ÷ $50
= 12%
b. The computation of the dividend yield and the capital gain is shown below:
Dividend yield
= (Dividend) ÷ (initial price) × 100
= $1 ÷ $50 × 100
= 2%
For capital gain yield:
= (Ending share price - initial price) ÷ (Initial price) × 100
= ($55 - $50) ÷ ($50) × 100
= $5 ÷ $50 × 100
= 10%
A portfolio has 30% of its value in IBM shares and the rest in Microsoft (MSFT). The volatility of IBM and MSFT are 35% and 30%, respectively, and the correlation between IBM and MSFT is 0.5. What is the standard deviation of the portfolio excel?
The portfolio's standard deviation is calculated using a designated formula that incorporates the weights of the stocks in the portfolio, their individual volatilities, and their correlation. Substituting the given values into this formula will provide the standard deviation.
Explanation:To find the standard deviation of the portfolio, we first need to consider the weights of each stock in the portfolio and their respective volatilities. The weight of IBM (x) is 30% and Microsoft (y) is 70%. The volatilities, or measures of risk, for IBM and Microsoft are 35% and 30% respectively. The correlation between IBM and Microsoft, which measures how the two stocks move in relation to each other, is given as 0.5.
Given these values, we can use the portfolio standard deviation formula, which is represented as:
σp = sqrt[(x^2)*(σ1^2) + (y^2)*(σ2^2) + 2*x*y*corr(1,2)*σ1*σ2]
where σp is the portfolio standard deviation, x and y are the weights, σ1 and σ2 are the standard deviations (volatilities) of the two stocks, and corr(1,2) is the correlation between the two stocks.
You need to plug the given values for the weights, volatilities and correlation into the formula. Remember, when computing the result, the volatility values should be expressed in decimal form, i.e., 35% would be 0.35.
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Grace owns a house. She can rent her house for two years to one tenant for a profit of $24,000 a year, or she can rent it to two tenants each year for a profit of $10,000 per tenant per year. Calculate the economic rent over the course of two years of renting to one tenant.
Answer:
The economic rent will be $8,000
Explanation:
The formula to compute the economic rent renting to 1 tenant is as:
Economic rent = Marginal Product - Opportunity Cost
where
Marginal cost would be for two years $24,000 × 2
= $48,000
Opportunity cost would be renting to 2 tenant per year
= $10,000 × 2 year × 2 person
= $40,000
Putting the values above:
= $48,000 - $40,000
= $8,000
Augi is the hottest new pop singer, but her agent discovers that Internet sales of Augi's music have been poor due to Internet piracy. However, concerts are regularly sold out and merchandise (such as T-shirts) sells well. If Augi wants to enhance profits, economists would most likely recommend that she:
Answer:
The correct answer is letter "C": keep prices of downloads low and raise prices for concerts and merchandise.
Explanation:
To maximize profits, Augi's agent should not stop doing any of the commercial activities the pop singer has been carrying out. However, a way to deal with Augi's music internet piracy, the agent could lower the online-song prices but the "losses" can be compensated by raising the concert ticket prices and the singer's merchandise sold there since most of Augi's concerts are sold-outs.
On December 1, Williams Company borrowed $45,000 cash from Second National Bank by signing a 90-day, 9% note payable. a. Prepare Williams' journal entry to record the issuance of the note payable. b. Prepare Williams' journal entry to record the accrued interest due at December 31. c. Prepare Williams' journal entry to record the payment of the note on March 1 of the next year.
Answer:
Explanation:
The journal entries are shown below:
a. Cash A/c Dr $45,000
To Notes payable A/c $45,000
(Being note is issued for cash)
b. Interest expense A/c Dr $333
To Interest payable A/c $333
(Being accrued interest adjusted)
The computation is shown below:
= Principal × rate of interest × number of days ÷ (total number of days in a year)
= $45,000 × 9% × (30 days ÷ 365 days)
= $333
The 30 days is calculated from December 1 to December 31
(C) Interest expense A/c Dr $665.75
Interest payable A/c Dr $333
Notes payable A/c Dr $45,000
To Cash A/c $45,998.75
(Being cash is paid on maturity)
The computation is shown below:
= Principal × rate of interest × number of days ÷ (total number of days in a year)
= $45,000× 9% × (60 days ÷ 365 days)
= $665.75
From January 1 to March 1 it would be 60 days
We assume 365 days a year.
Joe's income is $500, the price of food (F, y-axis) is $2 per unit, and the price of shelter (S, x-axis)is $100. Which of the following represents his budget constraint?
A. 500 = 2F + 100S
B. F = 250 - 50S
C. S = 5 - .02F
D. All of the above.
Answer:
D. All of the above.
Explanation:
We can model his budget constraint by the following first order function.
2F + 100S = 500
In which F is the number of food items that he buys and S is the number of shelters that he pays.
So A. is correct.
If we want to write this equation with F as a function of S, it is also possible:
2F + 100S = 500
2F = 500 - 100S
F = 250 - 50s
So B. is also correct
Writing with S as function of F
2F + 100S = 500
100S = 500 - 2F
S = 5 - 0.02F
So C. is also correct
The correct answer is:
D. All of the above.
Final answer:
Joe's budget constraint, given his income and prices for food and shelter, is correctly represented by equation A. 500 = 2F + 100S, which indicates the combinations of food and shelter he can afford. However, B and C are simply different expressions of A, so the correct answer is D. All of the above.
Explanation:
The correct representation of Joe's budget constraint, given his income and the prices of food and shelter, is A. 500 = 2F + 100S. This equation describes the combinations of food (F) and shelter (S) that Joe can afford. The right-hand side of the equation (2F + 100S) represents total expenditures on food and shelter, with F being the quantity of food at $2 per unit and S being the quantity of shelter at $100 per unit. The left-hand side of the equation represents Joe's total income, which must be equal to his total expenditures if he spends his entire budget.
Choices B and C offer different mathematical expressions, but they are transformations of the original budget constraint and essentially convey the same physical constraint, just in terms of solving for one variable or the other. Therefore, the correct answer is D. All of the above. Each of these equations represents the same trade-offs between F and S that Joe can make, staying within his budget.
Hancock Inc. retains most of its earnings. The company currently has earnings per share of $11. Hancock expects its earnings to grow at a constant rate of 2 percent per year. Furthermore, the average PE ratio of all other firms in Hancock's industry is 12. Hancock is expected to pay dividends per share of $3.50 during each of the next three years. If investors require a 10 percent rate of return on Hancock stock, a fair price for Hancock stock today is ___A) 113.95
B) 111.32
C) 131.49
D) none of the above
Answer:
D1 = $3.50
D2 = $3.50
D3 = $3.50
Ke = 10% = 0.1
Po = D1 + D2 + D3
(1+ke) (1+ke)2 (1+ke)3
Po = $3.50 + $3.50 + $3.50
(1+0.1) (1+0.1)2 (1+0.1)3
Po = $3.18 + $2.89 + $2.63
Po = $8.70
None of the above
Explanation:
In this scenario, we need to discount the dividend in each year by the required at rate of return of 10%. The aggregate of the price obtained as a result of discounting in year 1 to year 3 gives the current market price.
The Fed has decided to expand the money supply, leading to lower interest rates. As a partner in a tech start-up, you react to these lower interest rates by deciding to expand your operations and begin marketing your new artificial intelligence prototype. What impacts would this decision have on the macroeconomy? Choose one or more: A. reducing unemployment B. raising GDP C. decreasing aggregate demand D. increasing the investment part of GDP E. increase net imports
Answer:
A, B and D
Explanation:
Expanding the money supply is an exercise of expansionary monetary policy.
This decision will first allow our tech startup to acquire cheaper loans and expand our operations, this expansion in operations will result in new employment opportunities and hence as a result, unemployment will be reduced assuming this is a general trend in the economy.
This decision also directly reflects an increased investment and hence the GDP on the whole and the investment part of GDP would both increase,
GDP = C + I + G + (X - M), where I = investment.
This change in macro economy will increase aggregate demand due to expansionary effects. Increase in imports is not conclusive as it may or may not happen depending upon the demand state.
Hope this helps.
Which of the following statements about the consumers’ responses to rising gasoline prices is correct?
a.About 10 percent of the long-run reduction in quantity demanded arises because people drive less and about 90 percent arises because they switch to more fuel-efficient cars.
b.About 90 percent of the long-run reduction in quantity demanded arises because people drive less and about 10 percent arises because they switch to more fuel-efficient cars
.c.About half of the long-run reduction in quantity demanded arises because people drive less and about half arises because they switch to more fuel-efficient cars.
d.Because gasoline is a necessity, consumers do not decrease their quantity demanded in either the short run or the long run
Answer:
c.About half of the long-run reduction in quantity demanded arises because people drive less and about half arises because they switch to more fuel-efficient cars.
Explanation:
In a long run, The demand is more elastic than in a short run, this is because the consumers have both more time and number of substitutes to switch to. So almost 50% of long-run decrease in quantity demanded is due to less driving by people, while rest 50% is due to people switching to more fuel-efficient cars.
Ginger, Inc., has declared a $5.70 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 20 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid.
The company's stock sells for $94.15 per share, and the stock is about to go ex dividend. What do you think the ex-dividend price will be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
$89.59
Explanation:
The computation of the ex-dividend price would be
= Sale price of the stock - after-tax dividend
where,
The sale price of the stock would be $94.15
And, the after-tax dividend would be
= Dividend per share × (1 - tax rate)
= $5.70 × (1 - 0.20)
= $5.70 × 0.80
= $4.56
Now put these values to the above formula
So, the value would equal to
= $94.15 - $4.56
= $89.59
The ex-dividend price of Ginger, Inc. would be $89.59 per share after accounting for a 20% tax on its declared $5.70 dividend. This price represents the stock's value after the dividend's after-tax amount has been subtracted from its current price.
Explanation:The question involves the concept of an ex-dividend price, which is the price that a stock typically drops to after a dividend is paid out. In this scenario, Ginger, Inc. has declared a $5.70 per share dividend. Since capital gains are not taxed but dividends are taxed at a rate of 20%, investors will receive only $5.70 - ($5.70 × 0.20) = $4.56 per share after taxes. To find the ex-dividend price, we subtract this after-tax dividend from the stock's current price of $94.15. Therefore, the ex-dividend price would be $94.15 - $4.56 = $89.59.
To illustrate further, consider a scenario where an investor buys a share for $100 with an expectation of a $6.00 dividend. If the stock price rises to $105 and they sell, they receive a capital gain in addition to the dividend. Similarly, if they bought a share of Wal-Mart for $45 and sold it for $60, the $15 profit is also a capital gain. Whether it's an increase in stock value or receiving dividends, both contribute to the investor's rate of return.