EBK BUSINESS STATISTICS
8th Edition
ISBN: 9780135179833
Author: STEPHAN
Publisher: VST
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In May, about 451 thousand existing homes were sold in the U.S., and sales were decreasingby 3.4% per month.(a) Create a model for this situation. (Recall that you should define the independent anddependent variables and their units, as well as provide an equation.)(b) If this trend continues, how many existing homes will be sold in the U.S. in October?(Round to the nearest thousand homes.)
Although investing all at once works best when stock prices are rising, dollar-cost averaging can be a good way to take advantage of a fluctuating market. Dollar-cost averaging is an investment strategy designed to reduce volatility in which securities are purchased in fixed dollar amounts at regular intervals regardless of what direction the market is moving. This strategy is also called the constant dollar plan.
You are considering a hypothetical $1,200 investment in a media company's stock. Your choice is to invest the money all at once or dollar-cost average at the rate of $100 per month for one year. Assume that the company allows you to purchase "fractional" shares of its stock.
(a)
If you invested all of the money in January and bought the shares for $12 each, how many shares could you buy?
shares
(b)
From the following chart of share prices, calculate the number of shares that would be purchased each month using dollar-cost averaging and the total shares for the year.…
Although investing all at once works best when stock prices are rising, dollar-cost averaging can be a good way to take advantage of a fluctuating market. Dollar-cost averaging is an
investment strategy designed to reduce volatility in which securities are purchased in fixed dollar amounts at regular intervals regardless of what direction the market is moving. This
strategy is also called the constant dollar plan.
You are considering a hypothetical $1,200 investment in a media company's stock. Your choice is to invest the money all at once or dollar-cost average at the rate of $100 per month
for one year. Assume that the company allows you to purchase "fractional" shares of its stock.
(a) If you invested all of the money in January and bought the shares for $12 each, how many shares could you buy?
shares
(b) From the following chart of share prices, calculate the number of shares that would be purchased each month using dollar-cost averaging and the total shares for the year.
Round to…
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- Although investing all at once works best when stock prices are rising, dollar-cost averaging can be a good way to take advantage of a fluctuating market. Dollar-cost averaging is an investment strategy designed to reduce volatility in which securities are purchased in fixed dollar amounts at regular intervals regardless of what direction the market is moving. This strategy is also called the constant dollar plan. You are considering a hypothetical $1,200 investment in a media company's stock. Your choice is to invest the money all at once or dollar-cost average at the rate of $100 per month for one year. Assume that the company allows you to purchase "fractional" shares of its stock. (a)If you invested all of the money in January and bought the shares for $12 each, how many shares could you buy? shares (b)From the following chart of share prices, calculate the number of shares that would be purchased each month using dollar-cost averaging and the total shares for the year. Round…arrow_forwardQuestion 4) There are three type of investment in a portfolio: S&P 500 index, 10-year treasury bond index, cash invested in money market a 1-day federal fund rate. Table 1 represents S&P 500 index for return on stocks, 10-year treasury bond index for return on bonds and cash invested in money market a 1-day federal fund rate. Table 1. S&P 500 Index, Bond Index and Money Market Bonds 3287,3 Money Market 1007,8 Year Stocks 1995 792,1 1996 973,9 3291,6 1055,3 1997 1346,5 1670,1 2011,3 1837,4 3687,3 4220,2 3903,3 4575,3 1119,5 1165,2 1998 1999 1246,5 2000 1313,1 (a) Calculate the geometric means of rates of return for stocks, bonds, and money market. (b) Calculate the covariance matrix of rates of return. Table 2. Covariances between rates of return of securities Covariance Stocks Stocks Bonds Money Market ? ? Bonds ? ? ? Money Market ? ? ? (c) Set the quadratic program to minimize the portfolio risk. It is assumed that shortsales are allowed.arrow_forwardThe shrinking rainy day fund. On October 5 2015 The Boston Globe published a story headlined "state's rainy day fund has dwindled over the past decade" that said (in part): In the summer of 2007, before the massive recession began, the rainy day fund had $2.3 billion --a cushion of about 7.8 percent of total state spending, according to the Taxpayers Foundation. This summer the rainy day balance stood at $1.1 billion--about 2.7 percent of total state spending, a fraction small enough to raise a red flag for analysis. What is the percentage change in total state spending between the summer of 2007 and this past summer?arrow_forward
- The ABC Company is involved in the production and selling of consumer goods, particularly beauty products such as bath soap and shampoo and had registered a positive profit growth for the last 10 years. However, the current year seems to be different from those years as the company is expecting a decline in profit; which is estimated to be about 70% below the target. The manager now is in a dilemma … asking himself/herself “What happened, why this decline in profit?” The Manager then asked the company Accountant to give him/her the data on sales and advertising cost for the last 10 years – he/she wants these data to determine whether the company can live without advertising, as advertising cost happens to be substantial. Justify your answer by doing as step-by-step procedure in Correlation Analysis using a 0.05 level of significance. The data are as follows –arrow_forwardThe Shrinking Rainy Day Fund. On October 5, 2015 The Boston Globe published a story headlined "state's rainy day fund has dwindled over past decade" that said (in part): In the summer of 2007, before the massive recession began, the rainy day fund had $2.3 billion--a cushion of about 7.8 percent of total state spending, according to the taxpayers' foundation. This summer, the rainy day balance stood at $1.1 billion--about 2.7 percent of total state spending, a fraction small enough to raise a red flag for analysis. Calculate total state spending as of the summer of 2007 and this past summer (2015).arrow_forwardThe Board of Governors of the Federal Reserve System publishes data on mortgage debt outstanding by type of property and holder. The following data give the amounts of residential nonfarm debt (in $ billions) held by savings institutions in the United States over a 10-year period. Use these data to develop an autoregression model with a one-period lag. Discuss the strength of the model. Year 1 529 2 554 3 559 4 602 5 672 6 669 7 600 8 538 9 490 10 470 Debtarrow_forward
- could you show the calculations in excel?arrow_forwardInvesting: Inverse ETFs (Exchange Traded Funds) Inverse ETFs, sometimes referred to as "bear market" or "short" funds, are designed to deliver the opposite of the performance of the index or category they track, and so can be used by traders to bet against the stock market. The following table shows the performance of three such funds as of August 5, 2015.† Year-to-Date Loss (%) MYY (ProShares Short Midcap 400) 6 SH (ProShares Short S&P 500) 5 REW (ProShares UltraShort Technology) 7 You invested a total of $13,000 in the three funds at the beginning of 2011, including an equal amount in SH and REW. Your year-to-date loss from the first two funds amounted to $570. How much did you invest in each of the three funds? MYY$ SH$ REW$arrow_forwardDentists are increasingly concerned about the growing trend of local school districts to grant soft drink companies exclusive rights to install soda pop machines in schools in return for money-usually millions-that goes directly into school coffers. According to a recent study by the National Soft Drink Association, 62% of schools nationally already have such contracts. This comes at a time when dentists are seeing an alarming increase in horribly decayed teeth and eroded enamel in the mouths of teenagers and young adults. With ready access to soft drinks, children tend to drink them all day. That, combined with no opportunity to brush, leads to disaster, dentists say. Suppose that 20 schools around the country are randomly selected and asked if they have a soft drink contract. Find the probability that the number of 'Yes" answers is A. exactly 8 B. at most 8 C. at least 4 D. between 4 and 12, inclusivearrow_forward
- If a quarterly seasonal index is 1.16, it implies that a. the quarter's sales are 1.6% of the yearly average b. the quarter's sales are 16% above the yearly average c. he other three quarterly percentages will total 84% d. the quarter's sales are 16% of yearly total salesarrow_forwardExample 9: The following is the trading and profit and loss account of Mercury Ltd. for the year ending on 31" December 2015, followed by the Balance Sheet of the company: st Particular To Opening Stock To Purchases To Gross Profit c/d: 6,00,000 Trading and Profit and Loss Account Particular 5,80,000 By Sales 24,40,000 By Closing Stock 30,00,000 6,20,000 36,20,000 3,20,000 By Gross profit b/d 2,80,000 6,00,000 36,20,000 6,00,000 To General Expenses To Net Profit 6,00,000arrow_forward12. You are provided the monthly returns data for an investment fund and its benchmark for the last five months. The fund returned 2.2%, 0.7%, 1.7%, 1.2%, and -1.9% in these five months respectively. The benchmark returned 1.5%, 0.4%, 0.4%, 0.5%, and -1.0% in the corresponding five months. The risk-free asset has an effective annual return (EAR) of 1% during these five months. The beta of the fund is 0.6656. What is the Information Ratio of the fund using annualized numbers? Question 16 options: 1.73 1.77 1.82 1.86 1.91arrow_forward
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