On the basis of a one factor model, consider a portfolio of two securities with the following characteristics : Security Factor Sensitivity Nonfactor risk proportion A .20 49 .40 B 3.50 100 .60 A) If the standard deviation of the factor is 15% , w
Given the following forward rates, calculate the one,two,three and four year spot rates: Forward time period ----- Forward rate f0,1 ------- 10.0% f1,2 ------- 9.5% f2,3 ------- 9.0% f3,4 ------- 8.5%
The one year spot rate is 9% and the two year spot rate is 7%. If the one year spot rate expected in one year is 4.5%, according to the liquidity preference theory, what must be the one year liquidity premium commencing one year from now?
Describe Starbucks' key success factors.
Big Apple, Inc., has no debt outstanding and a total market value of $80,000. Earnings before interest and taxes, EBIT, are projected to be $10,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 30% higher. If there is a recession, then EBIT will be 60% lower. Big Apple is c
A certain production line makes two products. Relevant data has been collected as indicated below. total time available (for production & setup) each week is 80 hours. The firm has no inventory of either product at the start of week 1 and no inventory is allowed at the end of week 4. The cost of carrying a unit of inventory fr
Three of the most common measures of forecast accuracy are: mean error, mean square error, and mean absolute percentage error. Briefly describe the circumstances when you think each might be the most appropriate measure for selecting the 'best' trend curve.