Multiple Regression Analysis
y = b0 + b1x1 + b2x2 + . . . bkxk + u
2. Inference
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Multiple Linear Restrictions
Everything weve done so far has involved
testing a single linear restriction, (e.g. b1 =
Assignment
Please follow the instructions:
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For writing equation, use the InsertEquations (in MS word).
Interpretation has to be brief. Avoid writing irrelevant briefs.
Only answers to
Chapter 18: Dividends and Other Payouts
18.1 February 16: Declaration date - the board of directors declares a dividend payment that will be made on March 14. February 24: Ex-dividend date - the share
Chapter 17: Valuation and Capital Budgeting for the Levered Firm
17.1 a. The maximum price that Hertz should be willing to pay for the fleet of cars with all-equity funding is the price that makes the
Appendix: 16B: The Miller Model and the Graduated Income Tax
16.17 a. According to the Miller Model, in equilibrium: rB (1 TC) = rS where rB = the pre-tax cost of debt (the interest rate) TC = the cor
Chapter 16: Capital Structure: Limits to the Use of Debt
16.1 a. The value of a firms equity is the discounted expected cash flow to the firms stockholders. If there is a boom, Good Time will generate
Chapter 15: Capital Structure: Basic Concepts
15.1 a. Since Alpha Corporation is an all-equity firm, its value is equal to the market value of its outstanding shares. Alpha has 5,000 shares of common
Chapter 14: Long-Term Financing: An Introduction
14.1 a. Since the "common stock" entry in the balance sheet represents the total par value of the stock, simply divide that by the par per share: Commo
Chapter 13:
13.1 a. b.
Corporate-Financing Decisions and Efficient Capital Markets
Firms should accept financing proposals with positive net present values (NPVs). Firms can create valuable financing
Minicase: ALLIED products narrative
We have made a number of necessary assumptions. The instructor may decide to make different assumptions.
1. The average beta of companies in the commercial aircaraf
Chapter 12: Risk, Cost of Capital, and Capital Budgeting
12.1 The discount rate for the project is equal to the expected return for the security, RS, since the project has the same risk as the firm as
Chapter 11: An Alternative View of Risk and Return: The Arbitrage Pricing Theory
11.1 Real GNP was higher than anticipated. Since returns are positively related to the level of GNP, returns should ris
Chapter 10: Return and Risk: The Capital-Asset-Pricing Model (CAPM)
10.1 a. Expected Return = (0.1)(-0.045) + (.2)(0.044) + (0.5)(0.12) + (0.2)(0.207) = 0.1057 = 10.57% The expected return on Q-marts
Chapter 9: Capital Market Theory: An Overview
9.1 a. The capital gain is the appreciation of the stock price. Because the stock price increased from $37 per share to $38 per share, you earned a capita
Chapter 8: Risk Analysis, Real Options, and Capital Budgeting
8.1 Calculate the NPV of the expected payoff for the option of going directly to market. NPV(Go Directly) = CSuccess (Prob. of Success) +
Mini Case: Goodweek Tires, Inc. Assumptions PP&E Investment Useful life of PP&E Investment (years) Salvage Value of PP&E Investment Annual Depreciation Expense (7 year MACRS) Year 1 2 3 4 5 6 7 8 MACR
Chapter 7: Net Present Value and Capital Budgeting
7.1 a. Yes, the reduction in the sales of the companys other products, referred to as erosion, should be treated as an incremental cash flow. These l
Appendix 5A: The Term Structure of Interest Rates, Spot Rates, and Yields to Maturity
5A.1 a. The present value of any coupon bond is the present value of its coupon payments and face value. Match eac
Chapter 5: How to Value Bonds and Stocks
5.1 The present value of any pure discount bond is its face value discounted back to the present. a. PV = F / (1+r)10 = $1,000 / (1.05)10 = $613.91 = $1,000 /
Chapter 4: Net Present Value
4.1 a. b. c. Future Value Future Value Future Value = C0 (1+r)T = $1,000 (1.05)10 = $1,628.89 = $1,000 (1.07)10 = $1,967.15 = $1,000 (1.05)20 = $2,653.30
d.
Because intere
Chapter 3: Financial Planning and Growth
3.1 From the relationship, S = .00001 x GNP, we can get forecast sales: S = 0.00001; GNP = 0.00001 ($2,050 trillion) = $20,500,000
Now, compute the other value
Chapter 2: Accounting Statements and Cash Flow
2.1 Following the example in Table 2.1: Assets Current assets Cash Accounts receivable Total current assets Fixed assets Machinery Patents Total fixed as
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MECHANICSOFOPTIONS
MARKETS
Options, Futures, and Other Derivatives, 7th Ed., John C. Hull (2008):
Chapter 9-10
PayoffsfromOptions
WhatistheOptionPositioninEachCase?
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K=Strikeprice,ST=Priceofassetat
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MECHANICSOFOPTIONS
MARKETS
Options, Futures, and Other Derivatives, 7th Ed., John C. Hull (2008):
Chapter 9-10
Options
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Acalloptionisanoptiontobuyacertainassetbya
certaindateforacertainprice(thestr