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# Central Tendency

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### Yield curve

1) a. Suppose you are considering two possible investment opportunities, a 12-year Treasury bond and a 7-year, A-rated corporate bond. The current real risk-free rate is 4%. Inflation is expected to be 2% for the next two years, 3% for the following four years, and 4% thereafter. The maturity risk premium is estimated by this fo

### Payback and Internal Rate of Return

The management of Kitchen Shop is thinking of buying a new drill press to aid in adapting parts for different machines. The press is expected to save Kitchen Shop \$8,000 per year in costs. However, Kitchen Shop has an old punch machine that isn't worth anything on the market and that will probably last indefinitely. The new pres

### EOQ/Moving Averages/Trend Projections

Please assist our study group by correctly answering the following study questions: 1. Sensitivity analysis of EOQ refers to: a. the attitude of top management toward the use of the EOQ model b. an assessment of the impact of obsolescence upon the EOQ c. analysis of how much the EOQ will change when other variable c

### Forecasting

1. The annual demand for a product is 1,000 units. The company orders 200 units each time an order is placed. The lead-time is 6 days, and the company has determined that 20 unites should be held as a safety stock. There are 250 working days per year. What is the reorder point? a. 20 b. 24 c. 44 d. 120 2. Mark A

### Distribution of sample means. What is expected value of M and the standard error of M for a sample of n = 4 scores? How much error would you expect for a sample of n=100 scores? Sketch the distribution of sample means for samples of n=25 from this population. What proportion of the sample means for n=25 have values less than 80? In other words, find p(M<80) for n=25. Sketch the distribution of sample means for samples of n=25 scores from this population. Compute the z-score for M=84 for a sample of n=25 scores. Is this sample mean in the middle 95% of the distribution?

1. Briefly define each of the following: a. Distribution of sample means b. Expected value of M c. Standard error of M 2. For a sample selected from a population with a mean of µ=50 and a standard deviation of s= 10: a. What is expected value of M and the standard error of M for a sample of n = 4 scores? b. What is the

### Case Problem: "Forecasting Food and Beverage Sales"

The Vintage Restaurant is on Captiva Island, a resort community near Fort Myers, FL. The restaurant, which is owned and operated by Karen Payne, has just completed its third year of operation. During that time, Karen has sought to establish a reputation for the restaurant as a high-quality dining establishment that specializes i

### CAPM and Expected Return on Market Portfolio

CAPM and Expected return. If the risk-free rate is 6 percent and the expected rate of return on the market portfolio is 14 percent, is a security with a beta of 1.25 and an expected rate of return of 16 percent overpriced or under priced?

### Expected value of perfect information

The local operations manager for the IRS must decide whether to hire 1, 2, or 3 temporary workers. He estimates that net revenues will vary with how well taxpayers comply with the new tax code. low medium high # of workers compliance compliance compliance 1 50 50 50 2 100 60 20 3 150 70 -10 If he thinks the chances o

### Estimate the seasonal index

An analyst wants to use the ratio-to-moving average method to forecast a company's sales for the next few quarters. Beginning in Quarter 4 of 2003, the analyst collects the following sales data (in millions of dollars). Estimate the seasonal index associated with Quarter 2. Round your answer to at least three decimal places.

### Expected Value, Variance and Covariance of random variable

1. Say that E(X) = 10; and var(X) = 5. Find E(Y) and var(Y) in the following cases: a) Y = 0.37X - 3.79 b) Y = 0.37X + 5.73 c) Y = (3x^2+2)/4 d) Y = aX + b 2. Prove that: a) E(X^2) greater than equal to [E(X)]^2 (Hint: this follows immediately from the definition of the variance and from one of the properties of the v

### Comparing different forecasting methods and choosing the best

Emily Andrews has invested in a science and technology mutual fund. Now she is considering liquidating and investing i another fund. She would like to forecast the price of the science and technology fund for the next month before making a decision. She has collected the following data on the average price of the fund during th

### Comparing forecasting methods and choosing the best one

The Fastgro Fertilizer Company distributes fertilizer to various lawn and garden shops. The company must base its quarterly production schedule on a forecast of how many tons of fertilizer will be demanded from it. The company has gathered the following data for the past three years from its sales records. Year

### Find the value of p based on expected returns

2. If p is the probability of Event 1 and (1-p) is the probability of Event 2, based on the expected returns, for what values of p would you choose A? B? C? Values in the table are payoffs. Choice/Event Event 1 Event 2 A 0 20 B 4 16 C 8 0 (Here are some hints for solving this question, since it's somewhat chall

### Calculation of expected value, standard deviation and variance of a random variable

Given the following probability distributions: Distribution A Distribution B X P(X) X P(X) 0 0.50 0 0.05 1 0.20 1 0.10 2 0.15 2 0.15 3 0.10 3 0.20 4 0.05 4 0

### Compute the expected number of barrels that will be sold on Saturday.

The Ramshead Pub sells a large quantity of beer every Saturday. From the past sales records the pub has determined the following probabilities for sales. Compute the expected number of barrels that will be sold on Saturday. Barrels Probability 6 .10 7

### Quantitative Methods

The Ramshead Pub sells a large quantity of beer every Saturday. From the past sales records the pub has determined the following probabilities for sales. Compute the expected number of barrels that will be sold on Saturday. Barrels Probability 6 .10 7

### Determine the idle time costs for each alternative, and make a recommendation

1. You are asked to evaluate a manufacturing queuing problem. The higher priced mechanics always seem to be waiting on the lower priced tool crib clerks for necessary parts. The mechanics, at \$20.00 per hour wage, arrive randomly at the tool crib every 5 minutes. It takes the tool crib clerk, at \$10.00 per hour wage, an average

### Net present values, investment requirements, discount rates.

1. You just won the lottery and want to put some money away for your child's college education. College will cost \$65,000 in 18 years. You can earn 8% compounded annually. How much do you need to invest? Answer 2. You just won the lottery. You and your heirs will receive \$25,000 per year forever, beginning one year from now.

### Mean, Median for Owens Orchards apple data

Owens Orchards sells apples in a large bag by weight. A sample of seven bags contained the following numbers of apples: 23, 19, 26, 17, 21, 24, 22. 1. Compute the mean number and median number of apples in a bag. 2. Verify that S (X - X) = 0.

### Expected spot rate

One year interest rates are currently 3.30% in the U.S and 2.60% in "Euroland. The current spot rate between the euro and dollar is 1.3225/. What is the expected spot rate in one year if the international Fisher effect holds?

### What is the expected value of the number of small pills in the bottle after the last large pill has been chosen and its smaller half returned?

A bottle initially contains m large pills and n small pills. Each day a patient randomly chooses one of the pills. If a small pill is chosen, then that pill is eaten. If a large pill is chosen, then the pill is broken in two; one part is returned to the bottle for small pills and another part gets eaten. What is the exp

### Determination of expected value of a random variable

Harrington Health Food stocks 5 loaves of Neutro-Bread. The probability distribution for the sales of Neutro-Bread is listed in the following table. How many loaves will Harrington sell on average? Number of Loaves Sold Probability 0

### expected value of jointly distributed variables

See attached file for full problem description. No. 4 only If the joint density function of X and Y is given by f(x,y) = 2(x + 2y)/7, 0 <x < 1, 1 < y < 2 Find the expected value of g(X, Y) = x^2/Y^3 + XY^2

### Exponential Smoothing and Moving average technique

1. Given the following data on hotel check-ins for a 6-month period: July: 45 rooms August: 36 rooms September: 52 rooms October: 48 rooms November: 56 rooms December: 60 rooms With alpha = 0.2 and beta = 0.1, what is the adjusted exponentially smoothed forecast for September? Put your answer in the form xx.xx with no

### Transform and Compute command in SPSS

This is an SPSS data set of unemployment rates categorized by country, gender, and year. If I want to generate a table that shows the average unemployment rate between 1980-2002 categorized by country for just males, how would I do that? Please include directions of what you did in SPSS.

### H0, H1, Decision Rule and Decision

The South Carolina Real Estate Association claims that the median rental for three-bedroom condominiums in a metropolitan area is more than \$1,200 a month. To check this, a random sample of 149 units was selected. Of the 149, 5 rented for exactly \$1,200 a month, and 75 rented for more than \$1,200. At the .05 level can we conclud

### Beta, Risk Free Rate and Expected Return

Holup, Inc., makes pneumatic equipment. The beta of Holup's stock is 1.2. The expected market risk premium is 8.5 percent, and the current risk-free rate is 6 percent. Assume the capital-asset-pricing model holds. What is the expected return on Holup's stock?

### Decision making: Expected value

Suppose that a bakery specializes in chocolate cakes. Assume the cakes retail at \$18 per cake, but it takes \$8 to prepare each cake. Cakes cannot be sold after one week, and they have a negligible salvage value. It is estimated that the weekly demand for cakes is: 15 cakes in 15% of the weeks, 16 cakes in 25% of the weeks, 17 ca

### Expected value of a random variable problem

3. Let X be a discrete random variable with Pr {X = i} = ci for positive, even integers i <= 12; otherwise, the probability is zero, (a) Compute the value of c. (b) What is the mean of X? (c) What is the second moment of X? (d) What is the variance of X? (e) Compute E[(X ? 5)+] where x+ is defined to be max(x,0).

### Random variable and expected value

Random variable and expected value. See attached file for full problem description.