Problems for Chapter 5
Problem 8 on page 197
Correlation
a) 1
b) 0
c) -1
Expected Return (portfolio mean)
Weighted Average (8% to 13%)
Weighted Average (8% to 13%)
Weighted Average (8% to 13%)
Portfolio Variance
=
Portfolio SD when Corr is 1
Portfolio SD
ACCT 423
SPRING 2014
TEST CHAPTERS 1 - 4
Name: _
Respond to the following short answer and essay questions in the space provided or use the back of the page
as needed.
1. Describe managements responsibility regarding audited financial statements (Hint: pa
ACCT 423
SPRING 2014
TEST CHAPTERS 1 - 4
Name: _
Respond to the following short answer and essay questions in the space provided or use the back of the page
as needed.
1. Describe managements responsibility regarding audited financial statements (Hint: pa
Problems for Chapter 2
Problem 1 on page 66
Number of Dollars
=
=
1,000/80
$12.50
Problem 3 on page 66
a) Price of Stock
=
103.2/0.8595
=
$120.07 (rounded)
b) Price of Stock=
93.3/1.333
=
$69.99 (rounded)
c) Price of Stock
=
1,350/110
=
$12.27 (rounded)
P
Problems for Chapter 1
Problem 1 on page 30
a) Additional Accumulation Needed
b) Annual Deposit
=
=
=
$300,000 - $100,000
=
$200,000
($200,000/$1,000) x $36.83
$7,366.00
Problem 2 on page 30
a) Smith Taxes =
(10% x $17,400) + (15% x ($70,700 - $17,400) +
Ch. 1Taxes: taxes on interest income- multiply interest and tax rate for the proper taxable income range. Taxes on dividends: dividends
multiplied by 15%. Long-term capital gains are multiplied by 15% (when in the 25-30% tax rate category, if in the 10 or