Results of investments in stock.

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Answer 1

Question

Chapter ST3, Problem 1CQ

To determine

Results of investments in stock.

Expert Solution & Answer

Explanation of Solution

People can choose a diversified portfolio to get a high return with low risk. If an individual only invests in stock market, it will result in a higher risk. But he invests in a stock market by holding a diverse portfolio; he can achieve a good high return with least risk. It is also a good idea when the person uses some social security program to make his investments. If the person invests in the Old Age and Survivor Insurance, he will get a benefit from the program at the time of his retirement.

Economics Concept Introduction

Portfolio: Portfolio is a mixed investment in stock, bond, bank saving, and so on to get a high profit with low cost.

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Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.

Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…

Answer 2

Question

Chapter ST3, Problem 1CQ

To determine

Results of investments in stock.

Expert Solution & Answer

Explanation of Solution

People can choose a diversified portfolio to get a high return with low risk. If an individual only invests in stock market, it will result in a higher risk. But he invests in a stock market by holding a diverse portfolio; he can achieve a good high return with least risk. It is also a good idea when the person uses some social security program to make his investments. If the person invests in the Old Age and Survivor Insurance, he will get a benefit from the program at the time of his retirement.

Economics Concept Introduction

Portfolio: Portfolio is a mixed investment in stock, bond, bank saving, and so on to get a high profit with low cost.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter ST3, Problem 1CQ

To determine

Results of investments in stock.

Expert Solution & Answer

Explanation of Solution

People can choose a diversified portfolio to get a high return with low risk. If an individual only invests in stock market, it will result in a higher risk. But he invests in a stock market by holding a diverse portfolio; he can achieve a good high return with least risk. It is also a good idea when the person uses some social security program to make his investments. If the person invests in the Old Age and Survivor Insurance, he will get a benefit from the program at the time of his retirement.

Economics Concept Introduction

Portfolio: Portfolio is a mixed investment in stock, bond, bank saving, and so on to get a high profit with low cost.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter ST3, Problem 1CQ

To determine

Results of investments in stock.

Expert Solution & Answer

Explanation of Solution

People can choose a diversified portfolio to get a high return with low risk. If an individual only invests in stock market, it will result in a higher risk. But he invests in a stock market by holding a diverse portfolio; he can achieve a good high return with least risk. It is also a good idea when the person uses some social security program to make his investments. If the person invests in the Old Age and Survivor Insurance, he will get a benefit from the program at the time of his retirement.

Economics Concept Introduction

Portfolio: Portfolio is a mixed investment in stock, bond, bank saving, and so on to get a high profit with low cost.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter ST3, Problem 1CQ

To determine

Results of investments in stock.

Expert Solution & Answer

Explanation of Solution

People can choose a diversified portfolio to get a high return with low risk. If an individual only invests in stock market, it will result in a higher risk. But he invests in a stock market by holding a diverse portfolio; he can achieve a good high return with least risk. It is also a good idea when the person uses some social security program to make his investments. If the person invests in the Old Age and Survivor Insurance, he will get a benefit from the program at the time of his retirement.

Economics Concept Introduction

Portfolio: Portfolio is a mixed investment in stock, bond, bank saving, and so on to get a high profit with low cost.

Answer 6

Chapter ST3, Problem 1CQ

To determine

Results of investments in stock.

Expert Solution & Answer

Explanation of Solution

People can choose a diversified portfolio to get a high return with low risk. If an individual only invests in stock market, it will result in a higher risk. But he invests in a stock market by holding a diverse portfolio; he can achieve a good high return with least risk. It is also a good idea when the person uses some social security program to make his investments. If the person invests in the Old Age and Survivor Insurance, he will get a benefit from the program at the time of his retirement.

Economics Concept Introduction

Portfolio: Portfolio is a mixed investment in stock, bond, bank saving, and so on to get a high profit with low cost.

Answer 7

Chapter ST3, Problem 1CQ

To determine

Results of investments in stock.

Answer 8

Expert Solution & Answer

Explanation of Solution

People can choose a diversified portfolio to get a high return with low risk. If an individual only invests in stock market, it will result in a higher risk. But he invests in a stock market by holding a diverse portfolio; he can achieve a good high return with least risk. It is also a good idea when the person uses some social security program to make his investments. If the person invests in the Old Age and Survivor Insurance, he will get a benefit from the program at the time of his retirement.