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Which of the following statements is FALSE? a) Potential benefits...

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Which of the following statements is FALSE? a) Potential benefits...

Which of the following statements is FALSE? a) Potential benefits from diversification arise when correlation is less than + I. b) If the correlation coefficient were 0, a zero variance portfolio could be constructed. c) If the correlation coefficient were -1, a zero variance portfolio could be constructed. d) The lower the correlation coefficient the greater the potential benefits from diversification. 169. The correlation between assets D and E is +.50. Asset D has a standard deviation of 40% and asset E has a standard deviation of 60%. What is the standard deviation of the portfolio if 40% is invested in asset D?

 

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The USPS operates a network of more than 31,000 post offices. The majority of these post offices do not generate revenues sufficiently high in relation to costs to justify keeping them in operation. If the USPS were truly a private firm, many of these post offices would be closed.

Until recently, what has enabled the USPS to keep these post offices operating in spite of their meager rates of profitability has been the receipt of an implicit subsidy in the form of protection from competition. The USPS is the only institution in the United States authorized to make regular deliveries of "non-urgent letters" to mailboxes of households, businesses, and government offices. Thus, the USPS faces no threat of being undersold by competitors in its primary business of delivering non-urgent mail.

In spite of these government protections of the USPS, the annual volume of mail handled by the USPS has fallen from 213 billion items per year in 2006 to about 165 billion items per year today. As a consequence, postage revenues at USPS have plummeted even as its labor expenses have remained nearly unchanged. Since 2007, the USPS has experienced average annual losses from its operations exceeding $7 billion per year.

What allows the USPS to continue operating without employee layoffs in spite of annual losses exceeding $120,000 per USPS worker per year? The answer is the sponsorship of U.S. taxpayers. The federal government continues lending funds to the USPS to enable it to keep providing the same level of services with an unchanged workforce. Few observers anticipate that the USPS will ever repay the loans, which likely will become explicit subsidies to this government-sponsored institution.

a. Why would a non-government-sponsored firm have difficulty remaining in operation incurring $7 billion in losses per year?

b. Why might a government-sponsored firm such as the USPS be more willing than a non-government-sponsored firm to agree to non-layoff contracts for workers?

 

Which of the following statements is most correct? a. One advantage of stock repurchases is that they are generally taxed more favorably than dividend payments. b. One advantage of dividend reinvestment plans is that they enable investors to avoid paying taxes on the dividends they receive. c. Stock repurchases make sense if a company is interested in increasing its equity ratio. d. Stock repurchases make sense if a company believes that its stock is overvalued and that it has a lot of profitable projects to fund over the next year. e. One advantage of an open market dividend reinvestment plan is that it increases the number of shares the company has outstanding. 121. Which of the following statements is most correct? a. One reason that companies tend to avoid stock repurchases is that dividend payments are taxed more favorably than stock repurchases. b. One advantage of dividend reinvestment plans is that they allow shareholders to avoid paying taxes on the dividends that they choose to reinvest. c. If a company announces a 2-for-1 stock split and the overall value of the firm remains unchanged, the company's stock price must have doubled. d. All of the statements above are correct. e. None of the statements above is correct. 122. Which of the following statements is most correct? a. The tax code encourages companies to pay dividends. b. If a company uses the residual dividend model to determine its dividend payout ratio, its dividend payout will tend to increase whenever it has a large number of investment opportunities. c. The clientele effect encourages companies to adopt a strict version of the residual dividend model. d. In many cases, stock repurchases tend to increase earnings per share, but they also increase the firm's debt ratio and financial risk. e. Stock repurchases are taxed the same way as dividends are taxed. 123. Which of the following statements is most correct? a. If a company puts in place a 2-for-1 stock split, its stock price should roughly double. b. Share repurchases are taxed less favorably than dividends; this explains why companies typically pay dividends and avoid share repurchases. c. On average, a company's stock price tends to rise when it announces that it is initiating a share repurchase program. d. Statements a and b are correct. e. All of the statements above are correct.

 

The graph of variable costs that behave in a curvilinear fashion will a. approximate a straight line within the relevant range b. be sharply kinked on both sides of the relevant range c. be downward sloping d. be a stair-step pattern 11. A mixed cost contains a. a variable cost element and a fixed cost element b. both selling and administrative costs c. both retailing and manufacturing costs d. both operating and non-operating costs 12. The variable costing method is also known as the a. direct costing method b. indirect costing approach c. absorption costing method d. period costing approach 13. The costing approach that charges all manufacturing costs to the product is referred to as a. variable costing b. contribution margin costing c. direct costing d. absorption costing 14. Variable costing is acceptable for a. financial statement purposes b. profit tax purposes c. internal use by management only d. profit tax purposes and for internal use by management 15. CVP analysis does not consider a. level of activity b. fixed cost per unit c. variable cost per unit d. sales mix 16. Which of the following is not an underlying assumption of CVP analysis? a. Changes in activity are the only factors that affect costs b. Cost classifications are reasonably accurate c. Beginning inventory is larger than ending inventory d. Sales mix is constant

 

 The entrepreneurial discovery process that involves finding a way to meet an existing demand by inventing new products from available resources is based on A. science. B. medicine. C. psychology. D. physics. 21. Dan is in the process of determining the types of computer software and telephone service that will best suit his new business and get it up and running. Dan is considering his business's A. financial constraints. B. technical needs. C. competitive advantage. D. staffing requirements. 22. Which of the following statements is true about business startup requirements: A. New business owners usually need to register for patent protection. B. The financial needs to start a new business depend on the nature of the venture. C. Purchasing a franchise is usually easy and inexpensive for startup business owners. D. Equipment is the least expensive requirement for a startup business. 23. Why is it important for entrepreneurs to talk with industry experts when developing new business concepts? A. The industry experts usually improve your management skills. B. The industry experts typically provide useful information. C. The industry experts commonly enhance your confidence. D. The industry experts frequently offer financial support

 

You were recently hired as the General Manager of a 12,500 seat sports and entertainment arena in New England.  The venue's primary tenants are a minor league hockey team and a Division I Men's Basketball team, however the venue also plays host to a number of concerts and family shows. The Board of Trustees has charged you with substantially increasing sponsorship revenues by a minimum of 50% in the next fiscal year, up from $750,000 in FY2018-19.  You have been told many current sponsors are not renewing their contracts, leaving you in a position to find new exclusive sponsors in the following four areas: automobile, alcoholic beverage company, non-alcoholic beverage or food brand, and clothing/apparel retailer.

Your immediate goal is to secure exclusive sponsors in these four categories.  Considering the Board of Trustees must approve every sponsorship deal, you must present a detailed rationale to justify why and how these sponsors align with the values and objectives of the arena.

You are responsible for the following:

Target one exclusive sponsor in each of the four categories listed above.
Using the 360 Degree Marketing Approach provide a detailed rationale as to why the companies you selected are the best option.  Please highlight the following areas within the 360 Degree Marketing Approach for EACH company/brand:
Overall company objectives and marketing objectives
Products and brands
Seasonality
Target Audience
Brand Awareness
Geography of Business

 

8. What do business employees often need to do before they are able to write proposals? A. Research the problem B. Analyze personal biases C. Contact the customer D. Evaluate technical skills 9. Which of the following is an example of a manager developing a policy that impacts customer relations: A. Increasing use of security devices B. Extending business hours on weekends C. Revising bookkeeping procedures D. Scheduling employees' work hours 10. What should a successful brand promise be able to do? A. Customize the product for each customer B. Clarify the company's processes C. Communicate an appealing benefit D. Convey a high-quality image 11. Which of the following is one way that freedom in a private enterprise system is limited by laws: A. Certain occupations must be licensed. B. All workers must take ability tests. C. Specific pay scales are regulated. D. Employees must register with the state. 12. During the month of July, sales at Handy's Shoe Mart totaled $2,500. The cost of the shoes was $1,025. The owner paid $866 for supplies, insurance, rent, and utilities during the month. The $609 left over represents the owner's A. net profit. B. gross profit. C. sales income. D. operating expenses. 13. Non-corporations are taxed as pass-through entities, meaning that A. profits and losses are claimed on owners' personal tax returns. B. they do not have to pay payroll taxes. C. their income tax rates are lower than those of corporations. D. they pay only state and local taxes. 14. Which of the following activities is an example of preparing before attempting to sell an idea: A. Explaining solutions to audience needs B. Determining the details of your idea C. Overcoming objections from the audience D. Affirming the audience's decision to "buy" 

 

Suppose a closed economy in steady state is hit by a viral outbreak (or pandemic). As a result a number of people get sick and some die. The government, concerned about the economy increases the amount of transfer payments they send to individuals and other spending. One result of this is the government budget deficit rises significantly & the level of accumulated net government debt jumps sharply. Some critics note that going forward the government budget deficit is expected to remain higher than before the pandemic. They also argue that this debt burden reduces the government's ability to deliver current services let alone allowing room for additional spending.

 

Use the Solow model to describe the impact to the steady state levels of output per effective worker and consumption per effective worker. Please also explain what impact this shock has on the growth rate of real output and output per worker in steady state.

Explain your reasoning in words and support your answer with one Solow model diagram that clearly labels the initial & new steady state locations.

 

 What is meant by the statement that many Less Developed Countries (LDCs) are subject to "dominance, dependence, and vulnerability" in their relations with rich cour:ltries. [15 marks] b) Describe the three basic components or core values of development. [15 marks] c) Explain why the Neo-Classical Growth theory suggests that without technological progress continuous growth of per capita income is not possible. 2 a) Why do some countries grow rapidly while other countries stagnate? Give three reasons. [5 marks] b) Explain the Harrod-Domar model, its applications and two limitations.  a) Explain how the 'Human Development Index' is used as a measure of a country's social and economic wellbeing. [10 marks] b) Identify the senses in which the Ranis-Fei model differs from the Lewis model. [10 marks] Question 5 a) Explain the meaning of coordination failure and how it might cause underdevelopment. [8 marks] b) Most development economists now seem to agree that the level and rate of GNP do not provide sufficient or even accurate measures of a country's development. What is the essence of their argument? Give some examples. 

 

Refer to the standard two-period model with endowments as in Chapter 9 (or our class notes). In summary: we have a representative household that lives for two periods. They enjoy consumptions in both periods (C1, C2), receive endowments for each period (Y1, Y2), with the relevant discounting for future and interest rates (β and r). Suppose, now we also have a government in this economy. This government collects a lump-sum tax each period as government revenue (T1 and T2) and borrows money from the household by issuing a bond (B). Note that lump sum tax just means that the government takes a chunk T from the HH's endowment. The government uses all its money to conduct necessary public spending each period (G1 and G2). In the end, the government just balances its budget:

Period 1: G1 = T1 + B

Period 2: G2 = T2 - (1+r)B

Hence, the intertemporal government budget balancing is (G1 + G2/(1+r) = T1 + B + T2/(1+r) - (1+r) B). We are still in a closed economy and no firms.

 

What's the lifetime objective function for the household? 
What's the period-by-period budget constraint for the household when they have to pay tax? 

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