INVESTMENTS(LL)W/CONNECT
11th Edition
ISBN: 9781260433920
Author: Bodie
Publisher: McGraw-Hill Publishing Co.
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Chapter 13, Problem 6PS
Summary Introduction
To calculate: The second regression equation and the results as intercept, slope coefficients, standard errors and t-statistics are to be represented.
Introduction: The security market line (SML) is a line drawn on an outline that fills in as a graphical portrayal of the
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Please explain with a reasoing
Which of the following statements about the RFM analysis above is NOT correct?
A) The average response rate is 2.02%.
B) Recency metric may perform better to predict responsive customers than Frequency and Mon- etary value metrics.
C) The response rate of recency-based quintile 1 (4.50%) is much greater than the average re- sponse rate, implying that company X would be able to reduce the costs incurred for having a successful number of responses in the campaign if it chose the customers only from the quintile (recency-based quintile 1).
D) This result shows a failure of predicting profitable customers through the RFM metrics because the response rate does not dramatically vary from monetary value-based quintile 1 to 5.
9.
In a Balanced Scorecard, what perspective would a measure of
the number of repeat orders be most likely to appear?
(a) Market perspective
(b) Customer perspective
(c) Internal perspective
(d) Financial perspective
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- Q10) Regression analysis measures cost behavior more reliable than other methods. Select one: True Falsearrow_forwardBased on the following sensitivity report, what would be the impact of changing the objective function coefficient for Product_1 to 11 and changing the objective function coefficient for Product_3 to 18? Applying the 100% rule, ______________ because the total change in the objective function coefficients _________________ 100%. first blank choices: A. the optimal solution will not change B. the optimal solution may change second blank choices: A. does exceed B. does not exceed Variable Cells Cell Name Final Value Reduced Cost Objective Coefficient AllowableIncrease AllowableDecrease $B$2 Product_1 0 −2 10 6 1E+30 $B$3 Product_2 175 0 13 1E+30 12 $B$4 Product_3 0 −1.5 13 7 1E+30 Constraints Cell Name Final Value Shadow Price Constraint R.H.Side AllowableIncrease AllowableDecrease $H$9 Resource_A 0 0 100 1E+30 100 $H$10 Resource_B 525 0 800 1E+30 275 $H$11 Resource_C 700 1.75 700 366.6666667 700arrow_forwardSHOW YOUR WORK IN THE SPACES PROVIDED BELOW FOR FULL CREDIT. 1) Understanding Normal Distribution (2p) a. Which normal curve has a greater mean? b. Which normal curve has a greater standard deviation?arrow_forward
- When comparing the lower of cost to market the appropriate market value is determined before comparing it to the cost the purpose of the ceiling is to ensure that the write-down is sufficient to cover all expected gains O the purpose of the floor is to prevent an excessive gain from being recognized in the future the process is consistent with the principle of conservatism because the goal is to limit excessive swings in gross margin O000arrow_forward1.) What is sensitivity analysis? 2.) Perform a sensitivity analysis on the cost per unit, unit sales, and salvage value. Assume each of these variables can vary from its base-case, or expected, value by plus or minus 10%, 20%, and 30%. Include a sensitivity graph, and discuss the results. 3.) What is the primary weakness of sensitivity analysis? What is its primary usefulness?arrow_forwardCustomer measures on the balanced scorecard should be: a. Internal: Yes , External: No, Monetary: No, Non-monetary: Yes b. Internal: Yes , External: Yes, Monetary: Yes, Non-monetary: Yes c. Internal: No , External: Yes, Monetary: Yes, Non-monetary: No d. Internal: No , External: Yes, Monetary: No, Non-monetary: Yesarrow_forward
- Newport, Inc. used Excel to run a least-squares regression analysis, which resulted in the following output: Regression Statistics Multiple R R Square Observations 0.7225 0.8500 30 Coefficients Standard Error T Stat P-Value 0.021 Intercept Production (X) 31,000 5.87 3,493 2.86 0.4640 14.30 0.000 a. What is Newport's total fixed cost? Total Fixed Cost b. What is Newport's variable cost per unit? (Round your intermediate calculations to 2 decimal places.) Variable Cost per unit c. What total cost would Newport predict for a month in which they sold 5,000 units? Total Costs d. What proportion of variation in Newport's cost is explained by variation in production? (Round your intermediate calculations to 2 decimal places.) Proportion of Variationarrow_forwardShow detailed steps to solve the following question. Calculate the Expected Rate, Standard Deviation, Variance and coefficient of variance. Then decide which of the following company is better for investment.arrow_forwardSolve in detailarrow_forward
- 1.Suppose you find, as research indicates, that in the cross-section regression of the CCAPM, the coefficients of factor loadings on the Fama-French model are significant predictors of average return factors (in addition to consumption beta). How would you explain this phenomenon?arrow_forwardkindly helparrow_forwardConvert the following scores of different alternatives of a cost attribute to profit scores, each on a scale of 1 to 10: 80,000, 20,000, 70,000. (Report the sum of the resulting three profit scores). Report your answer to the nearest two dicimal places (e.g. 13.53 or 12.00)arrow_forward
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