The Rago Corporation had the following stock outstanding from 2009 through 2012: Preferred stock: $100 par value, 8 percent cumulative, 5,000 shares authorized, issued, and outstanding Common stock: $10 par value, 100,000 shares authorized, issued, and outstanding The company paid $30,000, $30,000, $94,000, and $130,000 in di
How an understanding of adverse selection and moral hazard can help us better understand financial crises. The greatest financial crisis faced by the United States was the Great Depression, from 1929 to 1933. Go to http://www.amatecon.com/greatdepression.html. This site contains a brief discussion of the factors that led to the
Discuss the following terms related to structure and staffing: realignment, restructuring and lateral shift. Choose the term you believe to the most detrimental to the organization and staff. Why?
You need to decide how to invest a graduation gift of $1000. The annual rate of return is given in the next table for each of the three different types of investments and three different states of the economy. Recession Stable Economy Expansion Investment A 2.5% 2.5%
Please see attached Show that the risk-neutral probabilities in the Cox-Ross-Rubinstein model are given by equations (6.15). ------------------------------------------------------------------------------------- (See attached pages for relevant information from the textbook) 188 Chapter 6 is preferable to taking
Consider a GNMA mortgage pool with principal of $20 million. The maturity is 30 years with a monthly mortgage payment of 10 percent per annum. Assume no prepayments. a. What is the monthly mortgage payment (100 percent amortizing) on the pool of mortgages? b. If the GNMA insurance fee is 6 basis points and the servicing fe
Question 1 The primary role of organized security exchanges is to raise capital (money) for firms. Answer TRUE FALSE Question 2 In an "underwriting" the investment banker guarantees the firm selling the securities a specified amount. Answer TRUE FALSE T Question 3 In a "best
Explain the issue of related party transactions not being arm's length transactions and the risk that transactions with related parties might not be valued at the same amount as they would be with an independent third party. Is it simply because the actual amount of the transaction would be higher with a third party?
Is there some critical distinction between "operating leverage" and "financial leverage"?
After you answer each question you must also explain whether your answer affects corporations and individuals positively or negatively. Please number your answer to match each question number. GENERAL FRAUDULENT PRACTICES 1. What measures do you have in place to help your organization fight fraud? 2. How, if at all, does yo
Airport Connection provides shuttle service between four hotels near a medical center and an international airport. Airport Connection uses two 10 passenger vans to offer 12 round trips per day. A recent month's activity in the form of a cost-volume-profit income statement is shown below. Fare revenues (1,440 fares) $36,000
The average cost of employing each police officer per year if $30,000 for a small twon. The current population of the town is 1,000. Calculate the per capita cost per police officer. Explain why the increase in population can result in increased per capita taxes, even though the per capita cost per police officer declines with p
Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, Sotheby's sold a Edgar Degas' bronze sculpture at an auction for a price of $10,311,500. Unfortunately for the previous owner, he had purchased it in 1999 at a price of $12,377,500. What was his annual rate of
See the attached file. 1. Consider the following three investments. Assume that T-bills yielded a constant 3 percent. Calculate the risk-adjusted performance of each of the funds, using the Sharpe measure. Year A B C 2003 5% 4% 6% 2004 0% 1 1 2005 5 4 10 2006 8 10 18 2007 5 5 7.
Earnings per share (EPS) for Valcor, Inc. are $3 at a sales level of $2 Million. If Valcor's degree of operating leverage is 2.0 and its degree of combined leverage is 8.0, what will happen to EPS if operating income increases by 3 percent?
There are many data sources that can help with KYC (Know Your Customer) procedures. Discuss where the line is drawn between KYC and the invasion of privacy. How do you develop a policy to investigate customers and prospects without crossing the line of confidentiality? How do you protect your clients and employees? Name the data sources that would be helpful in a due diligence process. Who should have access to these? Should all levels of employees of access? How would you develop a procedure of level of access if you were developing a compliance program in the stock brokerage firm you work for?
There are many data sources that can help with KYC (Know Your Customer) procedures. Discuss where the line is drawn between KYC and the invasion of privacy. How do you develop a policy to investigate customers and prospects without crossing the line of confidentiality? How do you protect your clients and employees? Name th
AICPA and IIA have positioned the auditing professions to become assurance professions. 1. What's difference between assurance services, attestation services, auditing services? 2. What are the economic issues that drive the increased demand for assurance services? 3. What is one assurance engagement and one attestation engagement other than an audit of financial statements? 4. What are the differences between the two engagements?AICPA and IIA have positioned the auditing professions to become assurance professions. 1. What's difference between assurance services, attestation services, auditing services? 2. What are the economic issues that drive the increased demand for assurance services? 3. What is one assurance engagement and one attestation engagement other than an audit of financial statements? 4. What are the differences between the two engagements?
AICPA and IIA have positioned the auditing professions to become assurance professions. 1. What's difference between assurance services, attestation services, auditing services? 2. What are the economic issues that drive the increased demand for assurance services? 3. What is one assurance engagement and one attestation
A security analyst calculates the following ratios for two banks. How should the analyst evaluate the financial health of the two banks? Bank A Bank B ROE 22% 24% ROA 2% 1.5% Equity Multiplier 11X
See the attached file. 1) Carl's Custom Candles manufactures small batches of candles for local retail shops. Carl has established a relationship with 3 local shops, and needs to determine how many candle making machines to purchase. Details of the customers' order requirements are shown below. Analyze Carl's capacity require
Your great aunt Matilda put some money in an account for you on the day you were born. This account pays 8% interest per year. On your 21st birthday the account balance was $5,033.83. The amount of money that your great aunt Matilda originally put in the account is closest to: A. $1,200 B. $800 C. $600 D. $1,000
You take a loan on $500,000 for 30 years at the annual nominal interest rate of 6% compounded monthly. The loan installments also have to be paid monthly. The bank's APR is 6.7%. What is the amount of the fees the bank is charging you?
?What are the general principles of KYC (Knowing your customer)? ?Who should be verified, and what is meant by low risk and high risk when it comes to customers and products? Discuss at least three low risk and three high risk characteristics or types of each. ?When should it be done and how? Include the different data s
See attached file. The CEO of your organization has asked your Learning Team to analyze the companies listed in Problem BYP13-4, of Financial Accounting: Tools for Business Decision Making. Resources: Problem BYP13-4 (Ch. 13) of Financial Accounting: Tools for Business Decision Making; and Section 4.2 (Ch. 4) of Communicat
Hospitality Finance: What is ADR? How is it calculated? Which financial ratios are the most important to the hospitality organization?
1.) What is ADR? How is ADR calculated? Why is ADR important in the hospitality industry? Please explain answer. 2.) Which of the following financial ratios, occupancy, room sales to total sales, profit margin, or average daily rate (ADR), is the most important to a hospitality organization? Why?
See the attached file for additional data for Kodak. INCOME STATEMENT For Year Ended Dec. 31 (in million) 20x6 20x5 20x4 Net sales.............................................$13,234 $13,994 $14,089 Cost of good sold....................................8,670
The following are monthly percentage price changes for four market indexes. Month DJIA S&P 500 Russell 2000 Nikkel 1 0.03 0.02 0.04 0.04 2 0.07 0.06 0.10 -0.02 3 -0.02 -0.01 -0.04 0.07 4 0.01 0.03 0.03 0.02 5 0.
McDonnell Douglas Aircraft Corporation manufactures the C-17: Compute the actual break-even point for the C-17.
McDonnell Douglas Aircraft Corporation manufactures the C-17, the newest jet transport used by the U.S. Air Force. The company sells the C-17 for a "flyaway cost" of $175 million per jet. The variable production cost of each C-17. The variable production cost of each C-17 was estimated to be approximately $165 million. When the
How you would consider financial analysis. What are some of the characteristics of income statement, balance sheet and cash flow statement - from the perspective of the story told by each statement? How does accrual accounting come into play in statements? It is true that certain 'sets' of ratios tend to be used more by cre
see attachment 3. Factor Models. Suppose a factor model is appropriate to describe the returns on a stock. The current expected return on the stock is 10.5 percent. Information about those factors is presented in the following chart: Factor ? Expected Value
These questions are adapted from Fundamentals of Futures and Options Markets, 7th ed., John C. Hull. Chapter 4 The 6-month, 12-month, 18-month, and 24-month zero rates are 3.00%, 3.50%, 4.00%, and 4.50% with semi-annual compounding. Q I: What are the rates with continuous compounding? Q2: What is the forward rate fo