Answers _ Mathematics and Statistics for Financial Risk Management

pdf

School

University of Texas, Dallas *

*We aren’t endorsed by this school

Course

6307

Subject

Finance

Date

Jan 9, 2024

Type

pdf

Pages

40

Uploaded by JohnnyH2024

Report
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 1/40 Answers CHAPTER 1 1. a. y = 5 a. y = ln(1) – ln( e ) = 0 – 1 = –1 b. y = ln(10) + ln( e ) = ln(10) + 1 = 3.3026 2. Annual rate = 5.12%; semiannual rate = 5.05%; continuous rate = 4.99%. 3. 4. 5. 6. 7. 8. ln(ln(10)) = 0.8340.
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 2/40 9. 10. 11. The bond will pay 10 coupons of $2, starting in a year's time. In addi- tion, the notional value of the bond will be returned with the final coupon payment in 10 years. The present value, V, is then: We start by evaluating the summation, using a discount factor of δ = 1/1.05 ≈ 0.95: Inserting this result into the initial equation we obtain our final result: Note that the present value of the bond, $78.83, is less than the notional value of the bond, $100. This is what we would expect, given that there is no risk of default, and the coupon rate is less than the discount rate. CHAPTER 2
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 3/40 1. Probability that both generate positive returns = 60% × 70% = 42%. Probability that both funds lose money = (1 – 60%) × (1 – 70%) = 40% × 30% = 12%. 2. 88%. The sum of all three events—upgrade, downgrade, and no change —must sum to one. There is no other possible outcome. 88% + 8% + 4% = 100%. 3. 50%. The outcomes are mutually exclusive; therefore, 20% + 30% = 50%. 4. 5. 6. 32.14%. By applying Bayes’ theorem, we can calculate the result: Even though the model is 90% accurate, 95% of the bonds don't default and it predicts that 10% of them will. Within the bond portfolio, the mod- el identifies 9.5% of the bonds as likely to default, even though they won’t. Of the 5% of bonds that actually default, the model correctly identifies 90%, or 4.5% of the portfolio. This 4.5% correctly identified is over- whelmed by the 9.5% incorrectly identified.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 4/40 7. Given the density function, we can find c by noting that the sum of probabilities must be equal to one: 8. First we check that this is a valid CDF, by calculating the value of the CDF for the minimum and maximum values of x : Next we calculate the PDF by taking the first derivative of the CDF: 9. We first calculate the CDF by integrating the PDF:
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 5/40 We first try to find c using the fact that the CDF is zero at the minimum value of x , x = 0. As it turns out, any value of c will satisfy this constraint, and we cannot use this to determine c . If we use the fact that the CDF is 1 for the maximum value of x , x = e , we find that c = 1: The CDF can then be expressed simply as: 10. P (both bonds default) = 9%. P (one defaults) = 42%. P (neither defaults) = 49%. 11. We can start by summing across the first row to get W : In a similar fashion, we can find X by summing across the second row: To calculate Y , we can sum down the first column, using our previously calculated value for W : Using this result, we can sum across the third row to get Z :
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 6/40 The completed probability matrix is: The last part of the question asks us to find the conditional probability, which we can express as: We can solve this by taking values from the completed probability matrix. The equity underperforms in 40% of scenarios. The equity underper- forms and the bonds are downgraded in 15% of scenarios. Dividing, we get our final answer, 37.5%. 12. The probability that a B-rated bond defaults over one year is 2%. This can be read directly from the last column of the second row of the ratings transition matrix. The probability of default over two years is 4.8%. During the first year, a B-rated bond can either be upgraded to an A rating, stay at B, be down- graded to C, or default. From the transition matrix, we know that the probability of these events is 10%, 80%, 8%, and 2%, respectively. If the bond is upgraded to A, then there is zero probability of default in the sec- ond year (the last column of the first row of the matrix is 0%). If it re-
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 7/40 mains at B there is a 2% probability of default in the second year, the same as in the first year. If it is downgraded to C, there is a 15% probabili- ty of default in the second year. Finally if a bond defaulted in the first year it stays defaulted (the last column of the last row is 100%). Putting this all together we have: CHAPTER 3 1. Mean = 6.43%; median = 5%. 2. Mean = 3.00%; standard deviation = 6.84%. 3. 4. Using the results of Question 3, we first calculate the variance of the es- timator of the mean: where σ is the standard deviation of r . For the last step we rely on the fact that, because the data points are i.i.d., the covariance between different data points is zero. We obtain the final answer by taking the square root of the variance of the estimator:
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 8/40 5. Covariance = 4.87%; correlation = 82.40%. 6. Series #1: Mean = 0, standard deviation = 39, skewness = 0. Series #2: Mean = 0, standard deviation = 39, skewness = –0.626. 7. Series #1: Mean = 0, standard deviation = 17, kurtosis = 1.690. Series #2: Mean = 0, standard deviation = 17, kurtosis = 1. 8. The variance is approximately 5.56. From a previous example we know the mean to be 20/3; thus the variance can be found as: 9. We start by expanding the mean: By carefully rearranging terms, we are left with: Assuming that all the different values of X are uncorrelated with each other, we can use the following two relationships: Then:
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 9/40 10. First we note that the expected value of X A plus X B is just the sum of the means: Substituting into our equation for variance, and rearranging, we get: Expanding the squared term and solving: Using our definition of covariance we arrive at our final answer: 11. If the bond does not default, you will receive $100. If the bond does default, you will receive 40% × $100 = $40. The future value, the expected value of the bond at the end of the year, is then $94: The present value of the bond is approximately $89.42: CHAPTER 4
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 10/40 1. The number of times XYZ Corporation exceeds consensus estimates fol- lows a binomial distribution; therefore: 2. The cumulative number of exceedance events follows a binomial distri- bution; therefore: 3. Because the annual returns of both funds are normally distributed, the difference in their returns is also normally distributed: The mean of this distribution is 10%, and the standard deviation is 50%. At the end of the year, the difference in the expected returns is 92%. This is 82% above the mean, or 1.64 standard deviations. Using Excel or con- sulting the table of confidence levels in the chapter, we see that this is a rare event. The probability of more than a 1.64 standard deviation event is only 5%. 4. The average number of defaults over five months is 10; therefore: 5. If the returns of the fund are normally distributed with a mean of 10% and a standard deviation of 15%, then the returns of $200 million invest- ed in the fund are also normally distributed, but with an expected return of $20 and a standard deviation of $30. A loss of $18.4 million represents a –1.28 standard deviation move:
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 11/40 This is a one-tailed problem. By consulting the table of confidence inter- vals or using a spreadsheet, we determine that just 10% of the normal dis- tribution lies below –1.28 standard deviations. 6. The return of –30% is approximately a –1.64 standard deviation event: According to the table of confidence intervals, 5% of the normal distribu- tion lies below –1.64 standard deviations. The probability of a return less than –30% is then 5%. 7. For the mean: From a previous example, we know that c = 1/( x 2 – x 1 ); therefore: For the variance: Substituting in for c and μ from above: For the final step, we need to know that:
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 12/40 Substituting in and solving, we have: 8. Using integration by substitution, define a new variable y and solve: 9. Using the same substitution as in the previous question: 10. Using the same substitution as before: For the final step we need to know that:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 13/40 Using this result, we achieve the desired result: 11. First we note that the mean of X A is zero: Similarly, the mean of X B is zero. Next, we want to calculate the variance. In order to do that, it will be use- ful to know two relationships. First we rearrange the equation for vari- ance, Equation 3.20 , to get: Similarly, we can rearrange our equation for covariance, Equation 3.26 , to get: With these results in hand, we now show that the variance of X A is one: Next we calculate the covariance of X A and X B :
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 14/40 Putting the last two results together completes the proof: 12. For the portfolio consisting of 50% A and 50% B , we can proceed two ways. The PDF of the portfolio is a triangle, from –0.5 to +0.5, with height of 2.0 at 0. We can argue that the mean is zero based on geometric argu- ments. Also, because both distributions are just standard uniform vari- ables shifted by a constant, they must have variance of 1/12; 50% of each asset would have a variance of ¼ this amount, and—only because the variables are independent—we can add the variance of the variable, giv- ing us: Alternatively, we could calculate the mean and variance by integration:
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 15/40 This confirms our earlier answer. For the 50/50 mixture distribution, the PDF is bimodal and symmetrical around zero, giving a mean of zero: For the variance we have: Notice that, while the mean is the same, the variance for the mixture dis- tribution is significantly higher. CHAPTER 5 1. Mean = 45.0; standard deviation = 29.3; standard deviation of mean = 9.3. For the hypothesis that the mean is greater than 40, the appropriate t - statistic has a value of 0.54. For a one-sided t -test with 9 degrees of free- dom, the associated probability is 70%. There is a 30% chance that the true mean is found below 40, and a 70% chance that it is greater than 40. 2. The mean is 6.9%, and the standard deviation of the returns is 23.5%, giving a standard deviation of the mean of 7.4%. The t -statistic is 0.93. With 9 degrees of freedom, a one-sided t -test produces a probability of 81%. In other words, even though the sample mean is positive, there is a 19% chance that the true mean is negative. 3. A negative return would be greater than 2 standard deviations. For a normal distribution, the probability (one-tailed) is approximately 2.28%. If we do not know the distribution, then, by Chebyshev's inequality, the
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 16/40 probability of a negative return could be as high as 12.5% = ½ × 1/(2 2 ). There could be a 25% probability of a +/–2 standard deviation event, but we're interested only in the negative tail, so we multiply by ½. We can only perform this last step because we were told the distribution was symmetrical. 4. The expected return is +10%. The 95% VaR is 35% (i.e., 5% of the re- turns are expected to be worse than –35%). The expected shortfall is 37.5% (again the negative is implied). 5. For a normal distribution, 5% of the weight is less than –1.64 standard deviations from the mean. The 95% VaR can be found as: 0.40% – 1.64 · 2.30% = –3.38%. Because our quoting convention for VaR, the final answer is VaR = 3.38%. 6. We can use Equation 5.4 to calculate the expected variance of the sam- ple variances. Because we are told the underlying distribution is normal, the excess kurtosis can be assumed to equal zero and n = 33; therefore: The standard deviation of the sample variances is then 4.0%. 7. An appropriate null hypothesis would be: H 0 : σ = 40%. The appropriate test statistic is: Using a spreadsheet, or other program, we calculate the corresponding probability for a chi-squared distribution with 32 degrees of freedom. Only 2.23% of the distribution is greater than 50. At a 95% confidence lev- el, we would reject the null hypothesis. 8. Answer: 12.5%. This is a –2 standard deviation event. According to Chebyshev's inequality, the probability of being more than 2 standard de-
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 17/40 viations from the mean is less than or equal to 25%. Because the distribution of returns is symmetrical, we assume that half of these extreme events are greater than +2 standard deviations, and half are less than –2 standard deviations. This leads to the final result, of 12.5%. 9. The standard deviation of the mean is 2%: This makes the difference between the average fund return and the benchmark, 18% – 14% = 4%, a +2 standard deviation event. For a t distri- bution with 35 degrees of freedom, the probability of being more than +2 standard deviations is just 2.67%. We can reject the null hypothesis, H 0 : μ = 14% at the 95% confidence level. The difference between the average return and the benchmark return is statistically significant. 10. To find the 95% VaR, we need to find v , such that: Solving, we have: The VaR is a loss of 90. Alternatively, we could have used geometric argu- ments to arrive at the same conclusion. In this problem, the PDF de-
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 18/40 scribes a rectangle whose base is 200 units and whose height is 1/200. As required, the total area under the PDF, base multiplied by height, is equal to one. The leftmost fraction of the rectangle, from –100 to –90, is also a rectangle, with a base of 10 units and the same height, giving an area of 1/20, or 5% of the total area. The edge of this area is our VaR, as found by integration before. 11. In the previous question we found that the VaR, v , was equal to –90. To find the expected shortfall, we need to solve the following equation: Solving, we find: The final answer, a loss of 95 for the expected shortfall, makes sense. The PDF in this problem is a uniform distribution, with a minimum at –100. Because it is a uniform distribution, all losses between the (negative) VaR, –90, and the minimum, –100, are equally likely; therefore, the average loss, given a VaR exceedance, is halfway between –90 and –100. 12. To find the 95% VaR, we need to find v , such that: By inspection, half the distribution is below 5, so we need only bother with the first half of the function:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 19/40 We can use the solution to the quadratic equation: Because the distribution is not defined for π < –15, we can ignore the neg- ative, giving us the final answer: The one-day 95% VaR for Pyramid Asset Management is approximately 8.68. CHAPTER 6 1. 2. For the first part of the question, because matrix addition is commuta- tive and associative, the order in which we perform the operations does not matter:
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 20/40 3. 4. 5. A matrix multiplied by an appropriately sized identity matrix is itself. This is true when the identity matrix is multiplied by itself, too. For U 2 : For AU :
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 21/40 6. To prove that J is the inverse of K , we need to show that the two matri- ces multiplied together produce an identity matrix. 7. To solve this problem we could multiply M by itself five times. Alternatively, we can reexpress M as the product of a constant and an identity matrix: 8. At the end of the year, it is expected that 61% of the bonds will have an A rating, 36.4% B, 2.2% C, and 0.4% D. To get the answer, we can proceed one rating at a time. Of the 60% of bonds that are rated A at the start of the year, we expect 95% will still be rated A at the end of the year. Of the 40% of bonds that are rated B at the start of the year, we expect 10% to have been upgraded to A by the end of the year. Putting the two together, we have: We can calculate the other three ratings similarly: We can check our answer by noting that the sum of the answers is 100%. At the end of the year each bond must be either A, B, C, or D; therefore, the sum of the expected values must be 100%.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 22/40 9. To calculate the two-year transition matrix, we simply square the one- year matrix. Using T 1 and T 2 to denote our one-year and two-year matri- ces, respectively, we have: Though not necessary, we can reformat this to match the original one- year matrix: 10. We can use our Cholesky algorithm to find the elements of the matrix: We can express the full lower triangular matrix as:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 23/40 We can verify this answer by noting that LL ′ is indeed equal to our origi- nal covariance matrix, Σ . CHAPTER 7 1. Vectors a and b are not orthogonal, but b and c are orthogonal. We know this from their inner products, which we can calculate as follows: 2. In order for A to be an orthonormal basis, we require that the column vectors are orthogonal and have a magnitude of one. For the two column vectors to be orthogonal, we require that their inner product is zero: We next check that the column vectors have a magnitude of one:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 24/40 Both vectors are normal; therefore, the solution: makes A an orthonormal basis. 3. In order for B to be an orthonormal basis, we require that the column vectors are orthogonal and have a magnitude of one. For the two column vectors to be orthogonal, we require that their inner product is zero: Using the fact that the magnitude of the first column vector must be one: Substituting in our previous result: Both the positive and negative root are legitimate solutions. There are ac- tually two possible final answers.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 25/40 4. Because B is an orthonormal basis, we can find the coordinate vector for x : 5. A coordinate vector, c , for x should satisfy the following equation: Working through produces three simultaneous equations: By solving and substituting in, we arrive at the final answer: c 1 = 3, c 2 = 1, c 3 = 4. CHAPTER 8 1. The expected return of XYZ is 6.01%: 2. The expected value of r XYZ is 0.07%: The variance of r XYZ is:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 26/40 To get to the last line, we use the fact that the covariance between the re- gressor and the disturbance term is zero in a linear regression, which implies: Taking the square root of the variance, we get a standard deviation of 2.06%. 3. We start by calculating the covariance: The correlation is then: 4. The R 2 is 20%: 5. The corresponding F -statistic is 12:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 27/40 Using a spreadsheet or other program, we see that the probability associ- ated with this F -statistic is 0.11%; that is, there is only a 0.11% chance that an F -statistic of this magnitude (or greater) would have happened by chance. The F -statistic is significant at the 95% confidence level. 6. We compute the adjusted R 2 for each model. The univariate model has two regressors, including the constant. The second has four: On this basis, the original univariate model is slightly better. 7. 30.5%: 8. One possible solution is to drop X 3 from the model: Another possibility, if the spread between X 2 and X 3 is of interest, is: where β 5 is taken from the regression of X 2 on X 3 . Based on the assump- tion of the OLS model, the term in parentheses will be uncorrelated with X 2 . 9. We start by writing the equation for the covariance of X and Y :
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 28/40 Using our linear regression equation and making use of the OLS assump- tions, we see that the second term can be expressed in terms of X , β , and : Substituting this into our covariance equation: All that remains is to divide both sides by the variance of X , and to ex- pand the correlation term: 10. First, we find the optimal value of α , α *: Next, we solve for β :
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 29/40 At this point we substitute in our optimal value of α , α *: CHAPTER 9 1. The models are: a. AR(2) b. AR(1) c. ARMA(2,1) d. Drift-diffusion 2. 3. The expected value of r t is 0.80% the next period, and 0.84% the follow- ing period: To get the two-period-ahead forecast, we can use the previous result:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 30/40 Alternatively, we can substitute the original equation into itself to get r t in terms of r t –2 and r t –3 : 4. The expected log return over one year is 0.0%. The standard deviation of the annual log return is 24%. We can get this result by recognizing the annual return as a collection of i.i.d. variables, and using our square root rule to calculate the standard deviation. More formally, we can construct the annual return series (re- member, log returns are additive): where r 256, t is our 256-day annual return. We can find the expected value as follows: We can then calculate the variance as follows:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 31/40 For each term in the final summation, we can determine the value by not- ing the following: Now we have: The variance of the annual returns is 256 times as great as the variance of the daily returns. To get the standard deviation, we just take the square root of both sides: 5. The expected log return over one year is 25.6%. The standard deviation of the annual log return is 24%. As before, we can get this result by recognizing the annual return as a col- lection of i.i.d. variables, and using our square root rule to calculate the standard deviation. More formally, we can construct the annual return series (remember, log returns are additive):
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 32/40 where r 256, t is our 256-day annual return. We can find the expected value as follows: Using this result, we can then calculate the variance as follows: This is exactly the same as what we had in the previous question. The ad- dition of the drift term does not impact the variance or standard devia- tion. The final result is the same as before: 6. The expected log return over two days is 0.40%. The standard deviation of the two returns is 3.0%. For the case where λ equals –0.50, the mean of the two-day return would be approximately 0.13%, and the standard de- viation would be approximately 1.73%. We start by expressing the original AR(1) equation as an infinite sum of lags of the disturbance term:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 33/40 Constructing the two-period return is fairly straightforward. Paying care- ful attention to the time subscripts, we can group the disturbance terms into one summation: where r 2, t is our two-day return. We can find the expected value as follows: We then proceed to find the variance: The standard deviation of the two-day return is then: 7. The unconditional mean of the model is equal to θ , 4%. If interest rates start out at 6%, then we would expect interest rates to be 5.00%, then 4.50%, and then 4.25% over the next three periods. This result is obtained
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 34/40 by noting that the conditional expectation for the next period's interest rate is, in this case, simply the average of the previous period's rate and the long-term mean of 4%: 8. By iteratively substituting the equation into itself, we see that this process can be written as an infinite moving average: The unconditional mean is 0: Similarly, we can find the unconditional variance. First we note that, be- cause the covariance between different disturbance terms is zero and the expected value of any individual disturbance terms is zero, we have the following: Using this and the fact that the unconditional mean is also zero: 9. Using the results from the previous question, we first derive an expres- sion for the covariance:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 35/40 For the last line we were able to eliminate the first term in the expecta- tions by noting that all the products contained different disturbance terms. From the preceding problem we know that the expected value of these cross products is zero. Because the unconditional variance is the same for both r t and r t – n , finding the correlation is just a matter of divid- ing Var[ r t ]: 10. We start by expressing both r t , and r t –1 as infinite series: Next we find the mean of both series:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 36/40 Because the error terms are uncorrelated, we know that: Using this and the previous results, we calculate the variances and covariance: Finally, the correlation is: 11. To annualize the log return, we simply multiply by the number of months in a year, 12. To get the annualized standard deviation, we multi- ply by the square root of the number of periods. For skewness and kurto- sis, we divide by the square root of 12 and 12, respectively. This gives: mean = 24%; standard deviation = 5.20%; skewness = –0.29; kurtosis = 0.20. CHAPTER 10 1. We need to find h , such that: Solving, we find:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 37/40 Alternatively, the formula for the half-life can be expressed as: 2. We start by computing decay factors and values for x 2 : For the mean, using Equation 10.2 , we have: For the variance, using Equation 10.12 , we have: Finally, we can take the square root of our answer for the variance, to get the standard deviation, 22.48. 3. We start by calculating the following values:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 38/40 We then use Equation 10.2 to calculate our estimates of the mean: mean (no decay) = 0.5236; mean (decay = 0.99) = 0.5263; mean (decay = 0.90) = 0.5486. 4. We start by expanding the table from our answer to question #3: In the last line, we have used our estimate of the mean (no decay) from the previous problem. For the first estimator with no decay factor we can use Equation 3.19 to calculate the variance: For the second and third estimators, we use Equation 10.12 , and our esti- mates of the mean from the previous question:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 39/40 Taking the square root of the variances, we arrive at our final answers: standard deviation (no decay) = 0.2688; standard deviation (decay = 0.99) = 0.2676; standard deviation (decay = 0.90) = 0.2610. 5. The new estimates are 10.10%, 9.82%, and finally 9.78%. These can be found as follows: 6. The half-lives are: 7. The half-life of the EWMA estimator is approximately 11.11 days. A rec- tangular window with 22 days would have the most similar half-life, 11 days. 8. 9. Approximately 19.72%. We first update our estimate of the variance, and then take the square root:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
10/23/23, 1:31 PM Answers | Mathematics and Statistics for Financial Risk Management https://learning.oreilly.com/library/view/mathematics-and-statistics/9781118170625/OEBPS/9781118170625_epub_bm_06.htm#ans-exs-0009 40/40 10. Approximately 10.25%. We can use our updating rule: to calculate successive estimates of the variance. The estimate of the stan- dard deviation is just the square root of the variance estimator:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help

Related Documents

33333333.docx
Screenshot 2023-12-17 at 4.35.22 PM.png
Screenshot 2023-12-17 at 4.35.30 PM.png
mod 5 fin 250.docx
Screenshot 2023-12-17 at 4.35.40 PM.png
Discussion 5.docx
BUS-317 TOPIC 2 DQ 1 .docx
FIN 6307 HW 4.docx
T4Q1.jpeg
2-2 Journal.docx
CJ 230 Project Three .docx
Chapter 14 Takehome Problems.xlsx
Related Questions
Could someone please do 3 through 8
E Chapter 5 Homework - FINANCIA X O NWP Assessment Player UI Appli X b Answered: The accountant of Lati x M Inbox - dhyani11141999@gmail. X b My Questions | bartleby + i assessment.education.wiley.com/was/ui/v2/assessment-player/index.html?launchld=1d52287e-dfd8-4d2a-80c9-4cbf51a01297#/question/5 E Chapter 5 Homework Question 6 of 6 > -/ 1 View Policies Current Attempt in Progress The comparative balance sheets of Constantine Cavamanlis Inc. at the beginning and the end of the year 2020 are as follows. CONSTANTINE CAVAMANLIS INC. BALANCE SHEETS Dec. 31, 2020 Jan. 1, 2020 Inc./Dec. Assets Cash $ 45,000 $ 13,000 $32,000 Inc. Accounts receivable 91,000 88,000 3,000 Inc. Equipment 39,000 22,000 17,000 Inc. Less: Accumulated Depreciation-Equipment 17,000 11,000 6,000 Inc. Total $158,000 $112,000 Liabilities and Stockholders' Equity, Accounts payable $ 20,000 $ 15,000 5,000 Inc. Common stock 100,000 80,000 20,000 Inc. Retained earnings 38,000 17,000 21,000 Inc. Total $158,000 $112,000 Net…
E Chapter 5 Homework - FINANCIA X O NWP Assessment Player UI Appli X b Answered: The accountant of Lati x M Inbox - dhyani11141999@gmail. X b My Questions | bartleby + i assessment.education.wiley.com/was/ui/v2/assessment-player/index.html?launchld3D1d52287e-dfd8-4d2a-80c9-4cbf51a01297#/question/0 E Chapter 5 Homework Question 1 of 6 > -/ 1 View Policies Current Attempt in Progress Koch Corporation's adjusted trial balance contained the following asset accounts at December 31, 2020: Cash $7,000, Land $40,000, Patents $12,500, Accounts Receivable $90,000, Prepaid Insurance $5,200, Inventory $30,000, Allowance for Doubtful Accounts $4,000, and Equity Investments (to be sold in the next quarter) $11,000. Prepare the current assets section of the balance sheet. (List Current Assets in order of liquidity.) КОСН СORPORATION Balance Sheet (Partial) 2$ 2$ 1:37 PM O Type here to search 9/24/2020 2 ..
Ch. 17 - Financial Statement Anal x Bb 2193516 + i learn-us-east-1-prod-fleet02-xythos.content.blackboardcdn.com/5f7ce11c673e5/2193516?X-Blackboard-Expiration=1648004400000&X-Blackboard-Signature=vwLhZZb3V30b7J84... 2 * O w WordCounter - Co... y! Yahoo A Regions Bank | Che.. Welcome, Justin – B. * eBooks, Textbooks... O Jefferson State Co... Electronics, Cars, Fa... C Home | Chegg.com 2193516 1 / 1 100% + | December 31, 2014 and 2013 Dec. 31, 2014 Dec. 31, 2013 Assets bloe Current assets: Cash. Marketable securities $ 500,000 $ 400,000 1,000,000 1,010,000 Accounts receivable (net)... 740,000 510,000 Inventories 1,190,000 950,000 000. Prepaid expenses. 250,000 229,000 Total current assets. $3,690,000 $3,089,000 Long-term investments... 2,350,000 2,300,000 1 Property, plant, and equipment (net) Total assets 3,740,000 3,366,000 $9,780,000 $8,755,000 Liabilities Current liabilities $ 900,000 $ 880,000 Long-term liabilities: $ 200,000 Mortgage note payable, 8%, due 2019. Bonds payable, 10%,…
in CengageNOWv2| Online teachi x Cengage Learning 8-1 Problem Set: Module Eight X how.comn/akeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=D&inprogress3false eBook Show Me How Changes in Current Operating Assets and Liabilities-Indirect Method Covington Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Accounts receivable $15,300 Inventory 66,500 67,200 Accounts payable 20,100 0098 Dividends payable 000' Adjust net income of $84,200 for changes in operating assets and liabilities to arrive at net cash flow from operating activities. ( Previou: Check My Work レ AD 12
Institution Page BAB140 Lab#3 Ch4 W2022 NWP Assessment Player UI Appli x WP Wiley Course Resources A education.wiley.com/was/ui/v2/assessment-player/index.html?launchld=31085e1c-3fe8-4a49-b0d5-235bab61d4d1#/question/2 E Apps W MarketWatch: Stock... e Business News Market News | Seek... O FINVIZ.com - Stock.. T7 CVNA 228.28 A +1. S Stocktwits - The lar. E* Google Translate E Earnings and Econo. AV Short Interest Stock. * U.S. News | Reuters WSJ market volume E Reading list >> BAB140 Lab#3 Ch4 W2022 Question 3 of 5 > -/2 View Policies Current Attempt in Progress Crane Corporation reports the following adjusted account balances, shown in alphabetical order, at the end of its fiscal year, February 28, 2021: Accounts payable 12,600 Income tax payable 4,700 Accounts receivable 27,100 Insurance expense 3,400 Accumulated depreciation-equipment 5,400 Prepaid insurance 2,900 Cash 17,600 Rent expense 5,800 Common shares 10,100 Retained earnings 20,100 Depreciation expense 4,400 Salaries expense…
Institution Page BAB140 Lab#3 Ch4 W2022 NWP Assessment Player UI Appli x WP Wiley Course Resources A education.wiley.com/was/ui/v2/assessment-player/index.html?launchld=31085e1c-3fe8-4a49-b0d5-235bab61d4d1#/question/4 E Apps W MarketWatch: Stock... e Business News Market News | Seek... O FINVIZ.com - Stock.. T7 CVNA 228.28 A +1. S Stocktwits - The lar. * Google Translate E Earnings and Econo. AV Short Interest Stock. * U.S. News | Reuters WSJ market volume E Reading list >> BAB140 Lab#3 Ch4 W2022 Question 5 of 5 -/2 View Policies Current Attempt in Progress Bonita Corporation reports the following adjusted account balances, shown in alphabetical order, at the end of its fiscal year, February 28, 2021: Accounts payable 12,700 Income tax payable $ 4,400 Accounts receivable 28,300 Insurance expense 3,600 Accumulated depreciation-equipment 5,200 Prepaid insurance 2,600 Cash 17,400 Rent expense 5,700 Common shares 19,900 Retained earnings 21,300 Depreciation expense 4,100 Salaries expense…
rks Window Help A v2.cengagenow.com escent Tech... Bb Learning Module 6 - ACCT1105: Financial Acc.. X CengageNOWv2 | Online teaching and learnin.. C Cengage Learnir еВook Show Me How Changes in Current Operating Assets and Liabilities Paneous Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, Year 2 Dec. 31, Year 1 Accounts receivable $39,490 $31,590 Inventory 76,340 65,150 Accounts payable 60,750 45,410 Dividends payable 18,000 24,000 Adjust net income of $351,000 for changes in operating assets and liabilities to arrive at net cash flows from operating activities. Previous Check My Work. All work saved. Save and Exit Submit Assig DEC tv 8. MacBook Air 80 000 000 DII F11 F9 F10 F8 F3 F4 F5 F6 F7 %23
A Final Exam - MATH 1330 - Math b Details | bartleby E New tab A https://www.webassign.net/web/Student/Assignment-Responses/submit?dep=254878928tags=autosave#question4023958_1 Sign in 12. DETAILS HARMATHAP12 6.2.009. MYΝΟΤΕS What are the future value and the interest earned if $4000 is invested for 3 years at 8% compounded quarterly? (Round your answers to the nearest cent.) future value 24 interest earned %24
Question Ex 8-8
issis.com/FEL X - Unit Activity: Mathematical Mo x + lelivery//ua/69158/45467532/aHR0cHM6Ly9mMS5hcHAUZWRtZW50dW0uY29tL2xlYXJuZXItdWkvc2Vjb25kYXJ5L3VzZXIt nit Activity: Mathematical Models and Consumer Finance Task 7 Financing Transportation Respond to each question below in two to three complete sentences. Each question is worth four points. Space used (includes formatting): 0/15000 Part A Lydia makes a down payment of $1,600 on a $11,000 car loan. How much of the purchase price will the interest be calculated on? Explain how you arrived at the final answer. BIUX² X₂ 15px Part B AV king a down payment on a car loan help a car buyer? 11 of 12 = Print 11:58 O PI ☐ Save &
HB Harvard Business Publi b My Questions bartleb B Chapter 7 - MBAD-503 Lauren Stoney | Net Im + HB MindTap - CengagX Ahttps://ng.cengage.com/static/nb/ui/evo/index.html?elSBN=9781337900010&id- 5432476578snapshotld=1286803& CENGAGE MINDTAP Q Search this course X Ch 08: Assignment - Risk and Rates of Return మా Five years of realized returns for CCC are given in the following table. Remember: 1. While CCC was started 40 years ago, its common stock has been publicly traded for the past 25 A-Z years. 2. The returns on its equity are calculated as arithmetic returns. Office 3. The historical returns for CCC for 2012 to 2015 are: 2013 2012 2014 2015 2016 Stock return 13.75% 9.35% 16.50% 23.10% 7.15% Given the preceding data, the average realized return on CCC's stock is of CCC's historical returns. Based on this conclusion, the The preceding data series represents standard deviation of CCC's historical returns is If investors expect the average realized return from 2012 to 2016 on CCC's…
HB Harvard Business Publi b My Questions bartleb B Chapter 7 - MBAD-503 + HB Lauren Stoney | Net Im MindTap - CengagX Ahttps://ng.cengage.com/static/nb/ui/evo/index.html?elSBN=9781337900010&id- 5432476578snapshotld=1286803& CENGAGE MINDTAP Q Search this course X Ch 08: Assignment - Risk and Rates of Return మా For example, the continuous probability distributions of rates of return on stocks for two different companies are shown on the following graph: A-Z PROBABILITY DENSITY Office Company A Company B -40 -20 0 20 40 60 RATE OF RETURN (Percent) Based on the graph's information, which of the following statements is true? O Company A has a smaller standard deviation Company B has a smaller standard deviation X
Qsnhu login - Search Do Homework-3-1 M X X Home X TeMyLab Finance Pearso X P Introduction: The Time X S C A G Sign in https://mylab.pearson.com/Student/PlayerHomework.aspx?homeworkld=623722542&questionid=1&flushe... Shonda Curry 05/23/22 9:51 PM FIN-320-X5089 Principles of Finance 22EW5 = Homework: 3-1 MyFinanceLab Assignment Question 9, P5-18 (similar to) Save HW Score: 42%, 21 of 50 points O Points: 0 of 4 > (Related to Checkpoint 5.5) (Solving for n) Jack asked Jill to marry him, and she has accepted under one condition: Jack must buy her a new $320,000 Rolls-Royce Phantom. Jack currently has $37490 that he may invest. He has found a mutual fund with an expected annual return of 6 percent in which he will place the money. How long will it take Jack to win Jill's hand in marriage? Ignore taxes and inflation. The number of years it will take for Jack to win Jill's hand in marriage is years. (Round to one decimal place.)
Learning SE MINDTAP evo/index.html?deploymentid=60338517901669990751687760&elSBN=9780357517642&nbld=3626933&snap... ☆ lomework 6300. 1 mancial Lailuialvi vi a spicoubnicel. Hide Feedback Correct X f6 Quantitative Problem 1: You plan to deposit $2,200 per year for 6 years into a money market account with an annual return of 2%. You plan to make your first deposit one year from today. a. What amount will be in your account at the end of 6 years? Do not round intermediate calculations. Round your answer to the nearest cent. 4 b. Assume that your deposits will begin today. What amount will be in your account after 6 years? Do not round intermediate calculations. Round your answer to the nearest cent. 6 Hide Feedback Incorrect F Check My Work Feedback Review the FVAN definition and its equation. Q Search Understand the difference between an ordinary annuity and an annuity due. Be careful about the order of mathematical operations if using the equation. If using a financial calculator, be…
E Chapter 10 Homework - FINANC X O NWP Assessment Player UI Appli x A Player + i education.wiley.com/player/#/res;url=https:%2F%2Feducation.wiley.com%2Fcontent%2FKieso_Intermediate_Accounting 17e%2Febook%2Fepub%2F9781119503682%2FOPS%2FC10.xht.. E10.1 (LO 1) (Acquisition Costs of Realty) The following expenditures and receipts are related to land, land improvements, and buildings acquired for use in a business enterprise. The receipts are enclosed in parentheses. a. Money borrowed to pay building contractor (signed a note) $(275,000) b. Payment for construction from note proceeds 275,000 c. Cost of land fill and clearing 8,000 d. Delinquent real estate taxes on property assumed by purchaser 7,000 e. Premium on 6-month insurance policy during construction 6,000 f. Refund of 1-month insurance premium because construction completed early (1,000) g. Architect's fee on building 22,000 h. Cost of real estate purchased as a plant site (land $200,000 and building $50,000) 250,000 i. Commission…
Question  8-19
1 of 2 On December 21 2017. Wildhorse Co. purchased $730,000 of commercial paper from Voight, Inc. The commerc paper matures January 14, 2018. Currency and coin on hand amounted to $10,446, A money market fund account held at Rogers, Inc. (a mutual fund organization) permits Wildhorse Co. to write chee on the full account balance, which was $930,000 at December 31, 2017. Wildhorse Co. has agreed to maintain a cash balance of $200,000 at all times at First National Bank of Alexander to ensure future credit availability. The balance in Wildhorse Co's petty cash fund is $400. During December 2017, Wildhorse Co. made travel advances to employees totaling $30,000 for executive travel that 9. 10. will occur during the first quarter of 2018. The employees will not reimburse the company for the advance, but are required to spend the funds on company-related travel and to submit receipts. The company received an LO.U. trom Stiller LLP, a company customer, on December 12. 2017. in the amount of…
Pears X P W Chapter: Recording Business TraNSACTIONS Sep. 1 hed:course:7710589/products/79c3fa4c-a84f-42ba-b87a-e36a400bca00/pages/urn:pe 6 7 Proble X P-F:2-30A. Journalizing transactions, posting journal entries to T- accounts, and preparing a trial balance (Learning Objectives 3, 4) 15 G New Ann Simpson started her practice as a design consultant on September 1, 2024. During the first month of operations, the business completed the following transactions: 3. Prepare the trial balance of Vince York, M.D., as of July 31, 2024. 30 Received $48,000 cash and issued common stock to Simpson. Purchased office supplies, $1,200, and furniture, $1,300, on account. Performed services for a law firm and received $1,900 cash. X Paid $18,000 cash to acquire land to be used in operations. Performed services for a hotel and received its promise to pay the $1,200 within one week. Paid for the furniture purchased on September 4 on account. Paid assistant's semimonthly salary, $1,500. Received cash on…
education.wiley.com Ch 1: Ho... WP NWP AS... С Maria Q.. b Search.. The Acc... Cengag... financia... WileyPL... financia... BB Financi.. Accoun... X - Cha... e Ch 1: Homework Question 4 of 5 - / 20 View Policies Current Attempt in Progress Van Occupanther is the bookkeeper for Roscoe Company. Van has been trying to get the balance sheet of Roscoe Company to balance. Roscoe's balance sheet is as follows. ROSCOE COMPANY Balance Sheet December 31, 2022 Assets Liabilities Cash $ 9,400 Accounts payable $25,000 Supplies 7,100 Accounts receivable (19,500) Equipment 45,000 Common stock 40,000 Dividends 9,200 Retained earnings 25,200 Total assets $70,700 Total liabilities and stockholders' equity $70,700 Prepare a correct balance sheet. (List Assets in order of liquidity.) ROSCOE COMPANY Balance Sheet 田 II
lem Set: Modx * CengageNOWv2 | Onl X * Cengage Learning B Milestone Two Guideli x G module ow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=.. eBook Show Me How Quick ratio Adieu Company reported the following current assets and current liabilities for two recent years: Dec. 31, 20Y4 Dec. 31, 20Y3 Cash $830 $1,090 Temporary investments 1,200 1,500 Accounts receivable 820 910 Inventory 2,100 2,500 Accounts payable 1,900 2,500 a. Compute the quick ratio on December 31 for each year. Round to one decimal place. 20Υ4 20Υ3 Quick Ratio b. Is the quick ratio improving or declining? Check My Work 56°F Mostly 39
16% D Fri le Edit View History Bookmarks Window Help A education.wiley.com W https://msroederbhs.weebly.com/uploads/2/2/4/0/= NWP Assessment Player UI Application - Quiz 2 -/3 E Question 9 of 10 < View Policies Current Attempt in Progress At August 31, Coffman Company has this bank information: cash balance per bank $6,450; outstanding checks $2,762; deposits in transit $1,700; and a bank service charge $20. Determine the adjusted cash balance per bank at August 31, 2021. Adjusted cash balance per bank 2$ Attempts: 0 of 1 used Submit Answer Save for Later 7.288 MAR 4 étv P. Maclook A 000 80 DII DD F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 @ # $ % A & * 2 3 5 6 8
P MindTap HW 1 - Spring 2021 - Fi X * MindTap - Cengage Learning b Details | bartleby ô https://ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=590512258542108435051542&elSBN=9780357114582&id=1062944983... Chelsea v CENGAGE MINDTAP Q Search this course A My Home HW 1 Courses Back to Assignment O Catalog and Study Tools Attempts: Average: / 1 A-Z Partner Offers 7. Problem 3.05 (MVA) EE Rental Options dOffice eBook College Success Tips Harper Industries has $400 million of common equity on its balance sheet; its stock price is $70 per share; and its market value added (MVA) is $90 million. How many common shares are currently outstanding? Write out your answer completely. For example, 5 million shares should be entered as 5,000,000. Round your answer to the nearest whole number, if necessary. Career Success Tips common shares You are eligible for a FREE 7- day trial of Cengage Unlimited or Cengage Unlimited eTextbooks Grade it Now Save & Continue Try for Free Continue without…
P MindTap HW 1 - Spring 2021 - Fi X * MindTap - Cengage Learning b Details | bartleby ô https://ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=590512258542108435051542&elSBN=9780357114582&id=1062944983... Chelsea v CENGAGE MINDTAP Q Search this course A My Home HW 1 Courses Back to Assignment O Catalog and Study Tools Attempts: Average: / 1 A-Z Partner Offers 6. Problem 3.04 (Statement of Stockholders Equity) EE Rental Options dOffice eBook College Success Tips In its most recent financial statements, Nessler Inc. reported $35 million of net income and $420 million of retained earnings. The previous retained earnings were $391 million. How much in Career Success Tips dividends were paid to shareho during the year? Assume dividends declared were actually paid. Write out your answer completely. For example, 25 mill be entered as 25,000,000. Round your answer to the nearest dollar, if necessary. $ You are eligible for a FREE 7- day trial of Cengage Unlimited or Cengage Unlimited…
P MindTap HW 1 - Spring 2021 - Fi X * MindTap - Cengage Learning b Details | bartleby ô https://ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=590512258542108435051542&elSBN=9780357114582&id=1062944983... Chelsea v CENGAGE MINDTAP Q Search this course A My Home HW 1 Courses Back to Assignment O Catalog and Study Tools Attempts: Average: / 1 A-Z Partner Offers 10. Problem 3.07 (EVA) EE Rental Options dOffice eBook College Success Tips Barton Industries has operating income for the year of $3,500,000 and a 37% tax rate. Its total invested capital is $20,000,000 and its after-tax percentage cost of capital is 8%. What is the firm's EVA? Round your answer to the nearest dollar, if necessary. Career Success Tips $ You are eligible for a FREE 7- day trial of Cengage Unlimited or Cengage Unlimited eTextbooks Grade it Now Save & Continue Try for Free Continue without saving Learn more ? Help O Give Feedback 8:17 PM O Type here to search 日 w 1/24/2021
m ll (Chapters 4 balance x i msudenver.instructure.com/courses/52503/quizzes/254780/take 2022 Spring PROBLEM 1 lome Use the Excel Template File to answer Problem 1 and Problem 2 Exam II Excel Template File. Problem1 and Problem2.xlsx nnouncements The accounts listed below for the year ended 2021, in random order, are for Polanyi Knowledge, Inc. Construct a classified balance sheet for the business in good form. yllabus Modules Cash 32,900 Discount on bonds payable 103.000 rades Accumulated depreciation-Buildings 630,600 Wages payable 92,000 eople Accounts Receivable 90,200 Note payable due 2023 300,000 uJa Taxes payable 27,000 Retained earnings 980,000 Inventory 180,000 Bonds payable 500,000 Additional paid in capital common Common stock 264,400 150,000 stock Long-term investments 77,000 Preferred stock 110,000 Buildings 1,500,000 Accounts payable 167.000 Additional paid in capital preferred Accumulated depreciation: 13,400 stock 210,000 equipment Equipment 760,000 Land 310,600 Prepaid…
NWP Assessment Builder UI App x w NWP Adaptive Assessment Playe X O WileyPLUS: Personal Finance, Enl x+ ôhttps://education.wiley.com/was/ui/v2/adaptive-assessment-player/index.html?launchld=D005b88a2-9bff-4b68-a4dd-b326ecc9384e#/ac.. actice [due Sat] 6.4 Mortgage Financing Jessica's mortgage payment, including principal, interest, taxes, and insurance, is $750 per month. She also has other monthly debt payments of $440. If her monthly gross income is $3,950. How would a bank assess Jessica's capacity to take on an additional credit card? O Asset ratio O Debt payment ratio O Debt ratio O Mortgage debt service ratio Save for Later Submit Answer
ntent X Bb Microsoft Word - Cash-to- X Bb Homework 5 × | 0 prod-fleet02-xythos.content.blackboardcdn.com/5d181b708c946/19992246?X-Blackboard-S3-Buc... - + ? Q Slater Compa O Search | CD | A | OF ㅂ Cash-to-accrual assignment 1. Slater Company uses the cash basis of accounting. Slater Company collected $950,000 from its customers during 2019. Customers owed Slater $150,000 of accounts receivable at the beginning of 2019, and $190,000 of accounts receivable at the end of 2019. What is Slater's sales revenue for 2019 under the accrual basis of accounting? 2. Merry Company uses the cash basis of accounting. Merry Company made $600,000 in payments to its suppliers during the year. Merry's beginning inventory was $20,000, and its ending inventory was $35,000. In addition, Merry had a beginning accounts payable of $40,000 and an ending accounts payable of $70,000. What is Merry's cost of goods sold under the accrual basis of accounting? ((( 3. Little Company uses the cash basis of accounting.…
mp?attempt=1764992&cmid%3875183&page=D12 الم صيرة بلحه u io a https://alternativet 4 SQUCOFFEE - Goog. B BCOM2911-Busines.. O Sultan Caboos Univ. O Trading Platfom ACADEMIC) E-LEARNING SERVICES SQU LIBRARIES SQU PORTAL ATTENDANCE lanagerial Accounting - Spring21 e / My courses / ACCT2121 yasserg Spring21/ Midterm Exam One / Midterm Exam One stion The adjustment of overapplied manufacturing overhead cost results in all the following, EXCEPT: O a. decrease in net operating income. ed O b. increase in net operating income. out of Oc. decrease in cost of goods sold O d. none of the given answers stion XYZ Company had the following information for the year: red Direct materials used OMR 110,000 dout of Direct labor incurred (5,000 hours) OMR 150,000 Actual manufacturing overhead incurred OMR 166,000 on The Company used a predetermined overhead rate of OMR 30 per direct labor hour for the year. Assume the only inventc an ending Work in Process Inventory balance of OMR 17,000. What was cost…
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,
Text book image
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:9781260013962
Author:BREALEY
Publisher:RENT MCG
Text book image
Financial Management: Theory & Practice
Finance
ISBN:9781337909730
Author:Brigham
Publisher:Cengage
Text book image
Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,
Text book image
Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Text book image
Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education
SEE MORE TEXTBOOKS
Related Questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,
Text book image
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:9781260013962
Author:BREALEY
Publisher:RENT MCG
Text book image
Financial Management: Theory & Practice
Finance
ISBN:9781337909730
Author:Brigham
Publisher:Cengage
Text book image
Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,
Text book image
Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Text book image
Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education
SEE MORE TEXTBOOKS