Probability ideas, including joint probability distributions, play a major role in financial activities. For example, portfolio managers must allocate funds among competing assets. Suppose there are two assets: Microsoft (M) stock and Starbucks (S) stock. For Microsoft stock, the following returns are possible: −10%, 10%, 20%, and 30%. For Starbucks stock, the following returns are possible: 0% and 20%. The joint probability distribution of the returns of the two assets is

Answer:

kindly check explanatio0n section.

Explanation:

PS: The joint probability distribution of the returns of the two assets is given in the attached picture. Also, both stocks are not independent.

So, let us delve straight into the solution to this particular question or problem. From the question, we are given two assets that is, Microsoft (M) stock and Starbucks (S) stock.

Thus, the expected return on Microsoft stock can be determined and the expected return on Starbucks stock can also be determined.

[1]. The expected return on Microsoft stock  = - 10 × 0.15 + 30 × 0.20 + 10 × 0.35 + 20 ×0.30 = 14%.

Using excel, Standard deviation on Microsoft stock = 12.4[ from [tex]\sqrt{(100 * 0.35 + 100 * 0.15 + 900 * 0.20 + 400 * 0.30}[/tex] - √[14]² ]

[2]. The expected return on starbucks stock= 20 × 0.15 + 20 × 0.10 + 20 × 0.2 = 12%.

Using excel, Standard deviation on Starbucks stock = √( 400 × 0.15 + 400 × 0.20 + 400 × 0.15 + 400 × 0.10) - √(12)²

= 9.8

Roger has just lost a lawsuit and has agreed to make equal annual payments of $15,500 for the next 7 years with the first payment due today. The value of this liability today is $88,000. What is the interest rate on the payments

8) River City Recycling just paid its annual dividend of $1.15 per share. The required return is 12.3 percent and the dividend growth rate is 0.75 percent. What is the expected value of this stock five years from now

ohnstone Company is facing several decisions regarding investing and financing activities. Address each decision independently. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1. On June 30, 2021, the Johnstone Company purchased equipment from Genovese Corp. Johnstone agreed to pay Genovese $10,000 on the purchase date and the balance in five annual installments of $8,000 on each June 30 beginning June 30, 2022. Assuming that an interest rate of 10% properly reflects the time value of money in this situation, at what amount should Johnstone value the equipment

Which one of the following statements regarding collaborative planning, forecasting, and replenishment (CPFR) systems is best? Question 10 options: A) In CPFR, each business develops a sales and operations plan and the mainframe system reconciles these plans to find a middle ground that all businesses work towards. B) CPFR is a set of business processes. C) CPFR has the Project Management Body of Knowledge (PMBOK©) as its basis. D) Studies have demonstrated that manual, paper-based CPFR systems are more responsive and more accurate than computer-based CPFR systems.

p Marine International manufactures an aquarium pump and is trying to decide whether to produce the filter system in-house or sign an outsourcing contract with Bayfront Manufacturing to make the filter system. Marine’s expertise is producing the pumps themselves but they are considering producing the filter systems also. To establish a filter system production area at Marine International, the fixed cost is $300,000 per year and the company estimates their variable cost of production in-house at $12.25 per filter system. If Marine outsources the production of the filter system to Bayfront, Bayfront will charge Marine $30 per filter system. Should Marine International outsource the production of the filter system to Bayfront if Marine sells 25,000 pumps a year?

8. A pension fund manager is considering three mutual funds, a stock fund with expected return of 15% and standard deviation of 32%, a bond fund with expected return of 9% and standard deviation of 23%, and a money market fund with a sure rate of 5.5%. The correlation between the stock and bond funds is 0.15. Tabulate and draw the investment opportunity set of the two risky funds, using investment proportions for the stock fund from 0% to 100% in increments of 20%. What is the lowest-risk combination of the stock and bond funds

Palmona Co. establishes a $140 petty cash fund on January 1. On January 8, the fund shows $29 in cash along with receipts for the following expenditures: postage, $46; transportation-in, $14; delivery expenses, $16; and miscellaneous expenses, $35. Palmona uses the perpetual system in accounting for merchandise inventory. Prepare journal entries to (1) establish the fund on January 1, (2) reimburse it on January 8, and (3) both reimburse the fund and increase it to $190 on January 8, assuming no entry in part 2. Hint: Make two separate entries for part 3.

Way Cool produces two different models of air conditioners. The company produces mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow.Process Activity Overhead Cost Driver QuantityComponents Changeover $ 500,000 Number of batches 800 Machining 279,000 Machine hours 6,000 Setups 225,000 Number of setups 120 $1,004,000 Finishing Welding $ 180,300 Welding hours 3,000 Inspecting 210,000 Number of inspections 700 Rework 75,000 Rework orders 300 $ 465,300 Support Purchasing $ 135,000 Purchase orders 450 Providing space 32,000 Number of units 5,000 Providing utilities 65,000 Number of units 5,000 $ 232,000 Additional production information concerning its two product lines follows. Model 145 Model 212Units produced 1,500 3,500Welding hours 800 2,200Batches 400 400Number of inspections 400 300Machine hours 1,800 4,200Setups 60 60Rework orders 160 140Purchase orders 300 150a. Determine departmental overhead rates and compute the overhead cost per unit for each product line. Base your overhead assignment for the components department on machine hours. Use welding hours to assign overhead costs to the finishing department. Assign costs to the support department based on the number of purchase orders.b. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212.c. Assum if the market price for Model 145 is $820 and the market price for Model 212 is $480, determine the profit or loss per unit for each model.

The following is the post-closing trial balance for the Whitlow Manufacturing Corporation as of December 31, 2020. Account Title Debits Credits Cash 5,000 Accounts receivable 2,000 Inventory 5,000 Equipment 11,000 Accumulated depreciation 3,500 Accounts payable 3,000 Common stock 10,000 Retained earnings 6,500 Sales revenue 0 Cost of goods sold 0 Salaries expense 0 Rent expense 0 Advertising expense 0 Totals 23,000 23,000 The following transactions occurred during January 2021: Jan. 1 Sold merchandise for cash, $3,500. The cost of the merchandise was $2,000. The company uses the perpetual inventory system. 2 Purchased equipment on account for $5,500 from the Strong Company. 4 Received a $150 invoice from the local newspaper requesting payment for an advertisement that Whitlow placed in the paper on January 2. 8 Sold merchandise on account for $5,000. The cost of the merchandise was $2,800. 10 Purchased merchandise on account for $9,500. 13 Purchased equipment for cash, $800. 16 Paid the entire amount due to the Strong Company.18 Received $4,000 from customers on account. 20 Paid $800 to the owner of the building for January's rent. 30 Paid employees $3,000 for salaries for the month of January. 31 Paid a cash dividend of $1,000 to shareholders.

At December 31, Amy Jo's Appliances had account balances in Accounts Receivable of $308,000 and in Allowance for Uncollectible Accounts of $510 (credit) before any adjustments. An analysis of Amy Jo's December 31 accounts receivable suggests that the allowance for uncollectible accounts should be 3% of accounts receivable. Bad debt expense for the year should be: Multiple Choice $9,750. $8,730. $7,831. $9,240.

Zurich Corporation has 38,000 shares of $90 par common stock outstanding. On February 8, Zurich Corporation declared a 4% stock dividend to be issued April 11 to stockholders of record on March 10. The market price of the stock was $117 per share on February 8. Journalize the entries required on February 8, March 10, and April 11.

Stellar, Inc. had net sales in 2020 of $1,508,000. At December 31, 2020, before adjusting entries, the balances in selected accounts were Accounts Receivable $393,100 debit, and Allowance for Doubtful Accounts $3,490 credit. If Stellar estimates that 8% of its receivables will prove to be uncollectible.

Required:
Prepare the December 31, 2020, journal entry to record bad debt expense.

Usage rate is Multiple Choice the percentage of total possible users divided by the total number of consumers who actually use a product or service. the number of times a customer uses or recommends a product or service annually. quantity consumed or patronage (store visits) during a specific period. the maximum number of times a customer has used a product or service historically. the profits a firm earns from customers who consume a particular product or service.

Cezanne Industries is planning on purchasing a new piece of equipment that will increase the quality of its production. It hopes the increased quality will generate more sales. The​ company's contribution margin ratio is 50​%, and its current breakeven point is $600,000 in sales revenue. If the​ company's fixed expenses increase by $30,000 due to the​ equipment, what will its new breakeven point be​ (in sales​ revenue)? If Cezanne ​Industries' fixed expenses increase by $30,000 due to the​ equipment, what will its new breakeven point be​ (in sales​ revenue)? Begin by identifying the general formula to compute the breakeven sales in dollars. ( Fixed expenses + Operating income ) ÷ Contribution margin ratio = Breakeven sales in dollars Cezanne will now have to generate of sales revenue to break even.

Oasis Company adds all materials at the beginning of its manufacturing process. Production information for selected months of the year follows:
E3-5 (Algo) Weighted-Average Method [LO 3-2, 3-3] Beginning Work in Process Ending Work in Process Conversion Conversion
Complete Units Units Complete
Months Untis (percent) Started Transferred out Units Percent
February 1300 46 --- 19400 6600 24 June 4300 75 24100 --- 3800 39September --- 27 25600 25600 2400 60December 2900 35 22400 21100 --- 73 Equivalent UnitsMonth Material Conversion February June September December
Required:
1. Reconcile the number of physical units to find the missing amounts.
2. Calculate the number of equivalent units for both materials and conversion for each month using the weighted-average method.

In the fictional country of Dirian the economics statistics department has been busy calculating the price index for a basket of goods from 2013 to 2017. January 2013 is the standardized price index, at 100, for a basket of consumer goods in the country. The price index increased in 2014 to 104.7, in 2015 to 109.3, in 2016 to 113.1, and in 2017 it increased to 119.2. You have been called to the country to help establish the rate of inflation for those years. What are the inflation rates in Dirian for 2014, 2015, 2016, and 2017

Illinois​ Furniture, Inc., produces all types of office furniture. The​ "Executive Secretary" is a chair that has been designed using ergonomics to provide comfort during long work hours. The chair sells for​ $130. There are minutes available during the​ day, and the average daily demand has been chairs. There are eight​ tasks: Task Performance Time​ (mins) Task Must Follow Task Listed Below A B C ​A, B D C E D F E G E H ​F, G This exercise only contains parts​ b, c,​ d, e,​ f, and g. ​b) The cycle time for the production of a chair​ = 9.23 minutes ​(round your response to two decimal​ places). ​c) The theoretical minimum number of workstations 6 ​(round your response up to the next whole​ number). ​d) The assignment of tasks to workstations should​ be: ​(Hint: Number workstations sequentially in terms of precedence relationships and combine any applicable​ tasks.) Task Workstation Number A Station 1 B Station 2 C Station 3 D Station 4 E Station 5 F Station 6 G Station 7 H Station 8 Were you able to assign all the tasks to the theoretical minimum number of​ workstations? No ​e) For this​ process, the total idle time per cycle​ = nothing minutes ​(enter your response as a whole​ number).

Now, consider the situation in which Olivia wants to earn a return of 3.00%, but the bond being considered for purchase offers a coupon rate of 6.00%. Again, assume that the bond pays semiannual interest payments and has three years to maturity. If you round the bonds intrinsic value to the nearest whole dollar, then its intrinsic value of (rounded to the nearest whole dollar) is its par value, so that the bond is

g If Billingham knows that it can sell the​ XC-750 to another firm for $2.17 million in two​ years, what kind of real option would that​ provide? ​(Select the best​ choice.) A. The decreased production will also require decreased inventory. B. This provides Billingham the option to abandon the investment. C. The firm can recover the feasibility study cost. D. Billingham will no longer depreciate the machine.

Weir Company (a fictional company) uses straight-line depreciation for its property, plant, and equipment, which, stated at cost, consisted of the following: December 31, 20X1 20X0 Land $ 25,000 $ 25,000 Buildings 195,000 195,000 Machinery and equipment 695,000 650,000 915,000 870,000 Less accumulated depreciation (400,000 ) (370,000 ) $ 515,000 $ 500,000 Weir’s depreciation expenses for 20X1 and 20X0 were $55,000 and $50,000, respectively. Required: What amount was debited to accumulated depreciation during 20X1 because of property, plant, and equipment retirements?

lang warehouses borrowed $100,000 from a bank and signed a note requiring 20 annual paymentsof $13,388 beginning one year from date of agreement. determine the interest rate implicit in this agreement

Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Activity Cost Activity Base Procurement $363,300 Number of purchase orders Scheduling 231,800 Number of production orders Materials handling 407,300 Number of moves Product development 774,600 Number of engineering changes Production 1,427,500 Machine hours Number of Number of Number of Number of Machine Number Purchase Production Moves Engineering Hours of Orders Orders Changes Units Disk drives 4200 380 1450 13 2400 2200Tape drives 1700 125 610 4 9900 3700Wire drives 12800 720 3800 21 12000 2600 The activity rate for the procurement activity cost pool is:___________. a. $20.42
b. $73.48
c. $60.98
d. $183.67

Hughes purchased a new Lincoln Continental automobile from Al Greene Inc., an authorized new car dealership. On the day of the sale, Hughes made a cash down payment and signed a purchase contract and an application for the title certificate. The understanding was that Hughes would take immediate possession of the car and return in a few days for new-car preparation and the installation of a CB radio. On the way home from the dealer, Hughes wrecked the car. The certificate of title had not yet been issued by the state. The buyer, Hughes, claimed that title had not yet passed because the title certificate had not yet been issued. Who must bear the loss? [Hughes v. Al Greene, Inc., 418 N.E.2d 1355 (Ohio) ]

Accounting for Operating Activities in a New Business (the Accounting Cycle)

Penny’s Pool Service & Supply, Inc. (PPSS) had the following transactions related to operating the business in its first year’s busiest quarter ended September 30, 2013:

a. Placed and paid for $2,600 in advertisements with several area newspapers (including the online versions), all of which ran in the newspapers during the quarter.

b. Cleaned pools for customers for $19,200, receiving $16,000 in cash with the rest owed by customers who will pay when billed in October.

c. Paid Pool Corporation, Inc., a pool supply wholesaler, $10,600 for inventory received by PPSS in May.

d. As an incentive to maintain customer loyalty, PPSS offered customers a discount for prepaying next year’s pool cleaning service. PPSS received $10,000 from customers who took advantage of the discount.

e. Paid the office receptionist $4,500, with $1,500 owed from work in the prior quarter and the rest from work in the current quarter. Last quarter’s amount was recorded as an expense and a liability Wages Payable.

f. Had the company van repaired, paying $310 to the mechanic.

g. Paid $220 for phone, water, and electric utilities used during the quarter.

h. Received $75 cash in interest earned during the current quarter on short-term investments.

i. Received a property tax bill for $600 for use of the land and building in the quarter; the bill will be paid next quarter.

j. Paid $2,400 for the next quarter’s insurance coverage.

Required:

1. For each of the events, prepare journal entries, checking that debits equal credits.

2. Based only on these quarterly transactions, prepare a classified income statement (with income from operations determined separately from other items) for the quarter ended September 30, 2013.

3. Calculate the net profit margin ratio at September 30, 2013 (using income before taxes in place of net income). What does this ratio indicate about the ability of PPSS to control operations?

If you have a bank account whose principal = $1000, and your bank compounds the interest twice a year at an interest rate of 5%, how much money do you have in your account at the year's end?

On January 1, 2016, Phoenix Co. acquired 100 percent of the outstanding voting shares of Sedona Inc. for $784,000 cash. At January 1, 2016, Sedona’s net assets had a total carrying amount of $548,800. Equipment (eight-year remaining life) was undervalued on Sedona’s financial records by $95,000. Any remaining excess fair over book value was attributed to a customer list developed by Sedona (four-year remaining life), but not recorded on its books. Phoenix applies the equity method to account for its investment in Sedona. Each year since the acquisition, Sedona has declared a $34,000 dividend. Sedona recorded net income of $113,000 in 2016 and $124,100 in 2017.

Selected account balances from the two companies’ individual records were as follows:

Phoenix Sedona
2018 Revenues $ 648,000 $ 335,000
2018 Expenses 412,000 234,000
2018 Income from Sedona 54,075
Retained earnings 12/31/18 347,075 236,500
What is consolidated net income for Phoenix and Sedona for 2018?

What is Phoenix’s consolidated retained earnings balance at December 31, 2018?

On its December 31, 2018, consolidated balance sheet, what amount should Phoenix report for Sedona’s customer list?

In Draco Corporation’s first year of business, the following transactions affected its equity accounts. Issued 6,400 shares of $2 par value common stock for $42. It authorized 20,000 shares. Issued 1,600 shares of 12%, $10 par value preferred stock for $47. It authorized 3,000 shares. Reacquired 320 shares of common stock for $54 each. Retained earnings is impacted by reported net income of $74,000 and cash dividends of $27,000. Prepare the stockholders’ equity section of Draco’s balance sheet as of December 31. (Amounts to be deducted should be indicated by a minus sign.)

Gentle Ben's Bar and Restaurant uses 6,400 quart bottles of an imported wine each year. The effervescent wine costs $4 per bottle and is served only in whole bottles because it loses its bubbles quickly. Ben figures that it costs $30 each time an order is placed, and holding costs are 35 percent of the purchase price. It takes two weeks for an order to arrive. Weekly demand is 128 bottles (closed two weeks per year) with a standard deviation of 45 bottles. Ben would like to use an inventory system that minimizes inventory cost and will provide a 95 percent service probability. a. What is the economic quantity for Ben to order

South Sea Baubles has the following (incomplete) balance sheet and income statement. BALANCE SHEET AT END OF YEAR (Figures in $ millions) Assets 2015 2016 Liabilities and Shareholders' Equity 2015 2016 Current assets $ 105 $ 215 Current liabilities $ 80 $ 105 Net fixed assets 950 1,050 Long-term debt 675 900 INCOME STATEMENT, 2016 (Figures in $ millions) Revenue $ 2,025 Cost of goods sold 1,105 Depreciation 425 Interest expense 255 a&b. What is shareholders’ equity in 2015 and 2016? (Enter your answers in millions.) c&d. What is net working capital in 2015 and 2016? (Enter your answers in millions.) e. What are taxes paid in 2016? Assume the firm pays taxes equal to 35% of taxable income. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) f. What is cash provided by operations during 2016? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) g. Net fixed assets increased from $950 million to $1,050 million during 2016. What must have been South Sea’s gross investment in fixed assets during 2016? (Enter your answer in millions.)

How are consumer demand and business-to-business demand of goods and services related?