chapter15答案

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Chapter15干洗

Chapter15干洗
Living English
Part Ⅳ
Situation Dialogue 2
Things: a pair of trousers Ways: dry cleaned Time: by next Monday
pants
Making short dialogues
C: I want this shirt dry-cleaned. Can you get this stain out (off ……)? S: All right. I think it’ll come off. C: When can I pick ……up? S: How about ……? C: Will you iron it for me? S: Yes, of course. In fact, we’ll deliver to your home after dry cleaning. C: Great!
dry cleaner
iron
detergent
washing machine
handwash
care label
hanger
dry clean
2.dry cleaner’s
A
3. Washing machine
C
5.iron
B
Match
F E D
6.stain
1.trousers
4.coat
Guess
Do you know how it should be cleaned?
hand wash
machine washable
dry clean
Pair work
Conversation
S: All right.

Chapter_15 The Demand for Money(宏观经济学,多恩布什,第十版)

Chapter_15 The Demand for Money(宏观经济学,多恩布什,第十版)


The more money a person holds, the less likely he or she is to incur the costs of illiquidity

The more money a person holds, the more interest he/she will give up → similar tradeoff encountered with transactions demand for money
4.

Standard of deferred payment
Money units are used in long term transactions (ex. loans)
15-5
The Demand for Money: Theory

The demand for money is the demand for real money balances → people hold money for its purchasing power

As liquidity of an asset decreases, the interest yield increases

A typical economic tradeoff: in order to get more liquidity, asset holders have to sacrifice yield


At the end of 2005, M1 = $4,596 per person Debate whether broader measure, M2, might better meet the definition of money in a modern payment system

克鲁格曼第八版-国际金融下答案Chap15

克鲁格曼第八版-国际金融下答案Chap15

Chapter 15Price Levels and the Exchange Ratein the Long RunChapter OrganizationThe Law of One PricePurchasing Power ParityThe Relationship Between PPP and the Law of One PriceAbsolute PPP and Relative PPPA Long-Run Exchange-Rate Model Based on PPPThe Fundamental Equation of the Monetary ApproachOngoing Inflation, Interest Parity, and PPPThe Fisher EffectEmpirical Evidence on PPP and the Law of One PriceBox: Some Meaty Evidence on the Law of One PriceExplaining the Problems with PPPTrade Barriers and NontradablesDepartures from Free CompetitionDifferences in Consumption Patterns and Price Level MeasurementPPP in the Short Run and in the Long RunBox: Sticky Prices and the Law of One Price: Evidence From Scandinavian Duty-free ShopsCase Study: Why Price Levels are Lower in Poorer CountriesBeyond Purchasing Power Parity: A General Model of Long-Run Exchange RatesChapter 15 Price Levels and the Exchange Rate in the Long Run 71The Real Exchange RateDemand, Supply, and the Long-Run Real Exchange RateNominal and Real Exchange Rates in Long-Run EquilibriumInternational Interest Rate Differences and the Real Exchange RateReal Interest ParitySummaryAppendix: The Fisher Effect, the Interest Rate, and the Exchange Rate under the Flexible-PriceMonetary Approach72 Krugman/Obstfeld •International Economics: Theory and Policy, Eighth EditionChapter OverviewThe time frame of the analysis of exchange rate determination shifts to the long run in this chapter. An analysis of the determination of the long-run exchange rate is required for the completion of the short-run exchange rate model since, as demonstrated in the previous two chapters, the long-run expected exchange rate affects the current spot rate. Issues addressed here include both monetary and real-side determinants of the long-run real exchange rate. The development of the model of the long-run exchange rate touches on a number of issues, including the effect of ongoing inflation on the exchange rate, the Fisher effect, and the role of tradables and nontradables. Empirical issues, such as the breakdown of purchasing power parity in the 1970s and the correlation between price levels and per capita income, are addressed within this framework.The law of one price, which holds that the prices of goods are the same in all countries in the absence of transport costs or trade restrictions, presents an intuitively appealing introduction to long-run exchange rate determination. An extension of this law to sets of goods motivates the proposition of absolute purchasing power parity. Relative purchasing power parity, a less restrictive proposition, relates changes in exchange rates to changes in relative price levels and may be valid even when absolute PPP is not. Purchasing power parity provides a cornerstone of the monetary approach to the exchange rate, which serves as the first model of the long-run exchange rate developed in this chapter. This first model also demonstrates how ongoing inflation affects the long-run exchange rate.The monetary approach to the exchange rate uses PPP to model the exchange rate as the price level inthe home country relative to the price level in the foreign country. The money market equilibrium relationship is used to substitute money supply divided by money demand for the price level. TheFisher relationship allows us to substitute expected inflation for the nominal interest rate. The resulting relationship models the long-run exchange rate as a function of relative money supplies, the inflation differential and relative output in the two countries;E (M/M *) l(p e–p*e, (Y*/Y))The l function represents the ratio of foreign to domestic money demand; thus, both the difference in expected inflation rates and the output ratio enter the function with aChapter 15 Price Levels and the Exchange Rate in the Long Run 73positive sign. An increase in inflation at home means higher home interest rates (through the Fisher equation) and lower home money demand. An increase in foreign output raises foreign money demand.One result from this model that students may find initially confusing concerns the relationship between the long-run exchange rate and the nominal interest rate. The model in this chapter provides an example of an increase in the interest rate associated with exchange rate depreciation. In contrast, the short-run analysis in the previous chapter provides an example of an increase in the domestic interest rate associated with an appreciation of the currency. These different relationships between the exchange rate and the interest rate reflect different causes for the rise in the interest rate as well as different assumptions concerning price rigidity. In the analysis of the previous chapter, the interest rate rises dueto a contraction in the level of the nominal money supply. With fixed prices, this contraction of nominal balances is matched by a contraction in real balances. Excess money demand is resolved through a rise in interest rates which is associated with an appreciation of the currency to satisfy interest parity. In this chapter, the discussion of the Fisher effect demonstrates that the interest rate will rise in response to an anticipated increase in expected inflation due to an anticipated increase in the rate of growth of the money supply. There is incipient excess money supply with this rise in the interest rate. With perfectly flexible prices, the money market clears through an erosion of real balances due to an increase in the price level.This price level increase implies, through PPP, a depreciation of the exchange rate. Thus, with perfectly flexible prices (and its corollary PPP), an increase in the interest rate due to an increase in expected inflation is associated with a depreciation of the currency.74 Krugman/Obstfeld •International Economics: Theory and Policy, Eighth EditionEmpirical evidence presented in the chapter suggests that both absolute and relative PPP perform poorly for the period since 1971. Even the law of one price fails to hold across disaggregated commodity groups. The rejection of these theories is related to trade impediments (which help give rise to nontraded goods and services), to shifts in relative output prices and to imperfectly competitive markets. Since PPPserves as a cornerstone for the monetary approach, its rejection suggests that a convincing explanationof the long-run behavior of exchange rates must go beyond the doctrine of purchasing power parity. The Fisher effect is discussed in more detail and accompanied by a diagrammatic exposition in an appendix to the chapter.A more general model of the long-run behavior of exchange rates in which real-side effects are assigned a role concludes the chapter. The material in this section drops the assumption of a constant real exchange rate, an assumption that you may want to demonstrate to students is necessarily associated with the assumption of PPP. Motivating this more general approach is easily done by presenting students with a time series graph of the recent behavior of the real exchange rate of the dollar which will demonstrate large swings in its value. The real exchange rate, q, is the ratio of the foreign price index, expressed in domestic currency, to the domestic price index, or, equivalently, E q (P/P *). The chapter includes an informal discussion of the manner in which the long-run real exchange rate, q, is affected by permanent changes in the supply or demand for a country’s products.Answers to Textbook Problems1. Relative PPP predicts that inflation differentials are matched by changes in theexchange rate.Under relative PPP, the franc/ruble exchange rate would fall by 95 percent withinflation rates of 100% in Russia and 5% in Switzerland.Chapter 15 Price Levels and the Exchange Rate in the Long Run 752. A real currency appreciation may result from an increase in the demand fornontraded goodsrelative to tradables which would cause an appreciation of the exchange rate since the increase inthe demand for nontradables raises their price, raising the domestic price level and causing the currency to appreciate. In this case exporters are indeed hurt, as one can see by adapting the analysis in Chapter 3. Real currency appreciation may occur for different reasons, however, with different implications for exporters’ incomes. A shift in foreign demand in favor of domestic exports will both appreciate thedomestic currency in real terms and benefit exporters. Similarly, productivity growth in exports is likely to benefit exporters while causing a real currency appreciation. If we consider a ceterus paribus increase in the real exchange rate, this is typically bad for exporters as their exports are now more expensive to foreigners which mayreduce foreign export demand. In general, though, we need to know why the real exchange rate changed to interpret the impact of the change.3. a. A tilt of spending towards nontraded products causes the real exchange rate toappreciate as the price of nontraded goods relative to traded goods rises (thereal exchange rate can be expressed as the price of tradables to the price ofnontradables).b. A shift in foreign demand towards domestic exports causes an excess demandfor the domestic country’s goods which causes the relative price of these goods to rise; that is, it causes the real exchange rate of the domestic country toappreciate.4. Relative PPP implies that the pound/dollar exchange rate should be adjusted tooffset the inflation difference between the United States and Britain during the war.Thus, a central banker might compare the consumer price indices in the UnitedStates and the U.K. before and after the war. If America’s price level had risen by 10%, while that in Britain had risen by 20%, relative PPP would call for apound/dollar exchange rate 10% higher than before the war—a 10% depreciation of the pound against the dollar.76 Krugman/Obstfeld •International Economics: Theory and Policy, Eighth EditionA comparison based only on PPP would fall short of the task at hand, however, if itignoredpossible changes in productivity, productive capacity, or in relative demands for goods producedin different countries in wake of the war. In general, one would expect largestructural upheavalsas a consequence of the war. For example, Britain’s productivity might have fallen dramatically asa result of converting factories to wartime uses (and as a result of bombing). Thiswould call for a real depreciation of the pound, that is, a postwar pound/dollarexchange rate more than 10% higher than the prewar rate.5. The real effective exchange rate series for Britain shows an appreciation of thepound from 1977 to 1981, followed by a period of depreciation. Note that theappreciation is sharpest after the increasein oil prices starts in early 1979; the subsequent depreciation is steepest after oil prices soften in 1982. An increase in oil prices increases the incomes received by British oil exporters, raising their demand for goods. The supply response of labor moving into the oil sector is comparable to an increase in productivity which also causes the real exchange rate to appreciate. Of course, a fall in the price of oil has opposite effects. (Oil is not the only factor behind the behavior of the pound’s real exchange rate. Instructors may wish to mention the influence of Prime MinisterMargaret Thatcher’s stringent monetary policies.)6. A permanent shift in the real money demand function will alter the long-runequilibrium nominal exchange rate, but not the long-run equilibrium real exchange rate. Since the real exchange ratedoes not change, we can use the monetary approach equation, E (M/M *) {L(R*, Y*)/L(R, Y)}.A permanent increase in money demand at any nominal interest rate leads to aproportional appreciation of the long-run nominal exchange rate. Intuitively, the level of prices for any level of nominal balances must be lower in the long run for money market equilibrium. The reverse holdsfor a permanent decrease in money demand. The real exchange rate, however,depends upon relative prices and productivity terms which are not affected bygeneral price-level changes.Chapter 15 Price Levels and the Exchange Rate in the Long Run 777. The mechanism would work through expenditure effects with a permanent transferfrom Polandto the Czech Republic appreciating the koruna (Czech currency) in real terms against the zloty(Polish currency) if (as is reasonable to assume) the Czechs spent a higher proportion of theirincome on Czech goods relative to Polish goods than did the Poles.8. As discussed in the answer to Question 7, the koruna appreciates against the zloty inreal terms with the transfer from Poland to the Czech Republic if the Czechs spend a higher proportion of their income on Czech goods relative to Polish goods than did the Poles. The real appreciation would lead to a nominal appreciation as well.9. Since the tariff shifts demand away from foreign exports and toward domestic goods,there is a long-run real appreciation of the home currency. Absent changes inmonetary conditions, there is along-run nominal appreciation as well.10. The balanced expansion in domestic spending will increase the amount of importsconsumed in the country that has a tariff in place, but imports cannot rise in thecountry that has a quota in place. Thus, in the country with the quota, there would be an excess demand for imports if the real exchange rate appreciated by the same amount as in the country with tariffs. Therefore, the real exchange rate in the country with a quota must appreciate by less than in the country with the tariff.11. A permanent increase in the expected rate of real depreciation of the dollar againstthe euro leads to a permanent increase in the expected rate of depreciation of the nominal dollar/euro exchange rate, given the differential in expected inflation rates across the U.S. and Europe. This increase in the expected depreciation of the dollar causes the spot rate today to depreciate.78 Krugman/Obstfeld •International Economics: Theory and Policy, Eighth Edition12. Suppose there is a temporary fall in the real exchange rate in an economy, that is,the exchangerate appreciates today and then will depreciate back to its original level in the future.The expected depreciation of the real exchange rate, by real interest parity, causes the real interest rate to rise. If there is no change in the expected inflation rate, then the nominal interest rate rises with the rise in the real exchange rate. This event may also cause the nominal exchange rate to appreciate if the effect of a currentappreciation of the real exchange rate dominates the effect of the expecteddepreciation of the real exchange rate.13. International differences in expected real interest rates reflect expected changes inreal exchange rates. If the expected real interest rate in the United States is 9% and the expected real interest rate in Europe is 3%, then there is an expectation that the real dollar/euro exchange rate will depreciate by 6% (assuming that interest parity holds).14. The initial effect of a reduction in the money supply in a model with sticky prices isan increasein the nominal interest rate and an appreciation of the nominal exchange rate. The real interest rate, which equals the nominal interest rate minus expected inflation, rises by more than the nominal interest rate since the reduction in the money supply causes the nominal interest rate to rise, and deflation occurs during the transition to the new equilibrium. The real exchange rate depreciates during the transition to the new equilibrium (where its value is the same as in the original state).This satisfies the real interest parity relationship which states that the differencebetween the domestic and the foreign real interest rate equals the expecteddepreciation of the domestic real exchange rate—in this case, the initial effect is an increase in the real interest rate in the domestic economy coupled with an expected depreciation of the domestic real exchange rate. In any event,the real interest parity relationship must be satisfied since it is simply a restatement of the Fisher equation, which defines the real interest rate, combined with theinterest parity relationship, whichis a cornerstone of the sticky-price model of the determination of the exchange rate.Chapter 15 Price Levels and the Exchange Rate in the Long Run 7915. One answer to this question involves the comparison of a sticky-price with a flexible-price model.In a model with sticky prices, a reduction in the money supply causes the nominal interest rate torise and, by the interest parity relationship, the nominal exchange rate to appreciate.The real interest rate, which equals the nominal interest rate minus expectedinflation, increases both because of the increase in the nominal interest rate andbecause there is expected deflation. In a model with perfectly flexible prices, anincrease in expected inflation causes the nominal interest rate to increase (while the real interest rate remains unchanged) and the currency to depreciate since excess money supply is resolved through an increase in the price level and thus, by PPP, a depreciation of the currency.An alternative approach is to consider a model with perfectly flexible prices. Asdiscussed in the preceding paragraph, an increase in expected inflation causes the nominal interest rate to increase and the currency to depreciate, leaving theexpected real interest rate unchanged. If there is an increase in the expected real interest rate, however, this implies an expected depreciation of the real exchange rate. If this expected depreciation is due to a current, temporary appreciation, then the nominal exchange rate may appreciate if the effect of the current appreciation (which rotates the exchange rate schedule downward) dominates the effect due to the expected depreciation (which rotates the exchange rate schedule upward).16. If long term rates are higher than short term rates, it suggests that investors expectinterest rates to be higher in the future, that is why they demand a higher rate of return on a longer bond. If they expect interest rates to be higher in the future, they are either predicting higher inflation in the future or a higher real interest rate. We cannot tell which by simply looking at short and long rates.80 Krugman/Obstfeld •International Economics: Theory and Policy, Eighth Edition17. If we assume that the real exchange rate is constant, then the expected percentagechange in the exchange rate is simply the inflation differential. As the question notes, this relationship holds better over the long run. Starting from interest parity, we see that R R * %∆e E. The change in the exchange rate is π–π* when PPP holds, so if PPP holds over a horizon, we can say that R R *π–π*. This means r r*. So, real interest rate differentials at long maturities should be smaller.On the other hand, if the real exchange rate changes or is expected to change, we would say that %∆e E %∆e qπ–π*. In that case, there can be a significant wedge between r and r*. Thus, ifPPP does hold over the long run and people predict this (and consequently are not expecting large changes in the real exchange rate), we would expect to see smaller real interest rate differentials at long maturities.18. If markets are fairly segmented, then temporary moves in exchange rates may leadto wide deviations from PPP even for tradable goods. In the short run, firms may not be able to respondby opening up new trading relationships or distribution channels. On the other hand, if there are persistent deviations from PPP of tradable goods, we would expect firms to try to increase their presence in the high-price market. If they do this, it should reduce prices there and bring pricesback towards PPP.19. PPP for non-tradables would arise if technologies were similar across countries, andthus similar prices for goods in the long run would be consistent with competitive markets and similar labor costs. If the labor costs are similar, then (again assuming similar technologies) the costs of non-tradables should be similar also. Of course, as the chapter notes, differences in productivity thatvary across sector could result in Balassa Samuelson style effects where despitetradables PPP holding, non-tradables are still priced differently across countries.。

FFM(11版) 部分章节答案

FFM(11版) 部分章节答案

Fundamentals of Financial ManagementEleventh Edition SOLUTIONS TO PROBLEMSCONTENTSCHAPTER4 The Valuation of Long-Term Securities CHAPTER5Risk and ReturnCHAPTER15Required Returns and the Cost of Capital CHAPTER16Operating and Financial Leverage CHAPTER17Capital Structure DeterminationCHAPTER18Dividend PolicyCHAPTER41. Price per bond $907.102. Price per bond $904.303. Current price: p0=$80.00Later price: p0=$66.67The price drops by $13.334. Rate of return = 20%5. Present value of stock V=$22.636. a) $37.5b) $30.00c) $37.50Either the present strategy (a) or strategy (c) both result in the same market price per share.7. a) 8 percentb) YTC= 9.64 percentwe solve for YTC by computer8. V=$759. V=$689.4110. a) g = 0.05b) expected dividend yield = 0.07c) expected capital gains yield =g= 0.0511. a) semiannual yield = 0.0402b) 0.0804c) effective annual yield = 0.082012. a) trying a 4 percent semiannual YTM as a starting point for a trial-and-error approach, we getP0 = $ 1,067.55Since $1,067.55 is less than $1,120, we need to try a lower discount rate, say 3 percentP0 = $ 1,223.47To approximate the actual discount rate, we interpolate between 3 and 4 percent,X =0.0066In addition, semiannual YTM= 0.03 +0.0066 = 0.0366, or 3.66 percent. (The use of a computer provides a precise semiannual YTM figure of 3.64 percent.)b) semiannual YTM * 2 = nominal YTMnominal YTM = 0.0732C) effective annual YTM = 0.075413. a) old Chicago’s 12-year bonds should show a greater price change than Red Frog’s bonds. With everything, the same except for maturity, the longer the maturity, the greater the price fluctuation associated with a given change in market required return. The closer in time that you are to the relatively large maturity value being realized, the less important are interest payments in determining the market price, and the less important is a change in market required return on the market price of the security.b) Red Frog:P0 = $1,041Old Chicago:P0 = $1,086.14Old Chicago’s price per bond changes by ($1,086.14-$1,000=$86.14, while Red Frog’s price per bond changes by less than half that amount, or ($1,041-$$1,000) =$4114. a) $36.67b) $31.14c) $44.40CHAPTER 51. a) The standard deviation is 11.36%b) There is a 30 percent probability that the actual return will be zero (prob. E(R) =0 Is 20%) or less (prob. E(R) < is 10%)also, by inspection we see that the distribution is skewed to the left.2. a) For a return that will be zero or less, standardizing the deviation from the expected value of return we obtain (0%-20%)/15%=-1.333 standard deviations. Turning to Table V at the back of the book, 1.333 falls between standard deviations of 1.30 and 1.35. These standard deviations correspond to areas under the curve of 0.0968 and 0.0885 respectively. This means that there is approximately a 9% probability that actual return will be zero or less. (Interpolating for 1.333, we find the probability to be 9.13%)b) 10 percent: Standardized deviation (10%-20%)/15%= -0.667.probability of 10 percent or less return = (approx.) 25 percent.Probability of 10 percent or more return =75 percent.20 percent: 50 percent probability of return being above 20 percent.30 percent: standardized deviation = (30%-20%)/15%=0.667. Probability f 30 percent or more return = (approx.) 25 percent.40 percent: standardized deviation = 1.333probability of 40 percent or more return= (approx.) 9 percent50 percent: Standardized deviation =2.00Probability of 50 percent or more return = 2.28 percent3. The beta is approximately 0.5. This indicates that excess returns for the stock fluctuate less than excess returns for the market portfolio. The stock has much less systematic risk than the market asa whole. It would be a defensive investment.4. Req. (R A) =0.16Req. (R B ) =0.13Req. (R C ) =0.106Req. (R D ) =0.190Req. (R E) =0.1485. Expected return =0.15387. a) Selena’s expected return is 0.1602.b) The expected return on Selena’s portfolio increases to 16.82 percent, because the additional funds are invested in the highest expected return stock.8. Required return =0.154Assuming that the perpetual dividend growth model is appropriate, we get V=$45.459. A) the beta of a portfolio is simply a weighted average of the betas of the individual securities that make up the portfolio.The portfolio beta is 1.115b) Expected portfolio return = 14.69% or 0.1469Solution to Appendix A problem10. E (Rp) =0.121The standard deviation of the portfolio equals to 0.00856Chapter 15Thus, K0 = Ki B/(B+S)+ Ke S/(B+S)2. Ki =8.4 percentKe = 18.14 percentK0 = 15.22 percent3. (January 20x1) K e =21 percent(January 20x2) P0=$57.54. Ke = 12.24 percentFlotation costs of stock = $30,000Total Flotation cost = 34,000NPV= $90,000/0.145-$600,000-$34,000 = -$13,310The proposal should be rejected. Without flotation costs, however, the net present value would have been positive and the proposal acceptable.7. a) cost of equity = 19.68 percentCost of debt = 8 percentWeighted-average required return for the project = 15 percentb) The approach assumes that unsystematic risk is not a factor of importance, which may or may not be the case. It assumes also that the average beta for the oil drilling equipment companies is a good surrogate for the systematic risk of the prospect. Finally, the estimates of the likely return on stocks in general and of the risk-free rate must be accurate. If these assumptions hold, the figure obtained will be a realistic estimate of the project’s required rate of return.8. a) Required Return =15.5 percentb) Minimum Required Return = 15 percentMaximum Required Return = 17 percentc) Expected value of required rate of return = 15.85 percent9. Using the RADR approach we would calculate the project’s net present value at theproject’s IRR and compare it to the RADR, which we would use as a hurdle rate. In this case, the project’s IRR of 13.17 percent is less than the RADR of 15 percent, so we would , once again, reject the project.Solution to Appendix A Problem:11.a. Adjusted beta of 1.45 is appropriate for the new venture if the assumptions of the capital-asset pricing model hold, except for corporate taxes.b. K0= 14.6 percentSolution to Appendix B Problem12. a) APV= $7,550The project is acceptable.b) APV =$180The project is acceptable. ----BUT , barely.Chapter 161. a) FC=$180,000b) Q BE = 3,600 unitsS BE = $ 720,000c) DOL 4,000units =10.DOL 4,400units = 5.5DOL 4,800units = 4.0DOL 5,200units = 3.25DOL 5,600units = 2.8DOL 6,000units = 2.52. a) Q BE = 1,800 unitsb) Q BE = 3,200 unitsc) Q BE = 4,000 units3. a) Q BE = 15 horsesb) EBIT = $ 2,000b.The intercepts on the horizontal axis for the four plans are $0, $240,000, $400,000 and $700,000 respectively.c. Plan #1 dominates up to $800,000 in EBIT, Plan #3 from $800,000 to $1,150,000 in EBIT, and Plan #4 after $1,150,000 in EBIT. The best plan depends upon the likely level of EBIT and the likelihood of falling below an indifference point.5. EPS of present Capital structure , plan #1, plan#2, plan#3, plan#4 is $4.40, $2.93,$3.20,$2.30,$3.04, respectively. (ooo omitted)EBIT 1,2=840,000 Above 840,000 in EBIT , debt is more favorable ; below 840,000 in EBIT, common stock is more favorable.EBIT 1,3=1,380,000 Above 1,380,000 in EBIT, Plan 3 is more favorable; below it plan 1 is more favorable.EBIT1,4=840,000 ,Above it in EBIT Plan 4 is more favorable; below 840,000 plan 1 is more favorable.For plan 2 versus plan 3 comparison , the bond alternative dominates the preferred alternative by $0.9 per share throughout all levels of EBIT.For the Plan 2 versus plan 4 comparison, the indifference point is again $840,000 in EBIT.For the plan3 versus plan4 comparison, the indifference point is 1,740,000.6.a) The level of expected EBIT is only moderately above the indifference point of 840,000. Moreover, the variance of possible outcomes is great and there is considerable probability that the actual EBIT will be below the indifference point. A two-thirds probability corresponds to one standard deviation on either side of the mean of a normal distribution. If the distribution is approximately normal, the standardized difference from the mean to the indifference point is -0.4 looking at a normal distribution table found in most any statistics text, we find that this corresponds to a 34.5 percent probability that actual EBIT will be below 840,000. while the choice of alternatives depends upon one’s risk preferences, the level and variability of EBIT point to the “all-common stock” alternative.b) Here the level of expected EBIT is significantly above the indifference point and the variability is less. IF the distribution is approximately normal ,. The standardized difference from the mean to the indifference point is -3.3the probability of actual EBIT falling below the indifference point is negligible . The situation in this case favors the all bond alternative.7. (000 omitted)a) EPS for common \ debt \ preferred is $2.5 、$2.75、$2.62 respectivelyb) EPS for common \ debt \ preferred is $1.06、$0.98、$0.85 respectively ( EBIT =3 million)EPS for common \ debt \ preferred is $1.54、$1.57、$1.44 respectively ( EBIT =4 million) EPS for common \ debt \ preferred is $3.47、$3.93、$3.80 respectively( EBIT =8 million) c) EPS for common \ debt \ preferred is $2.08、$2.28、$2.10 respectivelyEPS for common \ debt \ preferred is $2.50、$2.84、$2.75 respectivelyEPS for common \ debt \ preferred is $2.76、$2.75、$2.62 respectively8. Boehm-GAO : Interest Coverage= 3.13Debt-service = 1.01Northern California: Interest Coverage= 2.22Debt-service = 1.00The question of with which company one feels more comfortable depends on the business risk Inasmuch as an electric utility has stable cash flows and Northern California is large. THE fact that the debt service coverage ratio is 1.0 means that some of the debt will probably have to be renewed or “ rolled over” at maturity. However, this is typical for an electric utility.The supermarket is likely to have the highest portion of total debt in the form of accounts payable, a short-term liability, because purchases make up a large portion of total costs. Therefore, we would expect it to have the greatest disparity between the two debt ratios. The airline would be expected to have the highest debt ratio, most of which is long-term debt used to finance aircraft. Here the ratio of total debt to total assets is slightly less than the ratio of long- term debt to total capitalization. An apparel maker will have a sizeable amount of accounts payable , but will also have some long-term debt used to finance fixed assets. Finally, the chemical company is determined largely by elimination. Such a company has current liabilities, but relies heavily on long-term debt to finance fixed assets.CHAPTER 171. A) Total value of firm: $ 88,800,000Implied overall capitalization rate: 0.1126126b) Total value of the firm: $88,800,000Implied overall capitalization rate: 0.134352. a) 1) sell your Gottahave stock for $22,500.2) Borrow $20,000 at 12 percent interest. This personal debt is equal to 1 percent of Gottahave debt.3) Buy 1 percent of the stock of the Wannabee Company for $40,000 and still have $22,500 +$20, 00-$40,000= $ 2,500 left over for other investments.Return on investment in Wannabee $6,000Less: interest paid $2,400Net return: $3,600Your net dollar return $3,600, is the same as it was for your investment in Gottahave. However, your personal cash outlay of $20,000($40,000 less personal borrowings of $20,000) is $2,500 less than your previous $22,500 investment in Gottahave.b) When there is no further opportunity for employing fewer funds and achieving the same total dollar return the arbitrage process will cease. At this point, the total value of the two firms must be the same, as must their average costs of capital.3. a) $400,000 in debt. The market price per share of common stock is highest at this amount of financial leverage.b) Omittedc) Yes, The optimal capita structure – the one possessing the lowest overall cost of capital --- involves $400,000 in debt.b) $ 1,200,000c) Value of all-equity financed firm = 3,000,000V alue of recapitalized firm = $4,200,0005. The optimal amount of debt would be $5 million6. a) Without bankruptcy cost, the optimal capital structure is 40% equity when K0 = 0.091b) With bankruptcy cost, the optimal capital structure is 60% equity when K0 = 0.0967. According to the notion of asymmetric information between management and investors, the company should issue the overvalued security, or at least the one that is not undervalued in its mind. This would be debt in the situation described in the problem. Investors would be aware of management’s likely behavior and would view the event as” good news.” The stock price might rise, all other things the same, if this information was not otherwise conveyed.In contrast, if the common stock were believed to be overvalued, management would want to issue common stock. This assumes it wishes to maximize the wealth of existing stockholders. Investors would regard this announcement as “bad news,”and the stock price might decline. Information effects through financing assume that the information is not otherwise known by the market Management usually has a bias in thinking that the common stock of the company is undervalued.CHAPTER 182. a) Dividends =$500,000b) Dividends =0c) Dividends =0 Company should raise an additional $1 million through a new issue of common stock if a capital budgeting analysis ( in which flotation costs are treated as outlays) proves favorable.3. a) Low dividend-payout ratio. Highly taxed owners will probably want to realize their returns through capital gains.b) Low dividend-payout ratio. There will be no residual funds.c) Medium or high dividend-payout ratio. There are likely to be funds left over after funding capital expenditures. Moreover, the liquidity and access to borrowing give the company considerable financial flexibility.d) Medium or high dividend-payout ratio. Unless the company cuts its dividend, which probably is unlikely in the short run, its dividend-payout ratio will rise with the drop in earnings.e) Low dividend-payout ratio. The company will probably wish to retain earnings to build its financial strength in order to offset the high business risk.4. We would expect Jumbo to have the higher dividend-payout ratio. As a percent of expectedJumbo has a lower relative standard deviation of cash flow, lower relative capital expenditures, lower relative long-term debt, and greater relative unused bank lines. Its expected capital expenditures are less than its expected cash flow, which would imply residual funds, whereas the opposite occurs for Giant. Finally, Giant has a higher cost associated with floating common stock in order to replace dividends than dos Jumbo. For all of these reasons, we would expect Jumbo to have a higher dividend payout. The only factor working in the other direction is the fact that Giant has a higher relative as well as absolute level of liquidity.5. a) The market seems to evaluate both of these stocks in terms of dividend payments. The average dividend for both firms is approximately the same. Nevertheless, the average market price of Harpo ( about $ 4.38) has been about 13% higher than the average market price for Oprah ( about $3.88) The market has capitalized the dividends of Oprah at a higher rate than Harpo, hence giving the stock of Oprah a lower price. This might result from the constant dividend-payout ratio policy of Oprah, which has produced a volatile dividend stream.b) Neither of these companies seems to be a growth company. In fact, one would wonder whether the retention of earnings is justified for either company. Since both of these firms appear to be evaluated in terms of dividend yield, increased stock prices might ensue from higher dividend payouts.6. a) $50b) 200 sharesc) $40d) Before: $8,000After: $8,000The stock dividend in itself does not affect the value of the company.e) The stock dividend would likely to be regarded as a positive signal and the total value of your holdings would increase.b) $0.3; $ 0.15c) $ 0.2913 $0.1456d) $4.854c.9. a) 27,778 sharesb) If taxes are ignored, it should make little difference other than perhaps if there is a difference in the information content of cash dividends and the information content of the repurchase of stock.c) Taxes create an incentive for repurchase, for the reasons illustrated in the chapter; however, the Internal Revenue Service will challenge a steady program of repurchase in lieu of dividends.。

公司理财精要版原书第12版习题库答案Ross12e_Chapter15_TB

公司理财精要版原书第12版习题库答案Ross12e_Chapter15_TB

Fundamentals of Corporate Finance, 12e (Ross)Chapter 15 Raising Capital1) Business Aid is funded by a group of wealthy investors for the sole purpose of providing funding for individuals and small firms that are trying to convert their new ideas into viable products. What is this type of funding called?A) Green shoe fundingB) Tombstone underwritingC) Venture capitalD) Red herring fundingE) Life cycle capital2) It is common for venture capitalists to receive at least ________ percent of a start-up company's equity in exchange for the venture capital.A) 10B) 15C) 20D) 30E) 403) Equity financing of new, non-public companies is broadly referred to as:A) singular-risk financing.B) mezzanine-level stock.C) stylized financing.D) private equity.E) exit funding.4) Which one of the following statements concerning venture capital financing is correct?A) Venture capitalists desire shares of common stock but avoid preferred stock.B) Venture capital is relatively easy to obtain.C) Venture capitalists rarely assume active roles in the management of the financed firm.D) Venture capitalists should have key contacts and financial strength.E) Venture capital is relatively inexpensive in today's competitive markets.5) Which one of the following statements concerning venture capitalists is correct?A) Venture capitalists always assume management responsibility for the companies they finance.B) Exit strategy is a key consideration when selecting a venture capitalist.C) Venture capitalists limit their services to providing money to start-up firms.D) Most venture capitalists are long-term investors in the companies they finance.E) A venture capitalist normally invests in a new idea from conception through the IPO.6) When selecting a venture capitalist, which one of the following characteristics is probably the least important?A) Financial strengthB) Level of involvementC) ContactsD) Exit strategyE) Underwriting experience7) Trevor is the CEO of Harvest Foods, which is a privately held corporation. What is the first step he must take if he wishes to take Harvest Foods public?A) Select an underwriterB) Obtain SEC approvalC) Gain board approvalD) Prepare a registration statementE) Distribute a prospectus8) Which one of these describes an exception to the registration filing requirement of the SEC?A) Loans that mature in one year or lessB) Issues that have an approved prospectusC) Loans of $10 million or lessD) Issues of less than $5 millionE) Issues that have received an approved letter of comment9) The Securities and Exchange Commission:A) verifies the accuracy of the information contained in the prospectus.B) publishes red herrings on prospective new security offerings.C) examines the prospectus during the Green Shoe period.D) reviews registration statements to ensure they comply with current laws and regulations.E) determines the final offer price once they have approved the registration statement.10) What is the form called that is filed with the SEC and discloses the material information on a securities issuer when that issuer offers new securities to the general public?A) ProspectusB) Red herringC) IndentureD) Public disclosure statementE) Registration statement11) M&C Merchants is offering $2.5 million of new securities to the general public. Which SEC regulation governs this offering?A) Regulation AB) Regulation CC) Regulation GD) Regulation QE) Regulation R12) What is a prospectus?A) A letter issued by the SEC authorizing a new issue of securitiesB) A report stating that the SEC recommends a new security to investorsC) A letter issued by the SEC that outlines the changes required for a registration statement to be approvedD) A document that describes the details of a proposed security offering along with relevant information about the issuerE) An advertisement in a financial newspaper that describes a security offering13) Which one of the following is a preliminary prospectus?A) TombstoneB) Green shoeC) Registration statementD) Rights offerE) Red herring14) Advertisements in a financial newspaper announcing a public offering of securities, along with a list of the investment banks handling the offering, are called:A) red herrings.B) tombstones.C) Green Shoes.D) registration statements.E) cash offers.15) The raising of small amounts of capital from a large number of people is known as:A) a rights offering.B) over allocating.C) a diversified offer.D) crowdfunding.E) a standby offer.16) During a 12-month period, a company is permitted to issue new securities through crowdfunding up to a limit of:A) $200 thousand.B) $500 thousand.C) $1 million.D) $5 million.E) $50 million.17) What is an issue of securities that is offered for sale to the general public on a direct cash basis called?A) Best efforts underwritingB) Firm commitment underwritingC) General cash offerD) Rights offerE) Herring offer18) Alberto currently owns 2,500 shares of Southern Tools. He has just been notified that the company is issuing additional shares and he is being given a chance to purchase some of these shares prior to the shares being offered to the general public. What is this type of an offer called?A) Best efforts offerB) Firm commitment offerC) General cash offerD) Rights offerE) Priority offer19) JLK is a partnership that was formed two years ago and has been extremely successful thus far. The owners have decided to incorporate and offer shares of stock to the general public. What is this type of an equity offering called?A) Venture capital offeringB) Shelf offeringC) Private placementD) Seasoned equity offeringE) Initial public offering20) What is a seasoned equity offering?A) An offering of shares by shareholders for repurchase by the issuerB) Shares of stock that have been recommended for purchase by the SECC) Equity securities held by a company's founder that are being offered for sale to the general publicD) Sale of newly issued equity shares by a publicly owned companyE) Outstanding shares that are offered for sale by one of a company's original founders21) Executive Tours has decided to go public and has hired an investment firm to handle the offering. The investment firm is serving as a(n):A) aftermarket specialist.B) venture capitalist.C) underwriter.D) seasoned writer.E) primary investor.22) Underwriters generally:A) pay a spread to the issuing firm.B) provide only best efforts underwriting in the U.S.C) accept the risk of selling the new securities in exchange for the gross spread.D) market and distribute an entire issue of new securities within their own firm.E) pass the risk of unsold shares back to the issuing firm via a firm commitment agreement.23) A syndicate can best be defined as a:A) venture capitalist.B) group of attorneys providing services for an IPO.C) block of investors who control a firm.D) bank that loans funds to finance the start-up of a new company.E) group of underwriters sharing the risk of selling a new issue of securities.24) The difference between the underwriters' cost of buying shares in a firm commitment and the offering price of those securities to the public is called the:A) gross spread.B) under price amount.C) filing fee.D) new issue premium.E) offer price.25) Jones & Co. recently went public and received $23.07 a share on their entire offer of 30,000 shares. Keeser & Co. served as the underwriter and sold 28,500 shares to the public at an offer price of $26.50 a share. What type of underwriting was this?A) Best effortsB) ShelfC) OversubscribedD) Private placementE) Firm commitment26) Blue Stone Builders recently offered to sell 45,000 newly issued shares of stock to the public. The underwriters charged a fee of 8.2 percent and paid Blue Stone Builders the uniform auction price for each of those shares. Which one of the following terms best describes this underwriting?A) Dutch auctionB) Best effortsC) Public rightsD) Private placementE) Market commitment27) The 40-day period following an IPO during which the SEC places restrictions on the public communications of the issuer is known as the ________ period.A) auctionB) quietC) lockupD) Green ShoeE) red28) Mobile Units recently offered 75,000 new shares of stock for sale. The underwriters sold a total of 78,500 shares to the public at a price of $16 a share. The additional 3,500 shares were purchased in accordance with which one of the following?A) Green Shoe provisionB) Red herring provisionC) Quiet provisionD) Lockup agreementE) Post-issue agreement29) With firm commitment underwriting, the issuing firm:A) is unsure of the total amount of funds it will receive until after the offering is completed.B) is unsure of the number of shares it will actually issue until after the offering is completed.C) knows exactly how many shares will be purchased by the general public during the offer period.D) retains the financial risk associated with unsold shares.E) knows upfront the amount of money it will receive from the stock offering.30) Which one of the following is a key goal of the aftermarket period?A) Collecting the largest number of Dutch auction bids as possibleB) Determining a fair offer priceC) Supporting the market price for a new securities issueD) Establishing a broad-based underwriting syndicateE) Distributing red herrings to as many potential investors as possible31) Which one of the following statements is correct?A) The quiet period commences when a registration statement is filed with the SEC and ends on the day the IPO shares commence trading.B) Lockup agreements outline how oversubscribed IPO shares will be allocated.C) Additional IPO shares can be issued in accordance with the lockup agreement.D) Quiet period restrictions only apply to the issuer of new securities.E) A public interview with an issuer's CFO could cause a forced delay in the issuer's IPO.32) With Dutch auction underwriting:A) each winning bidder pays the minimum price offered by any bidder.B) all successful bidders pay the same price per share.C) all bidders receive at least a portion of the quantity for which they bid.D) the selling firm receives the maximum possible price for each security sold.E) the bidder for the largest quantity receives the first allocation of securities.33) Individual investors might avoid requesting 100 shares in an upcoming IPO because they:A) do not want to be bothered with submitting their bid to the SEC for approval.B) do not want to abide by the quiet period requirement.C) are prevented from entering orders for less than 1,000 shares.D) are more apt to receive shares if the IPO is under allocated.E) would have to pay a premium based on their small order size.34) If a firm commitment IPO is overpriced then the:A) investors in the IPO may consider suing the underwriters.B) Green Shoe provision will probably be utilized.C) stock price will generally increase on the first day of trading.D) issuing firm is guaranteed to be successful in the long term.E) issuing firm receives less money than it probably should have.35) All of the following are supporting arguments in favor of IPO underpricing except which one?A) Helps prevent the "winner's curse"B) Rewards institutional investors who share their market value opinionsC) Reduces potential lawsuits against underwritersD) Diminishes underwriting riskE) Provides better returns to issuing firms36) When a firm announces an upcoming seasoned stock offering, the market price of the firm's existing shares tends to:A) increase.B) decrease.C) remain constant.D) respond, but the direction of the response is not predictable as shown by past studies.E) decrease momentarily and then immediately increase substantially within an hour following the announcement.37) The total direct costs of underwriting an equity IPO:A) tend to increase on a percentage basis as the total proceeds of the IPO increase.B) are generally between 7 and 9 percent, regardless of the issue size.C) tend to be less than the direct costs of issuing bonds on a percentage of proceeds basis.D) exclude the gross spread.E) can be as low as 5.5 percent and as high as 25 percent of gross proceeds.38) Which one of the following statements is correct concerning the direct costs of issuing securities?A) Domestic bonds are generally more expensive to issue than equity IPOs.B) The gross spread as a percentage of proceeds is the same for similar-sized IPOs and SEOs.C) A seasoned offering is always more expensive on a percentage basis than an IPO.D) There tends to be substantial economies of scale when issuing any type of security.E) The costs of issuing convertible bonds tend to be less on a percentage basis than the costs of issuing straight debt.39) Shares of PLS United have been selling with rights attached. Tomorrow, the stock will sell independent of these rights. Which one of the following terms applies to tomorrow in relation to this stock?A) Pre-issue dateB) Aftermarket dateC) Declaration dateD) Holder-of-record dateE) Ex-rights date40) The date on which a shareholder is officially listed as the recipient of stock rights is called the:A) issue date.B) offer date.C) declaration date.D) holder-of-record date.E) ex-rights date.41) A rights offering in which an underwriting syndicate agrees to purchase the unsubscribed portion of an issue is called a(n) ________ underwriting.A) standbyB) best effortsC) firm commitmentD) direct feeE) oversubscription42) BK & Co. offered 15,000 shares in a rights offer. T.L. Moore & Co. was the underwriter that by prior agreement purchased the 639 unsold shares. For its participation in this rights offer, T.L. Moore & Co. is most likely entitled to:A) the gross margin.B) the optional spread.C) a standby fee.D) the subscription price.E) an oversubscription fee.43) Franklin Minerals recently had a rights offering of 12,000 shares at an offer price of $17 a share. Isabelle is a shareholder who exercised her rights option by buying all of the rights to which she was entitled based on the number of shares she owns. Currently, there are six shareholders who have opted not to participate in the rights offering. Isabelle would like to purchase these unsubscribed shares. Which one of the following will allow her to do so?A) Standby provisionB) Oversubscription privilegeC) Open offer privilegeD) New issues provisionE) Overallotment provision44) Existing shareholders:A) may or may not have a pre-emptive right to newly issued shares.B) must purchase new shares whenever rights are issued.C) are prohibited from selling their rights.D) are generally well advised to let the rights they receive expire.E) can maintain their proportional ownership positions without exercising their rights.45) To purchase a share in a rights offering, an existing shareholder generally just needs to:A) pay the subscription amount in cash.B) submit the required form along with the required number of rights.C) pay the difference between the market price of the stock and the subscription price.D) submit the required number of rights along with a payment for the underwriting fee.E) submit the required number of rights along with the subscription price.46) The value of a right depends upon the number of rights required for each new share as well as the:A) subscription price and book value per share.B) market and book values per share.C) market price, book value, and subscription price.D) market and subscription prices.E) difference between the market and book values per share.47) Before a seasoned stock offering, you owned 500 shares of a firm that had 20,000 shares outstanding. After the seasoned offering, you still owned 500 shares but the number of shares outstanding rose to 25,000. Which one of the following terms best describes this situation?A) OverallotmentB) Percentage ownership dilutionC) Green Shoe allocationD) Red herring allotmentE) Abnormal event48) Which one of the following statements concerning dilution is correct?A) Dilution of percentage ownership occurs whenever an investor fully participates in a rights offer.B) Market value dilution increases as the net present value of a project increases.C) Market value dilution occurs when the net present value of a project is negative.D) Neither book value dilution nor market value dilution has any direct bearing on individual shareholders.E) Book value dilution is the cause of market value dilution.49) Roy owns 200 shares of RTF Inc. He has opted not to participate in the current rights offering by this company. As a result, Roy will most likely be subject to:A) an oversubscription cost.B) underpricing.C) dilution.D) the Green Shoe provision.E) a locked-in period.50) Direct business loans typically ranging from one to five years are called:A) private placements.B) debt SEOs.C) notes payable.D) debt IPOs.E) term loans.51) The High-End mutual fund recently loaned $13.6 million to Henderson Hardware for 15 years at 6.8 percent interest. This loan is best described as a:A) private placement.B) debt SEO.C) note payable.D) debt IPO.E) term loan.52) Which one of the following statements is correct concerning the issuance of long-term debt?A) A direct private long-term loan has to be registered with the SEC.B) Direct placement debt tends to have more restrictive covenants than publicly issued debt.C) Distribution costs are lower for public debt than for private debt.D) It is easier to renegotiate public debt than private debt.E) Wealthy individuals tend to dominate the private debt market.53) Shelf registration allows a firm to register multiple issues at one time with the SEC and then sell those registered shares anytime during the subsequent:A) 3 months.B) 6 months.C) 180 days.D) 2 years.E) 5 years.54) Pearson Electric recently registered 180,000 shares of stock under SEC Rule 415. The company plans to sell 100,000 shares this year and the remaining 80,000 shares next year. What type of registration was this?A) Standby registrationB) Shelf registrationC) Regulation A registrationD) Regulation Q registrationE) Private placement registration55) The Boat Works decided to go public by offering a total of 135,000 shares of common stockto the public. The company hired an underwriter who arranged a firm commitment underwriting and an initial selling price of $24 a share with a spread of 8.3 percent. As it turned out, the underwriters only sold 122,400 shares to the public. What is the amount paid to the issuer?A) $2,227,280B) $3,074,420C) $2,971,080D) $2,692,820E) $2,477,38056) Nelson Paints recently went public by offering 50,000 shares of common stock to the public. The underwriters provided their services in a best efforts underwriting. The offering price was set at $17.50 a share and the gross spread was $2.30. After completing their sales efforts, the underwriters determined that they sold a total of 47,500 shares. How much cash did the company receive from its IPO?A) $722,000B) $717,000C) $735,000D) $705,000E) $748,00057) LC Delivery has decided to sell 1,800 shares of stock through a Dutch auction. The bids received are as follows: 600 shares at $37 a share, 800 shares at $36, 900 shares at $35, 200 shares at $34, and 100 shares at $32 a share. How much will the company receive in total from selling the 1,800 shares? Ignore all transaction and flotation costs.A) $63,100B) $52,500C) $63,000D) $58,800E) $52,10058) Bakers' Town Bread is selling 1,500 shares of stock through a Dutch auction. The bids received are as follows: 200 shares at $17 a share, 400 shares at $15, 700 shares at $14, 400 shares at $13, and 200 shares at $11 a share. How much cash will the company receive from selling these shares of stock? Ignore all transaction and flotation costs.A) $22,000B) $22,500C) $23,000D) $24,500E) $20,20059) Eastern Electric is offering 2,100 shares of stock in a Dutch auction. The bids include: 1,400 shares at $32 a share, 1,500 shares at $31, 1,400 shares at $30, and 900 shares at $29 a share. How much cash will Eastern Electric receive from selling these shares? Ignore all transaction and flotation costs.A) $62,100B) $64,200C) $60,000D) $63,000E) $63,30060) You have been instructed to place an order for a client to purchase 500 shares of every IPO that comes to market. The next two IPOs are each priced at $26 a share and will begin trading on the same day. The client is allocated 500 shares of IPO A and 240 shares of IPO B. At the end of the first day of trading, IPO A was selling for $23.90 a share and IPO B was selling for $29.40 a share. What is the client's total profit or loss on these two IPOs as of the end of the first day of trading?A) − $286B) − $234C) − $148D) $275E) $32961) Richard placed an order for 1,000 shares in each of three IPOs at $28 a share. He was allocated 1,000 shares of IPO A, 200 shares of IPO B, and 600 shares of IPO C. On the first day of trading, IPO A opened at $28 a share and ended the day at $24.25 a share. IPO B opened at $30 a share and finished the day at $37 a share. IPO C opened at $28 a share and ended the day at $27.65 a share. What is the total profit or loss on these three IPO purchases as of the end of the first day of trading?A) − $2,160B) − $1,850C) − $1,950D) $2,240E) $2,17562) Two IPOs will commence trading next week. Scott places an order to buy 600 shares of IPOA. Steve places an order to purchase 600 shares of IPO A and 600 shares of IPOB. Both IPOs are priced at $21 a share. Scott is allocated 300 shares of IPO A. Steve is allocated 300 shares of IPO A and 600 shares of IPO B. At the end of the first day of trading, IPO A is selling for $23.30 a share and IPO B is selling for $17.75 a share. How much additional profit did Steve have at the end of the first day of trading as compared to Scott?A) $1,950B) $1,260C) $1,870D) −$1,950E) −$1,26063) Davis Bros. and The Storage Shed have both announced IPOs at $32 per share. One of these is undervalued by $9, and the other is overvalued by $4, but you have no way of knowing whichis which. You plan on buying 1,000 shares of each issue. If an issue is underpriced, it will be rationed, and only half your order will be filled. What is the amount of the difference between your expected profit and the amount of profit you could earn if you could get 1,000 shares of both IPO offerings?A) $4,500B) $5,000C) $4,000D) $5,500E) $6,00064) Wear Ever is expanding and needs $6.8 million to help fund this growth. The company estimates it can sell new shares of stock for $43 a share. It also estimates it will cost an additional $352,000 for filing and legal fees related to the stock issue. The underwriters have agreed to a spread of 7.5 percent. How many shares of stock must be sold for the company to fund its expansion?A) 170,376B) 185,127C) 179,811D) 154,209E) 61,80665) Mountain Teas wants to raise $13.6 million to open a new production facility. The company estimates the issue costs for legal and accounting fees will be $386,000. The underwriters have set the stock price at $27.50 a share and the underwriting spread at 8.15 percent. How many shares of stock must be sold to meet this cash need?A) 528,414B) 553,709C) 569,315D) 492,144E) 501,90966) Outdoor Goods needs $3.8 million to modernize its production equipment. The underwriters set the stock price at $29.50 a share with an underwriting spread of 7.35 percent. This would be a firm commitment underwriting. The estimated issue costs are $272,000. How many shares of stock must be sold to finance this project?A) 148,984B) 188,917C) 152,311D) 186,299E) 162,40067) Flagler Inc. needs to raise $11.6 million, including all accounting and legal fees, to finance its expansion so has decided to sell new shares of equity via a general cash offering. The offer price is $22.50 per share and the underwriting spread is 7.85 percent. How many shares need to be sold?A) 559,474B) 604,011C) 566,667D) 571,008E) 538,40968) New Education needs to raise $8.79 million to finance its expansion and has decided to sell new shares of equity via a general cash offering. The offer price is $31.40 per share, the underwriting spread is 7.32 percent, and the associated administrative expenses and fees are $517,600. How many shares need to be sold?A) 348,907B) 361,222C) 311,111D) 329,937E) 319,83269) The Huff Co. has just gone public. Under a firm commitment agreement, the company received $17.64 for each of the 3.2 million shares sold. The initial offering price was $22.50 per share, and the stock rose to $24.15 per share in the first day of trading. The company paid $984,900 in direct legal and other costs and incurred $340,000 in indirect costs. What was the flotation cost as a percentage of the net amount raised?A) 38.56 percentB) 40.32 percentC) 41.68 percentD) 40.20 percentE) 39.09 percent70) Mountain Mining requires $3.3 million to expand its current operations and has decided to raise these funds through a rights offering at a subscription price of $18 a share. The current market price of the company's stock is $24.70 a share. How many shares of stock must be sold to fund the expansion plans?A) 140,015B) 133,603C) 148,909D) 183,333E) 195,60771) Northwest Rail wants to raise $27.8 million through a rights offering to upgrade its rail lines. How many shares of stock need to be sold if the current market price is $30.34 a share and the subscription price is $26.50 a share?A) 916,282B) 937,856C) 985,065D) 1,058,604E) 1,049,05772) S&S wants to raise $11.3 million through a rights offering with a subscription price of $15 a share. The company has 1.24 million shares outstanding and a market price of $17.50 a share. Each shareholder will receive one right for each share of stock owned. How many rights will be needed to purchase one new share of stock in this offering?A) 1.42B) 1.75C) 1.65D) 1.82E) 1.5573) P&T wants to raise $2.8 million through a rights offering with a subscription price of $20 a share. Currently, the company has 750,000 shares of stock outstanding at a market price of $24.50 a share. One right will be granted for each share of stock outstanding. How many rights are required to purchase one new share of stock in this offering?A) 5.36B) 6.02C) 5.55D) 6.56E) 6.6774) Miller Fruit wants to expand and needs $1.6 million to do so. Currently, the firm has 465,000 shares of stock outstanding at a market price per share of $32.50. The firm decided on a rights offering with one right granted for each share of outstanding stock. The subscription price is $28 a share. How many rights are needed to purchase one new share of stock in this offering?A) 8.14B) 7.17C) 8.22D) 8.63E) 9.45。

审计学:一种整合方法阿伦斯英文版第12版课后答案Chapter15SolutionsManual

审计学:一种整合方法阿伦斯英文版第12版课后答案Chapter15SolutionsManual

审计学:⼀种整合⽅法阿伦斯英⽂版第12版课后答案Chapter15SolutionsManualChapter 15Audit Sampling for Tests of Controls andSubstantive Tests of TransactionsReview Questions15-1 A representative sample is one in which the characteristics of interest for the sample are approximately the same as for the population (that is, the sample accurately represents the total population). If the population contains significant misstatements, but the sample is practically free of misstatements, the sample is nonrepresentative, which is likely to result in an improper audit decision. The auditor can never know for sure whether he or she has a representative sample because the entire population is ordinarily not tested, but certain things, such as the use of random selection, can increase the likelihood of a representative sample.15-2Statistical sampling is the use of mathematical measurement techniques to calculate formal statistical results. The auditor therefore quantifies sampling risk when statistical sampling is used. In nonstatistical sampling, the auditor does not quantify sampling risk. Instead, conclusions are reached about populations on a more judgmental basis.For both statistical and nonstatistical methods, the three main parts are:1. Plan the sample2. Select the sample and perform the tests3. Evaluate the results15-3In replacement sampling, an element in the population can be included in the sample more than once if the random number corresponding to that element is selected more than once. In nonreplacement sampling, an element can be included only once. If the random number corresponding to an element is selected more than once, it is simply treated as a discard the second time. Although both selection approaches are consistent with sound statistical theory, auditors rarely use replacement sampling; it seems more intuitively satisfying to auditors to include an item only once.15-4 A simple random sample is one in which every possible combination of elements in the population has an equal chance of selection. Two methods of simple random selection are use of a random number table, and use of the computer to generate random numbers. Auditors most often use the computer to generate random numbers because it saves time, reduces the likelihood of error, and provides automatic documentation of the sample selected.15-5In systematic sampling, the auditor calculates an interval and then methodically selects the items for the sample based on the size of the interval. The interval is set by dividing the population size by the number of sample items desired.To select 35 numbers from a population of 1,750, the auditor divides 35 into 1,750 and gets an interval of 50. He or she then selects a random number between 0 and 49. Assume the auditor chooses 17. The first item is the number 17. The next is 67, then 117, 167, and so on.The advantage of systematic sampling is its ease of use. In most populations a systematic sample can be drawn quickly, the approach automatically puts the numbers in sequential order and documentation is easy.A major problem with the use of systematic sampling is the possibility of bias. Because of the way systematic samples are selected, once the first item in the sample is selected, other items are chosen automatically. This causes no problems if the characteristics of interest, such as control deviations, are distributed randomly throughout the population; however, in many cases they are not. If all items of a certain type are processed at certain times of the month or with the use of certain document numbers, a systematically drawn sample has a higher likelihood of failing to obtain a representative sample. This shortcoming is sufficiently serious that some CPA firms prohibit the use of systematic sampling. 15-6The purpose of using nonstatistical sampling for tests of controls and substantive tests of transactions is to estimate the proportion of items in a population containing a characteristic or attribute of interest. The auditor is ordinarily interested in determining internal control deviations or monetary misstatements for tests of controls and substantive tests of transactions.15-7 A block sample is the selection of several items in sequence. Once the first item in the block is selected, the remainder of the block is chosen automatically. Thus, to select 5 blocks of 20 sales invoices, one would select one invoice and the block would be that invoice plus the next 19 entries. This procedure would be repeated 4 other times.15-8 The terms below are defined as follows:15-8 (continued)15-9The sampling unit is the population item from which the auditor selects sample items. The major consideration in defining the sampling unit is making it consistent with the objectives of the audit tests. Thus, the definition of the population and the planned audit procedures usually dictate the appropriate sampling unit.The sampling unit for verifying the occurrence of recorded sales would be the entries in the sales journal since this is the document the auditor wishes to validate. The sampling unit for testing the possibility of omitted sales is the shipping document from which sales are recorded because the failure to bill a shipment is the exception condition of interest to the auditor.15-10 The tolerable exception rate (TER) represents the exception rate that the auditor will permit in the population and still be willing to use the assessed control risk and/or the amount of monetary misstatements in the transactions established during planning. TER is determined by choice of the auditor on the basis of his or her professional judgment.The computed upper exception rate (CUER) is the highest estimated exception rate in the population, at a given ARACR. For nonstatistical sampling, CUER is determined by adding an estimate of sampling error to the SER (sample exception rate). For statistical sampling, CUER is determined by using a statistical sampling table after the auditor has completed the audit testing and therefore knows the number of exceptions in the sample.15-11 Sampling error is an inherent part of sampling that results from testing less than the entire population. Sampling error simply means that the sample is not perfectly representative of the entire population.Nonsampling error occurs when audit tests do not uncover errors that exist in the sample. Nonsampling error can result from:1. The auditor's failure to recognize exceptions, or2. Inappropriate or ineffective audit procedures.There are two ways to reduce sampling risk:1. Increase sample size.2. Use an appropriate method of selecting sample items from thepopulation.Careful design of audit procedures and proper supervision and review are ways to reduce nonsampling risk.15-12 An attribute is the definition of the characteristic being tested and the exception conditions whenever audit sampling is used. The attributes of interest are determined directly from the audit program.15-13 An attribute is the characteristic being tested for in a population. An exception occurs when the attribute being tested for is absent. The exception for the audit procedure, the duplicate sales invoice has been initialed indicating the performance of internal verification, is the lack of initials on duplicate sales invoices.15-14 Tolerable exception rate is the result of an auditor's judgment. The suitable TER is a question of materiality and is therefore affected by both the definition and the importance of the attribute in the audit plan.The sample size for a TER of 6% would be smaller than that for a TER of 3%, all other factors being equal.15-15 The appropriate ARACR is a decision the auditor must make using professional judgment. The degree to which the auditor wishes to reduce assessed control risk below the maximum is the major factor determining the auditor's ARACR.The auditor will choose a smaller sample size for an ARACR of 10% than would be used if the risk were 5%, all other factors being equal.15-16 The relationship between sample size and the four factors determining sample size are as follows:a. As the ARACR increases, the required sample size decreases.b. As the population size increases, the required sample size isnormally unchanged, or may increase slightly.c. As the TER increases, the sample size decreases.d. As the EPER increases, the required sample size increases.15-17 In this situation, the SER is 3%, the sample size is 100 and the ARACR is 5%. From the 5% ARACR table (Table 15-9) then, the CUER is 7.6%. This means that the auditor can state with a 5% risk of being wrong that the true population exception rate does not exceed 7.6%.15-18 Analysis of exceptions is the investigation of individual exceptions to determine the cause of the breakdown in internal control. Such analysis is important because by discovering the nature and causes of individual exceptions, the auditor can more effectively evaluate the effectiveness of internal control. The analysis attempts to tell the "why" and "how" of the exceptions after the auditor already knows how many and what types of exceptions have occurred.15-19 When the CUER exceeds the TER, the auditor may do one or more of the following:1. Revise the TER or the ARACR. This alternative should be followed onlywhen the auditor has concluded that the original specifications weretoo conservative, and when he or she is willing to accept the riskassociated with the higher specifications.2. Expand the sample size. This alternative should be followed whenthe auditor expects the additional benefits to exceed the additionalcosts, that is, the auditor believes that the sample tested was notrepresentative of the population.3. Revise assessed control risk upward. This is likely to increasesubstantive procedures. Revising assessed control risk may bedone if 1 or 2 is not practical and additional substantive proceduresare possible.4. Write a letter to management. This action should be done inconjunction with each of the three alternatives above. Managementshould always be informed when its internal controls are notoperating effectively. If a deficiency in internal control is consideredto be a significant deficiency in the design or operation of internalcontrol, professional standards require the auditor to communicatethe significant deficiency to the audit committee or its equivalent inwriting. If the client is a publicly traded company, the auditor mustevaluate the deficiency to determine the impact on the auditor’sreport on internal control over financial reporting. If the deficiency isdeemed to be a material weakness, the auditor’s report on internalcontrol would contain an adverse opinion.15-20 Random (probabilistic) selection is a part of statistical sampling, but it is not, by itself, statistical measurement. To have statistical measurement, it is necessary to mathematically generalize from the sample to the population.Probabilistic selection must be used if the sample is to be evaluated statistically, although it is also acceptable to use probabilistic selection with a nonstatistical evaluation. If nonprobabilistic selection is used, nonstatistical evaluation must be used.15-21 The decisions the auditor must make in using attributes sampling are: What are the objectives of the audit test? Does audit sampling apply?What attributes are to be tested and what exception conditions are identified?What is the population?What is the sampling unit?What should the TER be?What should the ARACR be?What is the EPER?What generalizations can be made from the sample to thepopulation?What are the causes of the individual exceptions?Is the population acceptable?15-21 (continued)In making the above decisions, the following should be considered: The individual situation.Time and budget constraints.The availability of additional substantive procedures.The professional judgment of the auditor.Multiple Choice Questions From CPA Examinations15-22 a. (1) b. (3) c. (2) d. (4)15-23 a. (1) b. (3) c. (4) d. (4)15-24 a. (4) b. (3) c. (1) d. (2)Discussion Questions and Problems15-25a.An example random sampling plan prepared in Excel (P1525.xls) is available on the Companion Website and on the Instructor’s Resource CD-ROM, which is available upon request. The command for selecting the random number can be entered directly onto the spreadsheet, or can be selected from the function menu (math & trig) functions. It may be necessary to add the analysis tool pack to access the RANDBETWEEN function. Once the formula is entered, it can be copied down to select additional random numbers. When a pair of random numbers is required, the formula for the first random number can be entered in the first column, and the formula for the second random number can be entered in the second column.a. First five numbers using systematic selection:Using systematic selection, the definition of the sampling unit for determining the selection interval for population 3 is the total number of lines in the population. The length of the interval is rounded down to ensure that all line numbers selected are within the defined population.15-26a. To test whether shipments have been billed, a sample of warehouse removal slips should be selected and examined to see ifthey have the proper sales invoice attached. The sampling unit willtherefore be the warehouse removal slip.b. Attributes sampling method: Assuming the auditor is willing to accept a TER of 3% at a 10% ARACR, expecting no exceptions in the sample, the appropriate sample size would be 76, determined from Table 15-8.Nonstatistical sampling method: There is no one right answer to this question because the sample size is determined using professional judgment. Due to the relatively small TER (3%), the sample size should not be small. It will most likely be similar in size to the sample chosen by the statistical method.c. Systematic sample selection:22839 = Population size of warehouse removal slips(37521-14682).76 = Sample size using statistical sampling (students’answers will vary if nonstatistical sampling wasused in part b.300 = Interval (22839/76) if statistical sampling is used (students’ answers will vary if nonstatisticalsampling was used in part b).14825 = Random starting point.Select warehouse removal slip 14825 and every 300th warehouse removal slip after (15125, 15425, etc.)Computer generation of random numbers using Excel (P1526.xls): =RANDBETWEEN(14682,37521)The command for selecting the random number can be entered directly onto the spreadsheet, or can be selected from the function menu (math & trig) functions. It may be necessary to add the analysis tool pack to access the RANDBETWEEN function. Once the formula is entered, it can be copied down to select additional random numbers.d. Other audit procedures that could be performed are:1. Test extensions on attached sales invoices for clerical accuracy. (Accuracy)2. Test time delay between warehouse removal slip date and billing date for timeliness of billing. (Timing)3. Trace entries into perpetual inventory records to determinethat inventory is properly relieved for shipments. (Postingand summarization)15-26 (continued)e. The test performed in part c cannot be used to test for occurrenceof sales because the auditor already knows that inventory wasshipped for these sales. To test for occurrence of sales, the salesinvoice entry in the sales journal is the sampling unit. Since thesales invoice numbers are not identical to the warehouse removalslips it would be improper to use the same sample.15-27a. It would be appropriate to use attributes sampling for all audit procedures except audit procedure 1. Procedure 1 is an analyticalprocedure for which the auditor is doing a 100% review of the entirecash receipts journal.b. The appropriate sampling unit for audit procedures 2-5 is a line item,or the date the prelisting of cash receipts is prepared. The primaryemphasis in the test is the completeness objective and auditprocedure 2 indicates there is a prelisting of cash receipts. All otherprocedures can be performed efficiently and effectively by using theprelisting.c. The attributes for testing are as follows:d. The sample sizes for each attribute are as follows:15-28a. Because the sample sizes under nonstatistical sampling are determined using auditor judgment, students’ answers to thisquestion will vary. They will most likely be similar to the samplesizes chosen using attributes sampling in part b. The importantpoint to remember is that the sample sizes chosen should reflectthe changes in the four factors (ARACR, TER, EPER, andpopulation size). The sample sizes should have fairly predictablerelationships, given the changes in the four factors. The followingreflects some of the relationships that should exist in student’ssample size decisions:SAMPLE SIZE EXPLANATION1. 90 Given2. > Column 1 Decrease in ARACR3. > Column 2 Decrease in TER4. > Column 1 Decrease in ARACR (column 4 is thesame as column 2, with a smallerpopulation size)5. < Column 1 Increase in TER-EPER6. < Column 5 Decrease in EPER7. > Columns 3 & 4 Decrease in TER-EPERb. Using the attributes sampling table in Table 15-8, the sample sizesfor columns 1-7 are:1. 882. 1273. 1814. 1275. 256. 187. 149c.d. The difference in the sample size for columns 3 and 6 result from the larger ARACR and larger TER in column 6. The extremely large TER is the major factor causing the difference.e. The greatest effect on the sample size is the difference between TER and EPER. For columns 3 and 7, the differences between the TER and EPER were 3% and 2% respectively. Those two also had the highest sample size. Where the difference between TER and EPER was great, such as columns 5 and 6, the required sample size was extremely small.Population size had a relatively small effect on sample size.The difference in population size in columns 2 and 4 was 99,000 items, but the increase in sample size for the larger population was marginal (actually the sample sizes were the same using the attributes sampling table).f. The sample size is referred to as the initial sample size because it is based on an estimate of the SER. The actual sample must be evaluated before it is possible to know whether the sample is sufficiently large to achieve the objectives of the test.15-29 a.* Students’ answers as to whether the allowance for sampling error risk is sufficient will vary, depending on their judgment. However, they should recognize the effect that lower sample sizes have on the allowance for sampling risk in situations 3, 5 and 8.b. Using the attributes sampling table in Table 15-9, the CUERs forcolumns 1-8 are:1. 4.0%2. 4.6%3. 9.2%4. 4.6%5. 6.2%6. 16.4%7. 3.0%8. 11.3%c.d. The factor that appears to have the greatest effect is the number ofexceptions found in the sample compared to sample size. For example, in columns 5 and 6, the increase from 2% to 10% SER dramatically increased the CUER. Population size appears to have the least effect. For example, in columns 2 and 4, the CUER was the same using the attributes sampling table even though the population in column 4 was 10 times larger.e. The CUER represents the results of the actual sample whereas theTER represents what the auditor will allow. They must be compared to determine whether or not the population is acceptable.15-30a. and b. The sample sizes and CUERs are shown in the following table:a. The auditor selected a sample size smaller than that determinedfrom the tables in populations 1 and 3. The effect of selecting asmaller sample size than the initial sample size required from thetable is the increased likelihood of having the CUER exceed theTER. If a larger sample size is selected, the result may be a samplesize larger than needed to satisfy TER. That results in excess auditcost. Ultimately, however, the comparison of CUER to TERdetermines whether the sample size was too large or too small.b. The SER and CUER are shown in columns 4 and 5 in thepreceding table.c. The population results are unacceptable for populations 1, 4, and 6.In each of those cases, the CUER exceeds TER.The auditor's options are to change TER or ARACR, increase the sample size, or perform other substantive tests to determine whether there are actually material misstatements in thepopulation. An increase in sample size may be worthwhile inpopulation 1 because the CUER exceeds TER by only a smallamount. Increasing sample size would not likely result in improvedresults for either population 4 or 6 because the CUER exceedsTER by a large amount.d. Analysis of exceptions is necessary even when the population isacceptable because the auditor wants to determine the nature andcause of all exceptions. If, for example, the auditor determines thata misstatement was intentional, additional action would be requiredeven if the CUER were less than TER.15-30 (Continued)e.15-31 a. The actual allowance for sampling risk is shown in the following table:b. The CUER is higher for attribute 1 than attribute 2 because the sample sizeis smaller for attribute 1, resulting in a larger allowance for sampling risk.c. The CUER is higher for attribute 3 than attribute 1 because the auditorselected a lower ARACR. This resulted in a larger allowance for sampling risk to achieve the lower ARACR.d. If the auditor increases the sample size for attribute 4 by 50 items and findsno additional exceptions, the CUER is 5.1% (sample size of 150 and three exceptions). If the auditor finds one exception in the additional items, the CUER is 6.0% (sample size of 150, four exceptions). With a TER of 6%, the sample results will be acceptable if one or no exceptions are found in the additional 50 items. This would require a lower SER in the additional sample than the SER in the original sample of 3.0 percent. Whether a lower rate of exception is likely in the additional sample depends on the rate of exception the auditor expected in designing the sample, and whether the auditor believe the original sample to be representative.15-32a. The following shows which are exceptions and why:b. It is inappropriate to set a single acceptable tolerable exception rate and estimated population exception rate for the combined exceptions because each attribute has a different significance tothe auditor and should be considered separately in analyzing the results of the test.c. The CUER assuming a 5% ARACR for each attribute and a sample size of 150 is as follows:15-32 (continued)d.*Students’ answers will most likely vary for this attribute.e. For each exception, the auditor should check with the controller todetermine an explanation for the cause. In addition, the appropriateanalysis for each type of exception is as follows:15-33a. Attributes sampling approach: The test of control attribute had a 6% SER and a CUER of 12.9%. The substantive test of transactionsattribute has SER of 0% and a CUER of 4.6%.Nonstatistical sampling approach: As in the attributes samplingapproach, the SERs for the test of control and the substantive testof transactions are 6% and 0%, respectively. Students’ estimates ofthe CUERs for the two tests will vary, but will probably be similar tothe CUERs calculated under the attributes sampling approach.b. Attributes sampling approach: TER is 5%. CUERs are 12.9% and4.6%. Therefore, only the substantive test of transactions resultsare satisfactory.Nonstatistical sampling approach: Because the SER for the test ofcontrol is greater than the TER of 5%, the results are clearly notacceptable. Students’ estimates for CUER for the test of controlshould be greater than the SER of 6%. For the substantive test oftransactions, the SER is 0%. It is unlikely that students will estimateCUER for this test greater than 5%, so the results are acceptablefor the substantive test of transactions.c. If the CUER exceeds the TER, the auditor may:1. Revise the TER if he or she thinks the original specificationswere too conservative.2. Expand the sample size if cost permits.3. Alter the substantive procedures if possible.4. Write a letter to management in conjunction with each of theabove to inform management of a deficiency in their internalcontrols. If the client is a publicly traded company, theauditor must evaluate the deficiency to determine the impacton the auditor’s report on internal control over financialreporting. If the deficiency is deemed to be a materialweakness, the auditor’s report on internal control wouldcontain an adverse opinion.In this case, the auditor has evidence that the test of control procedures are not effective, but no exceptions in the sample resulted because of the breakdown. An expansion of the attributestest does not seem advisable and therefore, the auditor shouldprobably expand confirmation of accounts receivable tests. Inaddition, he or she should write a letter to management to informthem of the control breakdown.d. Although misstatements are more likely when controls are noteffective, control deviations do not necessarily result in actualmisstatements. These control deviations involved a lack ofindication of internal verification of pricing, extensions and footingsof invoices. The deviations will not result in actual errors if pricing,extensions and footings were initially correctly calculated, or if theindividual responsible for internal verification performed theprocedure but did not document that it was performed.e. In this case, we want to find out why some invoices are notinternally verified. Possible reasons are incompetence,carelessness, regular clerk on vacation, etc. It is desirable to isolatethe exceptions to certain clerks, time periods or types of invoices.Case15-34a. Audit sampling could be conveniently used for procedures 3 and 4 since each is to be performed on a sample of the population.b. The most appropriate sampling unit for conducting most of the auditsampling tests is the shipping document because most of the testsare related to procedure 4. Following the instructions of the auditprogram, however, the auditor would use sales journal entries asthe sampling unit for step 3 and shipping document numbers forstep 4. Using shipping document numbers, rather than thedocuments themselves, allows the auditor to test the numericalcontrol over shipping documents, as well as to test for unrecordedsales. The selection of numbers will lead to a sample of actualshipping documents upon which tests will be performed.。

伍德里奇计量经济学第六版答案Chapter-15

伍德里奇计量经济学第六版答案Chapter-15

伍德⾥奇计量经济学第六版答案Chapter-15CHAPTER 15TEACHING NOTESWhen I wrote the first edition, I took the novel approach of introducing instrumental variables as a way of solving the omitted variable (or unobserved heterogeneity) problem. Traditionally, aneous equations models. Occasionally, IV is first seen as a method to solve the measurement error problem. I have even seen texts where the first appearance of IV methods is to obtain a consistent estimator in anAR(1) model with AR(1) serial correlation.The omitted variable problem is conceptually much easier than simultaneity, and stating the conditions needed for an IV to be valid in an omitted variable context is straightforward. Besides, most modern applications of IV have more of an unobserved heterogeneity motivation.A leading example is estimating the return to education when unobserved ability is in the error term. We are not thinking that education and wages are jointly determined; for the vast majority of people, education is completed before we begin collecting information on wages or salaries. Similarly, in studying the effects of attending a certain type of school on student performance, the choice of school is made and then we observe performance on a test. Again, we are primarily concerned with unobserved factors that affect performance and may be correlated with school choice; it is not an issue of simultaneity.The asymptotics underlying the simple IV estimator are no more difficult than for the OLS estimator in the bivariate regression model. Certainly consistency can be derived in class. It is also easy to demonstrate how, even just in terms of inconsistency, IV can be worse than OLS if the IV is not completely exogenous.At a minimum, it is important to always estimate the reduced form equation and test whether the IV is partially correlated with endogenous explanatory variable. The material on multicollinearity and 2SLS estimation is a direct extension of the OLS case. Using equation (15.43), it is easy to explain why multicollinearity is generally more of a problem with 2SLS estimation.Another conceptually straightforward application of IV is to solve the measurement error problem, although, because it requires two measures, it can be hard to implement in practice.Testing for endogeneity and testing any overidentification restrictions is something that should be covered in second semester courses. The tests are fairly easy to motivate and are very easy to implement.While I provide a treatment for time series applications in Section 15.7, I admit to having trouble finding compelling time series applications. These are likely to be found at a less aggregated level, where exogenous IVs have a chance of existing. (See also Chapter 16 for examples.)187SOLUTIONS TO PROBLEMS15.1 (i) It has been fairly well established that socioeconomic status affects student performance. The error term u contains, among other things, family income, which has a positive effect on GPA and is also very likely to be correlated with PC ownership.(ii) Families with higher incomes can afford to buy computers for their children. Therefore, family income certainly satisfies the second requirement for an instrumental variable: it is correlated with the endogenous explanatory variable [see (15.5) with x = PC and z = faminc]. But as we suggested in part (i), faminc has a positive affect on GPA, so the first requirement for a good IV, (15.4), fails for faminc. If we had faminc we would include it as an explanatory variable in the equation; if it is the only important omitted variable correlated with PC, we could then estimate the expanded equation by OLS.(iii) This is a natural experiment that affects whether or not some students own computers. Some students who buy computers when given the grant would not have without the grant. (Students who did not receive the grants might still own computers.) Define a dummy variable, grant, equal to one if the student received a grant, and zero otherwise. Then, if grant was randomly assigned, it is uncorrelated with u. In particular, it is uncorrelated with family income and other socioeconomic factors in u. Further, grant should be correlated with PC: the probability of owning a PC should be significantly higher for student receiving grants. Incidentally, if the university gave grant priority to low-income students, grant would be negatively correlated with u, and IV would be inconsistent.15.2 (i) It seems reasonable to assume that dist and u are uncorrelated because classrooms are not usually assigned withconvenience for particular students in mind.(ii) The variable dist must be partially correlated with atndrte. More precisely, in the reduced formatndrte = 0 + 1priGPA + 2ACT + 3dist + v,we must have 3 0. Given a sample of data we can test H0: 3 = 0 against H1: 3 0 using a t test.(iii) We now need instrumental variables for atndrte and the interaction term,priGPA atndrte. (Even though priGPA is exogenous, atndrte is not, and so priGPA atndrte is generally correlated with u.) Under the exogeneity assumption that E(u|priGPA,ACT,dist) = 0, any function of priGPA, ACT, and dist is uncorrelated with u. In particular, the interaction priGPA dist is uncorrelated with u. If dist is partially correlated with atndrte then priGPA dist is partially correlated with priGPA atndrte. So, we can estimate the equationstndfnl = 0 + 1atndrte + 2priGPA + 3ACT + 4priGPA atndrte + u188by 2SLS using IVs dist, priGPA, ACT, and priGPA dist. It turns out this is not generally optimal. It may be better to add priGPA2 and priGPA ACT to the instrument list. This would give us overidentifying restrictions to test. See Wooldridge (2002, Chapters 5 and 9) for further discussion.15.3 It is easiest to use (15.10) but where we drop. Remember, this is allowed because= and similarly when we replace x with y. So the numerator in the formula for iswhere n1 = is the number of observations with z i = 1, and we have used the fact that /n1 = , the average of the y i over the i with z i = 1. So far, we have shown that thenumerator in is n1(). Next, write as a weighted average of the averages over the two subgroups:= (n0/n) + (n1/n),where n0 = n n1. Therefore,= [(n n1)/n] (n0/n) = (n0/n) ( - ).Therefore, the numerator of can be written as(n0n1/n)().By simply replacing y with x, the denominator in can be expressed as (n0n1/n)(). When we take the ratio of these, the terms involving n0, n1, and n, cancel, leaving= ()/().15.4 (i) The state may set the level of its minimum wage at least partly based on past or expected current economic activity, and this could certainly be part of u t. Then gMIN t and u t are correlated, which causes OLS to be biased and inconsistent. 189。

Chapter 15-已整理

Chapter 15-已整理

Chapter 15 The Brain, the Spinal Cord and the NervesOnce a number of the body systems have been surveyed, it should become fairly obvious that not one of these systems is capable of functioning alone. All are interdependent, and all must work together as one unit in order that the normal conditions within the body may prevail. The agency that insures the coordination of the organs and organ systems is the nervous system.Conditions both within and outside the body are constantly changing; one purpose of the nervous system is to respond to these internal and external changes (known as stimuli) and so cause the body to adapt itself to new conditions.The nervous system has been very aptly compared with a telephone exchange in which the brain and the spinal cord act as centers and the nerve trunks serve as cables and wires for carrying messages to and from various parts of these centers.15. 1 The Nervous System as a WholeThe parts of the nervous system may be grouped according to how they are made (structure) or else on the basis of what they do (function).Structural (ANATOMIC) ClassificationThe structure of the nervous system serves as the basis for the more commonly used grouping of the parts of the nervous system, as follows:1.The central nervous system, which includes the brain and the spinal cord.2.The peripheral nervous system, which is made up of cranial and spinal nerves.Cranial nerves are those which carry impulses to and from the brain. Spinal nerves arethose which carry messages to and from the spinal cord.From the standpoint of structure, the central and peripheral nervous systems together include most of the nerve tissue in the body. However, certain peripheral nerves have a special function, and for this reason they are grouped together under the designation autonomic nervous system. The reason for this separate classification is that the autonomic nervous system has to do largely with activities which go on more or less automatically. This system carries impulses from the central nervous system to the glands, the involuntary muscles found in the walls of tubes and hollow organs and the heart. The autonomic nervous system is subdivided into the sympathetic and parasympathetic nervous systems, both of which will be explained later in this chapter.Some of the nerves that carry autonomic nervous system impulses are cranial, and others are spinal.15.2 On Nerves in GeneralThe basic nerve cell is called a neuron. Neurons are composed of a cell body, containing the nucleus, with the addition of threadlike projections of the cytoplasm known as nerve fibers. The nerve fibers are of two kinds: dendrites, which conduct impulses to the cell body; and axons, which conduct impulses away from the cell body. The dendrites of sensory neurons are verydifferent from those of other neuron. They are usually single and they may be very long (as much as 3 feet) or they may be short; but in any case, they do not have the treelike appearance so typical of other dendrites. Each sensory nerve fiber (dendrite) has a special structure called the receptor, or end organ, where the stimulus is received and the sensory impulse begins. Sensations such as pain, touch, hearing and seeing which involve these sensory neurons will be discussed in Chapter 11.Each neuron is a separate unit, and there is no anatomic unity between neurons. It would be logical to ask how it is possible for neurons to be in contact; in other words, how the axon of one neuron can be in functional contact with the dendrite of another neuron. This is accomplished by the synapse, from a Greek word meaning “to clasp.” Synapses, then, are points of junction fro transmission of nerve impulses.Nerve fibers that are connected with receptors (for receiving stimuli) conduct impulses to the brain and cord, and when grouped together form afferent nerves. Those fibers that carry impulses from the centers out to the muscles and glands form efferent nerves. Motor neurons, which carry impulses that lead to the contraction of skeletal muscles, are classified as efferent neurons (Fig. 15.1). Some nerves contain a mixture of afferent and efferent nerve fibers and are often referred to as mixed nerves.Fig. 15.1 Diagram of a motor neuron15.3 The Central Nervous SystemTHE BRAINMain parts of the brainThe largest part of the brain is the cerebrum, which is divided into the two cerebral hemispheres, a right and a left one. The brainstem includes the deeper parts that comprise the interbrain (thalamus, etc.) that cannot be seen unless the brain is sectioned, and a series of smaller parts that extend downward. Starting at the upper part of this series, we may see a small part of the midbrain. Below it and plainly visible from the under view of the brain are the pons and the medulla oblongata, which connects with the spinal cord through a large opening in the base of the skull. The pons connects the midbrain and the medulla. Next in size to the cerebralhemispheres is the cerebellum, a word meaning :little brain.” It is located immediately below the back part of the cerebral hemispheres and is connected with the other parts of the brain only by means of the bridgelike pons.Structure of the cerebral hemispheresThe outer nerve tissue of the cerebral hemispheres is gray matter and is called the cerebral cortex. This gray cortex is arranged in folds forming elevated portions known as convolutions, separated by depressions or grooves called fissures, or sulci (Fig. 15.2). Internally the cerebral hemispheres are made largely of white matter and a few islands of gray matter. Inside the hemispheres are two spaces extending in a somewhat irregular fashion. These are the lateral ventricles, which are filled with a watery fluid common to both the brain and the spinal cord called cerebrospinal fluid, to be discussed later.Although there are many fissures (sulci), a few are especially important landmarks. These include the:1. Longitudinal fissure, which is a deep groove that separates the upper parts of the cerebralhemisphere from each other.2. Central fissure, which extends from the top of the brain near the center downward alongthe side at right angles to the longitudinal fissure.3. Lateral fissure, which curves somewhat along the side of the brain and separates thetemporal lobe from the rest of the cerebral hemisphere.Let us examine the cerebral cortex, the layer of gray matter which forms the surface of each cerebral hemisphere. It is within the cerebral cortex that all impulses are received and analyzed. These form the basis of knowledge; the brain “stores”knowledge, much of which can be produced on demand by means of the phenomenon which we call memory. It is in the cerebral cortex that all thought takes place, all association, judgment and discrimination. It is from the cerebral cortex, too, that the orders originating from conscious deliberation emanate; that is, the voluntary movements are controlled here.Fig. 15.2 External surface of the brain showing the main partsand some of the lobes and fissures of the cerebrum.Division and functions of the cerebral cortexThe cerebral cortex of each hemisphere is divided into four lobes, areas named from the overlying cranial bones. It has been found that each area controls a certain category of functions. The four lobes, with some of their characteristic functions, follow:1. The frontal lobe, which is relatively much larger in the human being than in any otherorganism. This contains the motor cortex which controls the voluntary muscles. The left side of the brain governs the right side of the body and the right side of the brain governs the left side of the body. The upper portion of the center controls the lower parts of the body. The frontal lobe also contains two areas used in speech (the speech centers will be discussed later).2. The parietal lobe, which occupies the upper part of each hemisphere, just behind thecentral fissure. This contains the sensory area, in which the general senses such as pain, touch and temperature are interpreted. Also, such interpretations as the determination of distances, sizes and shapes take place here.3. The temporal lobe, which is lateral (at the side) and folds under the hemispheres on eachside. This contains the auditory center for interpreting impulses from the ear.4. The occipital lobe, which is the most posterior, and extends over the cerebellum. Thiscontains the visual area for interpreting messages from the retina of the eye.Speech centersThe speech centers are among the most interesting groups of areas in the cerebral hemispheres (Fig. 15.3). Their development and use are closely connected with the processes of learning. These areas are called the:1. Auditory speech center, located in the temporal lobe near the auditory center. While theauditory center enables a person to interpret sounds, it does not have anything to do with the understanding of words. Such an understanding of language requires the development of the auditory speech center. Often, this is the first speech center to develop in the child.Babies often seem to understand what is being said long before they do any talking themselves. It is usually several years before children learn to read or write words. In many parts of the world people never learn to read or write their language.2. Visual speech center, which is somewhat above and in front of the visual center. In thisarea the ability to read with understanding is developed. You may see the writing in the Japanese language, for example, but this would involve only the visual center in the occipital lobe unless you could read the words.3. Motor speech center, located just in front of the lowest part of the motor cortex in thefrontal lobe. Since the lower part of the motor cortex controls the muscles of the head and the neck, it seems logical to think of the speech area as an extension forward to make possible the control of the muscles of speech in the tongue, the soft palate and the larynx.4. Written speech center, located above the motor speech center, and in front of the corticalarea that controls the muscles of the arm and the hand. Again this center is an extension forward from the motor cortex. The ability to write words usually is one of the last phases in the development of learning words and their meaning, although occasionally a person may write words more readily than he can vocalize them.Fig. 15.3. Functional areas of cerebrumOther parts of the cerebral hemispheresBeneath the gray matter of the cerebral cortex is the white matter, consisting of nerve fibers which connect the cortical areas with each other and with other parts of the nervous system. Among the most important of these large collections of nerve fibers is the internal capsule, a crowded strip of white matter where any injury is apt to cause extensive damage. At the base of each hemisphere are the nerve cell groups called basal ganglia, which regulate the body movements originating in the cerebral cortex. On the underside of each cerebral hemisphere is the olfactory area, concerned with the sense of smell, which is stimulated by the impulses arising in the nerve receptors of the nose.The interbrainThe interbrain, or diencephalon, can be seen only by cutting into the central section of the brain. It includes the thalamus and the hypothalamus. The two masses of gray matter that form the thalamus are relay centers and act to monitor sensory stimuli, suppressing some and magnifying others. The hypothalamus is located in the midline area below the thalamus and contains cells that control body temperature, water balance, sleep, appetite and some of our emotions, such as fear and pleasure. Both divisions of the autonomic nervous system are under the control of the hypothalamus. Thus it influe nces the heart‟s beating, the contractions of the walls of the bladder and other vital body functions.The midbrainThe midbrain is located just below the center of the cerebrum. It forms one of the forward parts of the brainstem. Four rounded masses of gray matter that are hidden by the cerebralhemispheres form the upper part of the midbrain. These four bodies, the corpora quadiigemina, act as relay centers for certain eye and ear reflexes. The ventral white matter of the midbrain conducts impulses between the higher centers of the cerebrum and the lower centers in the pons, cerebellum, medulla and spinal cord.The cerebellumThe cerebellum is made up of three parts: the middle portion, called the vermis (meaning …'wormlike‟‟), and two lateral hemisphere s at the sides. As in the case of the cerebral hemispheres, the cerebellum has an outer area of gray matter and an inner portion that is largely white matter. The functions of the cerebellum are:1. To aid in the coordination of voluntary muscles so that they will function smoothly and inan orderly fashion. Disease of the cerebellum causes muscular jerkiness and tremors.2. To help maintain balance in standing, walking and sitting, as well as during morestrenuous activities. Messages from the internal ear and from the tendon and muscle sensory end organs aid the cerebellum.3. To aid in maintaining muscle tone so that all muscle fibers are slightly tensed and readyto produce necessary changes in position as quickly as may be necessary.The ponsThe pons is white in color because it is composed largely of myelinated nerve fibers. These fibers in the pons carry messages from one side of the cerebellum to the other, from the cerebellum to the higher centers in the cerebrum and midbrain, and from the cerebellum to the lower centers, including the medulla and the spinal cord. Not only is the pons an important connecting link between the cerebellum and the rest of the nervous system, but it also contains connections with four pairs of cranial nerves. Further it contains nerve fibers that carry impulses to and from the centers located above and below it. Certain reflex (involuntary) actions are controlled in the pons; namely, some occurring in respiration.The medulla oblongataThe medulla of the brain is located between the pons and the spinal cord. It appears white externally because, like the pons, it contains many covered (myelinated) nerve fibers. Internally it contains collections of cell bodies (gray matter), which are called centers or nuclei. Among these are the very important vital centers including:1. The respiratory center, which controls the muscles of respiration in response to chemicaland other stimuli.2. The cardiac center, which tends to slow the heart rate so that it will not beat too rapidly tobe effective.3. The vasomotor center, which affects the muscles in the blood vessel walls and hencehelps to determine blood pressure.The last four pairs of cranial nerves are connected with the medulla. The nerve fibers that carry messages up through the spinal cord to the brain continue through the medulla also, as do similar descending or motor fibers. These groups of nerve fibers form tracts (bundles) and are grouped together according to function. The motor fibers from the motor cortex of the cerebral hemispheres .extend down through the medulla, and most of them cross from one side to the other (decussate) while going through this part of the brain. It is in the medulla that the shifting of nerve fibers occurs which causes the right cerebral hemisphere to control muscles in the left side of the body, and the upper portion of the cortex to control of muscles in the lower portions of the person. The medulla is an important reflex centfer, and it is here that certain neurons end and impulses are relayed to other neurons.Ventricles of the brainWithin the brain are four fluid-filled spaces called the ventricles. These extend into the various parts of the brain in a somewhat irregular fashion. We have already mentioned the largest, the lateral ventricles in the two cerebral hemispheres. Their extensions into the lobes of the cerebrum are called horns. These paired ventricles communicate with a midline space, the third ventricle, by means of the openings called foramina. The third ventricle is bounded on each side by the two parts of the thalamus, while the floor is occupied by the hypothalamus. Continuing down from the third ventricle a small canal, called the cerebral aqueduet, extends through the midbrain into the fourth ventricle. The latter is continuous with the near microscopic neural, or central, canal of the spinal cord. Do not confuse this tiny canal inside the cord with the much larger vertebral, or spinal, canal that is a part of the dorsal cavity enclosing the entire cord, together with its membranes and surrounding fluid. .In the roof of the fourth ventricle are three openings that allow the escape of fluid to the area that surrounds the brain and spinal cord. This will be discussed later.After removal of some of the fluid, air or other substances may be injected, and x-rays called encephalograms or ventriculograms are taken. Tumors or other brain disorders may sometimes be located by this means.Another kind of study of the brain and other soft tissues involves the use of high frequency sound impulses. This is called echoencephalography.BrainwavesThe interactions of the billions of nerve cells in the brain give rise to measurable electric currents. These may be recorded by an instrument called the electroencephalograph, which was Mentioned in Chapter 3. Tfie recorded tracings dr brain waves produce an electroencephalogram, not to be confused with the encephalogram mentioned earlier.Disorders of the brainSince the scientific name for the brain is encephalon, infection of, the brain is known asencephalitis. There are many causes of such disease, but the two chief pathogens are:1. Viruses, which cause some of the epidemic types of, sleeping sickness sometimes foundin the United States and in other parts of the world.2. Certain one-celled animals (protozoa) called trypanosoma, which cause the so-calledAfrican sleeping sickness. These protozoa are carried by a kind of fly (tsetse) and are capable of invading the cerebro-spinal fluid of man.Other infections that may involve the brain and related parts include abscesses and meningitis (explained later). As in the case of encephalitis a variety of organisms may cause these disorders. Viruses, bacteria, protozoa and fungi may travel from the centers of infection in the teeth, the sinuses, the tonsils and in the middle ear.Stroke, or cerebral apoplexy, is by far the most common kind of brain disorder. Rupture of a blood vessel (with a consequent cerebral hemorrhage), thrombosis or embolism may cause destruction of brain tissue. Such disorders are more frequent in the presence of artery wall disease, and hence are more common after the age of 40. The onset may seem to be sudden and often is referred to as a cerebrovascular accident. The effects of a stroke will depend on the extent and location of the artery involvement. A hemorrhage into the white matter of the internal capsule in the lower part of the cerebrum may cause extensive paralysis on the side opposite to the affected area. Such a paralysis is called hemiplegia, and the person so afflicted is known as a hemiplegic.Cerebral palsy is a disorder present at birth. It is characterized by diverse disorders of muscles varying in degree from weakness to complete paralysis, and in extent from a slight disorder of the lower extremity muscles to a multiplicity of paralyses involving all four extremities and the speech muscles as well. With patient and continuous muscle reeducation, speech training and other corrective procedures these victims may be helped considerably.Epilepsy, or so-called falling sickness, is a chronic disorder in which there is abnormality of brain function without apparent changes in tlte nerve tissues. In most cases the cause is not known. The study of brain waves obtained with the electroencephalograph usually shows abnormalities and is helpful both in diagnosis and treatment. Research is constantly improving and increasing the knowledge concerning the various forms of epilepsy. Many of these sufferers can be helped to live a normal active life if they follow a very careful hygienic regimen and use appropriate medication as outlined by a physician.Tumors of the brain may develop at any age, but are somewhat more common in young and middle-aged adults. The majority of brain tumors originate from the neuroglia and are called gliomas. The symptoms produced depend on the location of the growth, its destructiveness and the amount it compresses the brain tissue. Involvement of the frontal portions of the cerebrum often causes mental symptoms, such as changes in personality, disordered conduct and drowsiness. Early surgery offers hope of cure in some cases.Aphasia is a term that refers to the loss of the ability to speak or write, or the loss of the understanding of written or spoken language. There are several different kinds of aphasia,depending on what part of the brain is affected. Usually damage to a speech center causes more disturbance in the well-educated person than it does in the illiterate. It also has been noted that there is a tendency for the last language to be acquired to be the first to be lost; and conversely, the speech concepts that were obtained first (in childhood) remain the longest. The lesion that causes aphasia is likely to be in the left cerebral hemisphere in the right-handed person. Often much can be done for these people by patient retraining and much.understanding. The brain is an organ that has a marvelous capacity for adapting itself to different conditions, and its resources are tremendous. Often some means of communi¬cation can be found even though speech areas are damaged.THE SPINAL CORDLocation of the spinal cordIn the embryo the spinal cord occupies the entire spinal canal and so extends down into the tail portion of the vertebral column. However, the column of bone grows much more rapidly than the nerve tissue of the cord, so that the end of the cord soon fails to extend into the lower part of the spinal canal. This disparity in growth increases so that in the adult the cord ends in the region just below the area to which the last rib attaches (between the first and second lumbar vertebrae).Structure of the spinal cordExamination of the spinal cord reveals that it has a small irregularly shaped internal section made of gray matter (nerve cell bodies), and a larger area surrounding this gray part that is made of white matter (nerve fibers). A cross section of the cord shows that the gray matter is so arranged that a column of cells extends up and down dorsally, one on each side; another column is found in the ventral region; while a third less conspicuous part is situated on each side. These three pairs of columns of gray matter give this cross section an H-shaped appearance. The white matter can be seen to be made of thousands of nerve fibers arranged in three areas external to the gray matter on each side.Functions of the spinal cordThe functions of the cord may be divided into three aspects;1. Reflex activities, which involve the transfer and integration of messages that enter thecord, so that a sensory (afferent) impulse entering the center will become a motor (efferent) message leaving the cord.2. A pathway for conducting sensory impulses from afferent nerves upward throughascending tracts to the brain.3. A pathway for conducting motor impulses from the brain down through descending tractsto the nerves that will supply muscles or glands.The reflex pathway through the spinal cord usually involves three or more nerve cellstogether with their fibers, including:1. The sensory neuron, which has its beginning in a receptor and its nerve fiber in a nervethat leads to the cord.2. One or more central neurons, which are entirely within the cord.3. The motor neuron, which receives the impulse from a central neuron and then carries itvia its long axon through a nerve to a muscle or a gland.The knee jerk is an example of a spinal reflex. The pathway for the impulses that make this reflex possible includes a sensory neuron which has its receptor in the tendon just below die knee, its sensory nerve fiber in the nerves that extend to the spinal cord, central neurons inside the lower part of the cord and motor neurons that send processes through nerves from the cord to the effectors in the thigh‟s kicking muscle.Disorders involving the spinal cordAn acute virus disease affecting both the spinal cord and the brain is poliomyelitis, which is most commonly found in children. The polio virus is spread from the nose and the throat; from here it travels to the central nervous system, possibly by way of the respiratory passages and the blood. The virus may destroy the motor nerve cells in the spinal cord, in which case paralysis of one or more limbs results. The virus also can attack some of the cells of the brain and cause death. Prevention of poliomyelitis by means of the oral Sabin vaccine (which was preceded by the Salk vaccine) is one of the many significant advances in preventive medicine.Injuries to the spinal cord occur in traffic accidents in which bones of the spinal column are broken or dislocated. In wars gunshot or shrapnel wounds may damage the cord in varying degrees. Since the nerve tissue of the brain and the cord cannot repair itself, severing the cord causes paralysis below the injury, together with loss of all sensation from this area. Loss of sensation and of motion in the lower part of the body is called paraplegia.Other disorders of the spinal cord include tumors that grow from within the cord or that compress the cord from outside.Multiple sclerosis (sclerosis means hardening) involves the entire spinal cord as well as the brain. In this disease the myelin, a fatlike substance that forms a sheath around certain nerve fibers, disappears and the nerve axons themselves degenerate. It is an extremely disabling disease; however, it usually progresses very slowly so that the patient may have many years of relatively comfortable life remaining to him.Amyotrophic lateral sclerosis is a motor disorder of the nervous system in which certain cells are destroyed. The progressive destruction causes muscle atrophy and loss of motor control, until finally the victim is unable to swallow, or to talk.Spinal puncture and anesthesiaFluid may be removed from the space below the spinal cord. Since the cord is only about 18 inches long and ends some distance above the level of the hip line, a spinal puncture is usuallydone between the third and fourth lumbar vertebrae, about the level of the top of the hip bone. This cerebro-spinal fluid may be studied in the laboratory for evidence of disease or injury.Anesthetics are sometimes dissolved in. cerebrospinal fluid and then injected into the space below the cord, thus temporarily removing all sensation from the lower part of the body. In the hands of a trained operator this method of giving an anesthetic may have a number of advantages for certain types of surgery in selected patients. Under this type of anesthetic the patient is “awake” during the operation, but of course feels nothing in his lower body.COVERINGS OF THE BRAIN AND THE SPINAL CORDThe meninges are three layers of connective tissue that surround the brain and the spinal cord to form a complete enclosure; The outermost of these membranes is called the dura mater. It is the thickest and toughest of these meninges. Inside the skull, the dura mater splits in certain places to provide channels for the blood coming from the brain tissue. The second layer around the brain and the spinal cord is the arachnoid membrane (so-called because it resembles the webs produced by spiders, which belong to a group of animals called the Arachnida). The arachnoid membrane is loosely attached, to the deepest of the meninges by weblike fibers allowing a space for fluid located between the arachnoid and the innermost membrane. The third layer around the brain, the pia mater, is attached to the .nerve tissue of the brain and spinal cord and dips into all the depressions, unlike the other two meninges. It is made of a delicate Connective tissue in which there are many blood vessels. The blood supply to the brain is carried, to a large extent, by the pia mater (Fig. 15.4).Fig. 15.4 Frontal (coroal) section of top of head, showing meninges andrelated parts.。

第15章 垄断

第15章 垄断
CHAPTER 15 MONOPOLY
Price
垄断利润
MC
D MR Quantity
Q
22
现实世界中的价格歧视
在现实世界中,完全价格歧视是很难做到
的:
• 没有哪个企业知道每个买者的支付意愿 • 买者不会把自己的支付意愿告诉卖者
因此,垄断者根据一些可能和支付意愿有
关的可观察的特征(如年龄)将消费者划分为 不同的消费群体。
需求曲线 (P)
MR
6
1.50
1
2
3
4
5
6
7
Q
9
CHAPTER 15
MONOPOLY
理解垄断者的边际收益
垄断者增加销售量时对收入产生的两种效应:
• 产量效应: •
产量增加导致收益增加 价格效应: 价格降低导致收益减少
为了增加销售量,垄断者必须降低所出售的每单
位商品的价格。
因此, MR < P 如果价格效应大于产量效应,MR甚至会变为负值
垄断的福利代价
竞争性均衡: 产量= QC P = MC 总剩余达到最大 化 垄断均衡: 产量= QM P > MC 无谓损失
CHAPTER 15 MONOPOLY
Price
无谓损失 MC
P P = MC MC
D MR
QM QC
Quantity
17
对垄断的公共政策
用反托拉斯法促进竞争
• 禁止一些反竞争的行为,允许政府解散垄断性企
TR
AR
n.a.
MR
P 和 MR之间是什么 关系?
7
答案
本题中, P = AR, 和竞争性企业一样。
Q

计算机组装车维护chapter15

计算机组装车维护chapter15

15-3 计算机软件故障
15-3-1 系统故障
15-3 计算机软件故障
15-3-2 应用软件故障
15-4 计算机硬件故障
15-4-1 CPU 常见故障
由于CPU 是计算机中最重要的配件,也是集成度最 高的配件,因此其可靠性非常强,在正确使用计算机的情 况下出现CPU 损坏烧毁的机率并不是很高,但也不可排 除人为原因引起的CPU 损坏、烧毁等现象。特别是在安 装过程和超频使用的情况下,极易引起CPU 损坏烧毁, 给我们的使用带来麻烦。 目前有能力生产CPU 的厂家主 要是Intel 和AMD,所以CPU 真正的芯片级维修谈不上, 如果CPU 真的坏了,只能更换。我们这里的故障指的是 和CPU 相关的一些小的故障,我们可以自行解决的问题。
全国中等职业学校计算机类通用教材
Chapter 15 计算机常见故障及解决方法
本课件的文字及图片版权 均为南京凤凰康轩所有
本章学习重点
15-1 计算机系统故障分析 15-2 计算机常见故障及解决 15-3 计算机软件故障 15-4 计算机硬件故障
15-1 计算机系统故障分析
仔细观察原则
(1)对计算机所表现的特征及显示内容的观察。 (2)对计算机内部环境情况的观察(注意:一般要在关闭 外接电源的情况下进行),灰尘是否太多、各部件的连接是 否正确。 (3)对计算机的软硬件配置观察。 (4)对计算机周围环境的观察。 观察一般包括“看、听、闻、摸”四个步骤。
15-2 计算机常见故障及解决
硬件引起的死机故障主要原因:
(1)CPU散热不良。 (2)显卡散热不良。 (3)电源散热不良。 (4)内存品质不良。 (5)主板品质不良。 (6)硬盘品质不良。 解决方法:对于散热不良造成的死机故障,主要解决以下三个地方。 (1)CPU 散热器及风扇,主要是风扇。计算机长期使用后,灰尘及长 期运转造成的风扇性能下降或物理损坏,是造成散热不良的主要原因。 (2)显卡散热器及风扇,主要是风扇。除尘清洁,更换风扇。 (3)电源风扇及灰尘:清洁除尘。 对于内存、主板、硬盘品质不良,只有更换不良品质的部件了。

IV Chapter 15 空场采矿法

IV Chapter 15  空场采矿法

第十五章空场采矿法§15-1 概述⏹基本特点:❑将矿块划分为矿房和矿柱两步回采,先采矿房后采矿柱。

回采矿房时形成的采空区在矿柱和围岩支撑下以敞空的形式存在,暂不处理,故称为空场采矿法。

❑矿房采完后,可立即回采矿柱,也可允许空场存在一定时间后再回采矿柱并处理采空区。

⏹基本条件:矿石和围岩都稳固。

图15-1 矿块划分为矿房和矿柱1——矿房;2——间柱;3——顶柱;4——底柱;5——阶段回风巷;6——阶段运输巷;7——天井;h ——阶段高;L ——矿块长; ——顶柱厚;——矿房高;——底柱高;1h 0h 2h 0l ——矿房长;b ——间柱宽空场采矿法分类空场采矿法全面采矿法房柱采矿法留矿采矿法分段矿房法阶段矿房法§15-2 全面采矿法⏹特点❑在划分的盘区或矿块内,布置沿矿体走向或逆倾斜方向全面推进的回采工作面,也可以不划分矿块,回采工作沿走向连续推进,在整个阶段的斜高上呈直线或梯段全面推进。

❑采空区依靠围岩自身的稳固性与回采过程中不采的贫矿或夹石形成的不规则矿柱共同维护。

一、结构与参数❑顶柱、底柱:2~4m❑矿块间的间柱:4~6m❑阶段斜长:40~60m(电耙),无轨自行设备可加长❑工作面推进长度:50~60m或100~150m随顶板允许暴露面积而定415-24—阶段回风巷❑矿块内留设的不规则矿柱,一般为圆形,φ3~6m或6~9m ,厚度大时取大值。

❑矿柱间距8~20m。

二、采准与切割❑沿走向掘1~2条上山,作为起始回采的自由面。

❑沿走向每隔5~7m自阶段运输巷向其上侧掘放矿漏斗,每隔20m左右向其下侧掘一电耙绞车硐室。

❑脉内采准,脉外采准。

三、回采工作❑厚度<3m 时,工作面可一次采全厚(图15-2)❑厚度>3m 时,且采用手持式凿岩机,可布置梯段工作面回采(沿厚度方向)(图15-3)⏹浅孔落矿❑炮孔布置单排眼双排眼三排眼❑工作面可直线形,也可沿其长度划分2-3个梯段(根据矿体厚度和硬度)打眼放炮自切割天井开始15-3厚度>3m时, 可布置梯段工作面回采⏹采区通风❑新鲜风流→阶段平巷→未回采区段的漏斗口→切割平巷到工作面或经回采区段的漏斗口→工作面❑乏风→从联络巷进入回风平巷。

伍德里奇计量经济学第六版答案Chapter-15

伍德里奇计量经济学第六版答案Chapter-15

CHAPTER 15TEACHING NOTESWhen I wrote the first edition, I took the novel approach of introducing instrumental variables as a way of solving the omitted variable (or unobserved heterogeneity) problem. Traditionally, aneous equations models. Occasionally, IV is first seen as a method to solve the measurement error problem. I have even seen texts where the first appearance of IV methods is to obtain a consistent estimator in anAR(1) model with AR(1) serial correlation.The omitted variable problem is conceptually much easier than simultaneity, and stating the conditions needed for an IV to be valid in an omitted variable context is straightforward. Besides, most modern applications of IV have more of an unobserved heterogeneity motivation.A leading example is estimating the return to education when unobserved ability is in the error term. We are not thinking that education and wages are jointly determined; for the vast majority of people, education is completed before we begin collecting information on wages or salaries. Similarly, in studying the effects of attending a certain type of school on student performance, the choice of school is made and then we observe performance on a test. Again, we are primarily concerned with unobserved factors that affect performance and may be correlated with school choice; it is not an issue of simultaneity.The asymptotics underlying the simple IV estimator are no more difficult than for the OLS estimator in the bivariate regression model. Certainly consistency can be derived in class. It is also easy to demonstrate how, even just in terms of inconsistency, IV can be worse than OLS if the IV is not completely exogenous.At a minimum, it is important to always estimate the reduced form equation and test whether the IV is partially correlated with endogenous explanatory variable. The material on multicollinearity and 2SLS estimation is a direct extension of the OLS case. Using equation (15.43), it is easy to explain why multicollinearity is generally more of a problem with 2SLS estimation.Another conceptually straightforward application of IV is to solve the measurement error problem, although, because it requires two measures, it can be hard to implement in practice.Testing for endogeneity and testing any overidentification restrictions is something that should be covered in second semester courses. The tests are fairly easy to motivate and are very easy to implement.While I provide a treatment for time series applications in Section 15.7, I admit to having trouble finding compelling time series applications. These are likely to be found at a less aggregated level, where exogenous IVs have a chance of existing. (See also Chapter 16 for examples.)187SOLUTIONS TO PROBLEMS15.1 (i) It has been fairly well established that socioeconomic status affects student performance. The error term u contains, among other things, family income, which has a positive effect on GPA and is also very likely to be correlated with PC ownership.(ii) Families with higher incomes can afford to buy computers for their children. Therefore, family income certainly satisfies the second requirement for an instrumental variable: it is correlated with the endogenous explanatory variable [see (15.5) with x = PC and z = faminc]. But as we suggested in part (i), faminc has a positive affect on GPA, so the first requirement for a good IV, (15.4), fails for faminc. If we had faminc we would include it as an explanatory variable in the equation; if it is the only important omitted variable correlated with PC, we could then estimate the expanded equation by OLS.(iii) This is a natural experiment that affects whether or not some students own computers. Some students who buy computers when given the grant would not have without the grant. (Students who did not receive the grants might still own computers.) Define a dummy variable, grant, equal to one if the student received a grant, and zero otherwise. Then, if grant was randomly assigned, it is uncorrelated with u. In particular, it is uncorrelated with family income and other socioeconomic factors in u. Further, grant should be correlated with PC: the probability of owning a PC should be significantly higher for student receiving grants. Incidentally, if the university gave grant priority to low-income students, grant would be negatively correlated with u, and IV would be inconsistent.15.2 (i) It seems reasonable to assume that dist and u are uncorrelated because classrooms are not usually assigned with convenience for particular students in mind.(ii) The variable dist must be partially correlated with atndrte. More precisely, in the reduced formatndrte = 0 + 1priGPA + 2ACT + 3dist + v,we must have 3 0. Given a sample of data we can test H0: 3 = 0 against H1: 3 0 using a t test.(iii) We now need instrumental variables for atndrte and the interaction term,priGPA atndrte. (Even though priGPA is exogenous, atndrte is not, and so priGPA atndrte is generally correlated with u.) Under the exogeneity assumption that E(u|priGPA,ACT,dist) = 0, any function of priGPA, ACT, and dist is uncorrelated with u. In particular, the interaction priGPA dist is uncorrelated with u. If dist is partially correlated with atndrte then priGPA dist is partially correlated with priGPA atndrte. So, we can estimate the equationstndfnl = 0 + 1atndrte + 2priGPA + 3ACT + 4priGPA atndrte + u188by 2SLS using IVs dist, priGPA, ACT, and priGPA dist. It turns out this is not generally optimal. It may be better to add priGPA2 and priGPA ACT to the instrument list. This would give us overidentifying restrictions to test. See Wooldridge (2002, Chapters 5 and 9) for further discussion.15.3 It is easiest to use (15.10) but where we drop. Remember, this is allowed because= and similarly when we replace x with y. So the numerator in the formula for iswhere n1 = is the number of observations with z i = 1, and we have used the fact that /n1 = , the average of the y i over the i with z i = 1. So far, we have shown that thenumerator in is n1(). Next, write as a weighted average of the averages over the two subgroups:= (n0/n) + (n1/n),where n0 = n n1. Therefore,= [(n n1)/n] (n0/n) = (n0/n) ( - ).Therefore, the numerator of can be written as(n0n1/n)().By simply replacing y with x, the denominator in can be expressed as (n0n1/n)(). When we take the ratio of these, the terms involving n0, n1, and n, cancel, leaving= ()/().15.4 (i) The state may set the level of its minimum wage at least partly based on past or expected current economic activity, and this could certainly be part of u t. Then gMIN t and u t are correlated, which causes OLS to be biased and inconsistent.189。

微积分教学资料——chapter15

微积分教学资料——chapter15
Where g1 (x) andg2 (x) are continuous on [a,b]
Some examples of type I
Evaluate
where D is a region of type I A new function F with domain R:
F
(x,
y)

f 0
If f is continuous on type II region D such that
then
D (x, y) 2 c y d ,h 1(y) x h2(y)
Example 1 Evaluate (x2 y)dA ,where D is the region D
15.1 Double Integrals over Rectangles
Volumes and Double Integrals A function f of two variables defined on a closed rectangle
R [a,b][c,d] (x, y) 2 a x b,c y d
and we suppose that f (x, y) 0 The graph of f is a surface with equation z f (x, y).
Let S be the solid that lies above R and under the graph of f ,that is ,
D (x, y) a x b,g1(x) y g2(x)
Where g1 (x) andg2 (x) are continuous on [a,b]
Some examples of type I

《商业银行管理》课后习题答案IMChap15

《商业银行管理》课后习题答案IMChap15

CHAPTER 15MANAGING NONDEPOSIT LIABILITIES AND OTHER SOURCES OF BANK FUNDS Goal of This Chapter: To discover the major nondeposit sources of borrowed funds banks use today and to learn the factors a banker must consider in choosing among various deposit and nondeposit funds sources.Key Terms Presented in This ChapterCustomer Relationship Doctrine Commercial Paper MarketLiability Management Repurchase Agreement (RP)Federal Funds Market Funds GapDiscount Window Interest-Rate RiskNegotiable CD Credit Availability RiskEurocurrency DepositChapter OutlineI. Introduction: The Consequences of Deposit Shortfalls and the Need to Use NondepositSources of FundsII. Liability ManagementA. Customer Relationship DoctrineB. Purpose of Liability ManagementIll. Alternative Nondeposit Sources of Bank FundsA. Federal Funds MarketB. Borrowing from the Federal Reserve Bank in the DistrictC. The Development and Sale of Large Negotiable CDsD. Eurocurrency Deposit MarketE. The Commercial Paper MarketF. Repurchase Agreements as a Source of Bank FundsG. Long-Term Nondeposit Funds SourcesIV. Choosing Among Alternative Nondeposit SourcesA. Measuring a Bank's Total Need for Nondeposit Funds - The Funds GapB. Nondeposit Funding Sources: Factors to Consider1. Relative Costs2. The Risk Factor3. Length of Time for Which Funds Are Needed4. The Size of the Borrowing Bank and Its Funding Need5. RegulationsV. Summary of the ChapterConcept Checks15-1. What is liability management?181182Liability management involves the conscious control of the funding sources of a bank,using the interest rates (yields) offered on deposits and other borrowings to regulate the inflow of funds to match the bank's immediate funding needs.15-2. What advantages and risks does the pursuit of liability management bring to a bank?Improved control over funding sources enables a bank to plan its growth more completely, but liability management opens up certain risks, particularly of the interest-rate risk and solvency (default or failure) risk variety, because it tends to be more sensitive to changes in market interest rates.15-3. What is the customer relationship doctrine and what are its implications for bank fund-raising?The customer relationship doctrine places lending to customers at the top of a bank's priority list. It argues that a bank should make all good loans - that is, all loans that meet the bank's quality and profitability standards - and then find the funds needed to fund those loans the bank decides to make. Funds uses thus become a higher immediate priority item than funds sources.15-4. For what kinds of bank funding situations are federal funds best suited?Federal funds are best suited for banks short of reserves to meet their legal reserve requirements or to satisfy customer loan demand. It satisfies this demand by tapping immediately usable funds.15-5. Chequers State Bank loans $50 million from its reserve account at the Federal Reserve Bank of Philadelphia to First National Bank of Smithville, located in the New York Federal Reserve Bank's district, for 24 hours with the funds scheduled to be returned the next day. The proper accounting entries in this case would be:Step 1 - Lending the $50 millionChequers State BankStep 2 - Using the borrowed First National Bank of Smithvillefunds can also be shown, though it is not mentioned in the problem. You could show First National Bank of Smithville making a loan for $50 million under Assets, giving up $50 million from its reserve account.Step 3 - Repaying the Loan of Federal FundsChequers State BankFirst National Bank of Smithville15-6. Hillside Security Bank has an excess balance of $35 million in a deposit at its principal correspondent, Sterling City Bank, and instructs the latter institution to loan the funds today to another bank, returning them to its correspondent deposit the next business day. Sterling loans the $35 million to Imperial Security National Bank for 24 hours. The proper accounting entries would be:Step 1 - Lending Federal Funds to a CorrespondentHillside Security BankSterling City BankAssets LiabilitiesFederal fundspurchased +$35 mill.RespondentBank's deposit -$35 mill.183Step 2 - The Correspondent Bank Loans Funds to Another BankSterling City BankImperial Security National BankStep 3 - Repaying the Loan to the Respondent BankHillside Security BankSterling City Bank15-7. What are the advantages of borrowing from the Federal Reserve banks?Borrowing from the Federal Reserve banks is usually the lowest interest-cost source of funds. However, there are strict rules for borrowing by banks and borrowing for rate arbitrage is prohibited, although there is some evidence it does occur.15-8. How is a discount window loan from the Federal Reserve secured?A discount window loan must be secured by collateral acceptable to a Federal Reserve bank (usually U.S. government securities). Most banks keep government securities in the vaults of the Federal Reserve for this purpose. The Federal Reserve bank will also accept some government agency securities and high-grade commercial paper as collateral.18415-9. Posner State Bank borrows $10 million in adjustment credit from the Federal Reserve Bank of Cleveland. Can you show the correct entries for the granting and repayment of this loan? The proper entries are:Step 1 - Securing a Loan from the Fed.Posner State BankFederal Reserve Bank of ClevelandStep 2 - Repaying the Loan to the Fed.Posner State BankFederal Reserve Bank of Cleveland15-10. Why were negotiable CDs developed?Negotiable CDs were developed by banks to attract large corporate deposits and savings from wealthy individuals.15-11. What are the advantages and disadvantages of CDs as a bank funding source? Negotiable CDs offer a way to attract large amounts of funds quickly and for a known time period. However, these funds are highly interest sensitive and often are withdrawn as soon as the maturity date arrives unless a banker aggressively bids in terms of yield to keep the CD.18515-12. Suppose a bank customer purchases a $1 million, 90-day CD, carrying a promised 6 percent annual yield. How much in interest income will the customer earn when this 90-day instrument matures? What total volume of funds will be available to the depositor at the end of 90 days?Interest Income = Principal * Days to Maturity * Annual RateTo Customer 360 days Of Interestx 0.06= $1,000,000 x 1360= $15,000Total amount = Principal + Interestdue Customer = $1,000,000 + $15,000= $1,015,00015-13. Where do Eurodollars come from?Eurodollars arise from dollar deposits made in banks and at branch offices outside U.S. territory. Many Eurodollar deposits arise from U.S. balance-of-payments deficits that give foreigners claims on U.S. assets and from the need to pay in dollars for some international commodities (such as oil) that are denominated principally in U.S. dollars.15-14. How does a bank gain access to funds from the Eurocurrency markets?Access to these funds is obtained by contacting correspondent banks by telephone, wire, or cable.15-15. Suppose that JP Morgan-Chase elects to borrow $250 million from one of its London branches, then loans the borrowed funds for a week to a security dealer, and then returns the borrowed funds to its branch office in London. Can you trace through what accounting entries must be made? What if JP Morgan-Chase had decided instead to borrow the $250 million from a foreign bank not related to JP Morgan-Chase? How do the accounting entries differ in these two cases?If JP Morgan-Chase borrows from its own branch office the entries would appear as possible:Home Office of JP Morgan-Chase BankForeign Branch Office of JP Morgan-ChaseAssets Liabilities186When JP Morgan-Chase's home office makes a loan to a security dealer the entries are:Home Office of JP Morgan-Chase BankWhen the Loan is repaid and funds are returned to JP Morgan-Chase’s foreign branch we have:Home Office of JP Morgan-Chase BankForeign Branch Office of JP Morgan-ChaseIf, instead, JP Morgan-Chase borrows from another bank abroad not affiliated with JP Morgan-Chase, the entries would appear as follows:JP Morgan-ChaseU.S. Bank Serving as Correspondent to Foreign BankForeign Bank Lending to JP Morgan-Chase Bank187Deposit at U.S.CorrespondentBank +$250 mill.Eurodollar loan toJP-Morgan ChaseBank -$250 mill.When JP Morgan-Chase repays its loans we have:JP Morgan-Chase BankU.S. Bank Serving as Correspondent to Foreign BankForeign Bank Lending Eurodollars15-16. What is commercial paper?Commercial paper is a high-quality, short-term debt obligation issued by a large corporation with an excellent credit rating to provide for short-term cash needs.15-17. Suppose that the finance company affiliate of Citicorp issues $325 million in 9 day commercial paper to interested investors and uses the proceeds to purchase loans from Citibank. What accounting entries should be made on the balance sheets of Citibank and Citicorp's finance company affiliates?The appropriate entries for the above transaction are:Step 1 - Commercial Paper is Sold by the Affiliated Finance Company188CitibankFinance AffiliateStep 2 - The Affiliated Finance Company Purchases Loans from CitibankCitibankFinance Affiliate15-18. How do RPs arise?RPs are agreements to sell securities temporarily by a borrower of funds to a lender of funds with the borrower agreeing to buy back the securities at a guaranteed price at a set time in the future.15-19. What are the principal advantages to the borrower of funds under an RP agreement?RPs are a low-cost and low-risk way of borrowing loanable funds for short periods of time (usually 3 or 4 days). They are low risk because they are essentially a collateralized loan. The securities that are sold as part of the agreement act as collateral.15-20. What long-term nondeposit funds sources do banks draw upon today? How do these interest costs differ from most money market borrowings?Long-term nondeposit funds include mortgages, capital notes, and debentures. Generally, the interest costs on these funds sources are substantially higher than money market loans but are more stable usually.15-21. What is the funds gap for a bank?189The funds gap is the difference between current and projected credit and deposit flows that creates a need for raising additional bank reserves or for profitably investing any excess reserves that may arise.15-22. Suppose that Bankers Trust Company of New York estimates next week's new loan demand at $325 million and customer drawings on confirmed credit lines of $510 million, while new deposits next week are projected to equal $680 million. If the bank also plans to acquire $420 million in corporate and government bonds next week, what is the bank's projected funds gap?The expected funds gap (with all figures in millions of dollars) would be:Projected = $325 + $510 + $420 - $680 = $575.Funds Gap15-23. What factors must a bank manager weigh in choosing among the various nondeposit sources of bank funding available today?A bank manager must weigh factors such as relative costs, risk, length of time funds are needed, size of bank and its funding need, and regulations in choosing what nondeposit funds sources to use. Other factors held constant, bank management will seek out the lowest cost nondeposit funding sources available subject to the risk of availability problems and the danger of interest-rate volatility. When funds are needed for longer periods, negotiable CDs and Eurodollars are usually the preferred sources whereas very short-term cash needs usually will be met by Federal funds and RPs or by borrowing from the Federal Reserve banks. However, regulations impose reserve requirements on some funding sources (e.g., CDs) which increases their cost and these rules limit access to some sources (e.g., borrowings from the Fed's Discount Window).Problems15-1. Robertson State Bank of Clayton decides to loan $70 million of its reserves at the Fed to Tenison National Security Bank for 24 hours. In turn, Tenison National plans to loan the funds to a security dealer for 24 hours and then return the funds to Robertson State Bank. The correct accounting entries are:Step 1 - Lending the $70 millionRobertson State Bank190Tenison National BankStep 2 - Loaning the Borrowed FundsTenison National BankStep 3 - Repaying the Loan of Federal FundsRobertson State BankTenison National Bank15-2. Masoner National Bank holds most of its correspondent deposits with Flagg Metrocenter Bank which automatically reinvests any surpluses which Masoner may have. This morning Masoner has a correspondent deposit surplus of $11 million expected to last for 48 hours. Flagg will loan this surplus for two business days to Secoro Central City Bank and then the funds will be returned to Masoner's correspondent deposit at Flagg Metrocenter Bank.Step 1 - Lending Federal Funds to a CorrespondentMasoner National Bank191loaned +11 mill.Flagg Metrocenter BankStep 2 - The Correspondent Bank Loans Funds to Another BankFlagg Metrocenter BankSecoro Central City BankStep 3 - Repaying the Loan to the Respondent BankMasoner National BankFlagg Metrocenter Bank19215-3. Relgade National Bank secures adjustment credit from the Federal Reserve Bank of San Francisco in the amount of $32 million for a term of 7 days. Please show the proper entries for granting this loan and then paying off the loan.The correct entries are:Step 1 - Receiving a Loan from the FedRelgade National BankFederal Reserve Bank of San FranciscoStep 2 - Repaying the Fed's loanRelgade National BankFederal Reserve Bank of San Francisco15-4. Itec Corporation purchases a 45-day negotiable CD with a $5 million denomination from Payson Guaranty Bank and Trust, bearing a 6.75 percent annual yield. How much in interest will the bank have to pay when this CD matures? What amount in total will the bank have to pay back to Itec at the end of 45 days?Interest Owed 45To Itec Corp. = $5,000,000 * 360 * 0.0675By Bank= $42,187.50193Total amountowed Itec = $5,000,000 + $42,187.50in 45 days in principle in interest= $5,042,187.5015-5. International Commerce Bank borrows $125 million overnight through a repurchase agreement (RP) collateralized by Treasury bills. The current RP rate is 4.5 percent. How much in interest cost will the bank have to pay?Interest cost= $15,624.50of RP = $125,000,000 x 0.045 x 136015-6. National Commerce Bank of New York expects new deposit inflows next month of $330 million and deposit withdrawals of $275 million. The bank's economics department has projected the new loan demand will reach $621 million and customers with approved credit lines will need $266 million in cash. The bank will sell $480 million in securities, but plans to add $155 million in new securities to its portfolio. What is the bank's projected funds gap?The estimated funds gap (with all figures in millions of dollars) is:Projectedfunds gap = $621 + $266 + [ $155 - $480 ] - [ $300 - $275 ]= $537 million15-7. First National borrowed $150 million in Federal funds from JP Morgan Chase Bank in New York City for 24 hours. After the loan was repaid JP Morgan-Chase loaned $100 million in federal funds to Texas Commerce Bank of Houston.(a) Illustrate these transactions using T-account entries.194(b) The interest income generated for JP Morgan-Chase from the above transactions was:1. Manufacturers' Loan: 0.0785 X $150 Million X 1/360 = $32,7082. Texas Commerce Loan: 0.0792 X $100 Million X 2/360 = $44,00015-8. BancOne of Ohio issues a 3-month (90-day) negotiable CD for $14 million to Travelers Insurance, bearing an annual 360-day yield of 8.47 percent. The value of the CD (including interest income) on its maturity date is:= Principal + (Principal * Days to Maturity / 360 * Annual Interest Rate)= $14 million + ($14 million * 90 / 360 * 0.0847) = $14.29645 millionThe amount of interest income Travelers will earn is:$14 million *90 / 360 * 0.0847 = $296,450.On the basis of a 365-day year Travelers' will earn365/360 * 0.0847 = 0.0859 or 8.59%.15-9. As a result of heavy loan demand experienced by banks within its holding company,195Interstate National Bank plans to raise $850 million in short-term funds this week, of which about $835 million will be used to meet these new loan requests. Current annual interest rates on alternative sources of funds are:Market Interest Rates Noninterest Cost RatesFederal Funds 8.73% 0.25%Negotiable CDs 8.69 0.25Eurodollars 9.11 0.35Commercial paper 8.65 0.50Fed. Discount Rate 7.25 0.25Calculate the effective cost rates on the above sources for Interstate and make a management decision on what sources to use.Effective Federal Funds Cost Rate =Million$835Million $850x0.0025Million$850x0.0873+=million835$million$2.125million $74.205+= 9.14%Effective CD Cost Rate =million$835million $850*0.0025million$850*0.0869+=million$835million$2.125million $73.865+= 9.10%Effective Eurodollar Cost Rate =million$835million $850*0.0035million$850*0.0911+=million$830million$2.975million77.435$+= 9.63%Effective Commercial Paper Cost Rate =million835$million $850*0.0050million$850*0.0865+196=million$835million$4.25million $73.525+= 9.31%Effective Cost of Borrowing from the Fed =million835$million $850*0.0025million$850*0.0725+=million835$million$2.125million$61.625+= 7.63%The cheapest source of all would be borrowing from the Federal Reserve bank. However, the bank has borrowed from the Fed in each of the past two weeks. Thus, it has probably come close to "wearing out its welcome" at the Reserve bank and, at least for the next week, should probably plan on borrowing from the next cheapest source - in this case, the Federal funds market.15-10. Hamilton Security Bank wants to raise $80 million in money market funds to cover a loan request from one of its largest corporate customers, who needs a 6-week loan. However, current forecasts call for a rise in money market interest rates over the next six weeks. Current money market rates are given below:Source Current RateFederal Funds 8.72%Discount Window at the Federal Reserve 7.00CDs (prime rated): One Month 8.45Three Months 8.49Six Months 8.58Eurodollar Deposits(Three Months) 8.58Commercial Paper: One Month 8.55Three Months 8.42What would you recommend to the bank's funds management department regarding how and where to raise the funds needed?Federal funds could be used to fund this loan, but not only do they happen to be the most expensive source in terms of interest cost right now, but also the Fed funds rate is very sensitive to market pressures and, therefore, will rise along with other market interest rates if the bank's forecast turns out to be correct. The Discount Window at the Federal Reserve looks very attractive, but the Fed prohibits borrowing to relend. Either 3-month CDs or 3-month commercial paper appear to represent good alternatives because the bank, presumably, can lock in the interest cost to fund this loan for the entire life of the loan. Assuming that the money market shares the expectations of the bank that interest rates will rise over the next six weeks, the bank will very likely have to pay a premium over the current rates on either the CDs or commercial paper. However, locking in these rates would still represent the better alternative.197Alternative Scenario:Given: Hamilton's economists are wrong and money market rates decline significantly over the next six weeks. How might your recommendations to the bank's funds management department change on how and where to raise the funds needed?Significantly declining interest rates would make shorter-term sources much more attractive to the bank. Federal funds, for example, although currently the most expensive source, may well be a good alternative, since the federal funds rate is very sensitive to interest rate changes. One-month CDs would also be a good alternative, as would one-month commercial paper. With the shorter maturities, the bank could readjust its costs downward as the interest rates continue to fall, maintaining the spread between the rate the bank is charging the borrower, which will be declining as rates fall, and the rate it is paying for its funds.Web Site Problems1. Which banks in the U.S. banking system seem to rely most heavily on deposits as a source of funding and which on nondeposit borrowings and liability management? To find out, select the name of a small local bank (or banks) in your area and look it up in the appropriate FDIC web site. Enter the bank’s name, city and state and determine its ratio of total deposits to total assets in the latest report available. Now compare this ratio to the same deposit to asset ratio for Bank of America and JP Morgan-Chase Bank. What did you find? Can you explain the reasons behind the different ratio values you observed?After examining the UBPR for the First National Bank of Edmond as well as Bank of America and JP Morgan-Chase (of New York) the following table can be formed.As can be seen, the First National Bank of Edmond has a much higher depositor base. Both of the other banks are very large banks and large banks tend to rely less on core deposits. However there are differences even between these large banks. JP Morgan-Chase is in New York City and has even less of a depositor bases that Bank of America. It must rely more heavily on liability management than Bank of America.198。

《旅游英语视听说》Chapter 15 (1)

《旅游英语视听说》Chapter 15 (1)
Brief information from the video
It is a Panama hat. We got Ann this basket. We have a special bracelet for Kitty.
What Souvenirs Will Matt Bring Back?
4.__F___Souvenirs should be grand or expensive 5.__T___All gifts should come from the heart. Don't buy
something simply for the sake of buying.
Part Two: Be Attractive to Watch
15 Chapter
Contents
1. At very beginning, you will learn some useful words and phrases.
2. In Part One, you will learn some informative and important tourism knowledge.
Part Four: Be Interesting to Speak
Column A
Column B
1.purpose of shopping 2.gift receiver 3.title of the book 4.way of payment 5.cost of the souvenir
A. cash B. to buy souvenirs C. Five Themes. D. for friends E. $40
A basket with good quality. The underneath thread is very thin and tight. You can hold liquid there and it won’t leak. It is made by the local women.

牛津英语译林版七年级下册阅读训练 --7下英语读本 Chapter 15 - 教师版

牛津英语译林版七年级下册阅读训练 --7下英语读本 Chapter 15 - 教师版

Chapter 15诵读Help in need帮助有需要帮助的I often go to the park near my home. I always see a little boy there. He wears a white T-shirt and black trousers. In front of him is a basket of flowers. He sells flowers from early morning to late at night.我经常去我家附近的公园。

我总是在那里看到一个小男孩。

他穿着白色的t恤和黑色的裤子。

在他面前的是一篮花。

他从早到晚卖花。

Some other boys also sell flowers in front of the park. But no one is like this boy. He asks everyone to buy his flowers. When he sees me, he always follows me and says, “Please buy a flower. Pl ease.” I don’t like that, and I never buy any flowers from him.其他一些男孩也在公园前面卖花。

但是没有人能像这个男孩。

他让每个人都买他的花。

当他看到我,他总是跟着我说,“请买一朵花。

”请。

“我不喜欢这样,我从来没有从他那里买过花。

Today, I go to the park again. The boy is there. He sits in the same place. I don’t want him to follow me, so I don’t look at him. I walk past him into the park.今天,我又去了公园。

英语国家概况Chapter15

英语国家概况Chapter15

James Madison, fourth president of the United States, is often regarded as the "Father of the Constitution." (The American History)
Ⅵ.Territorial Expansion and Westward Movement (开拓疆土和西进运动)
Chapter 15 American History (I) (1600-1900)
I. II. III. IV. V. VI.
Discovery of the New World The Colonial Period The War of Independence A New Form of Government The War of 1812 Territorial Expansion and Westward Movement VII. The Civil War VIII. Rapid Growth of Capitalism after the Civil War
contents
I. Discovery of the New World
Think about the following questions. 1. Who are the original American people? 2. Do you know where the name “America” came from?
3. Struggle during ratification ①Between: a. Federalists –Federalist Paper b. Anti-federalists, concerned the absence of Bill of Rights in the Constitution. ②Final: Bill of Rights.

海底两万里第一部分l15章批注

海底两万里第一部分l15章批注

海底两万里第一部分l15章批注English Answer:Chapter 15: The Nautilus.In this chapter, the narrator provides a detailed description of the Nautilus, the submarine that will take him on his journey to the depths of the sea. The narrator describes the Nautilus as a marvel of engineering, a vessel that is both powerful and graceful. He notes that the Nautilus is made of a metal that is stronger than steel, and that it is capable of withstanding the immense pressure of the ocean depths. The narrator also describes the Nautilus's interior, which is spacious and well-equipped. He notes that the Nautilus has a library, a dining room, and a laboratory, as well as a number of other amenities.The narrator also provides some information about the crew of the Nautilus. He notes that the crew is small, consisting of only a few men, and that they are all loyalto Captain Nemo. The narrator also notes that the crew is highly skilled, and that they are capable of operating the Nautilus in even the most difficult conditions.In this chapter, the narrator also provides some information about Captain Nemo himself. He notes that Nemo is a mysterious figure, and that little is known about his past. However, the narrator does note that Nemo is a brilliant scientist and engineer, and that he is dedicated to exploring the depths of the sea.The narrator's description of the Nautilus and its crew provides the reader with a sense of the wonder and excitement of the journey that lies ahead. The Nautilus is a vessel that is capable of taking the narrator to places that no human has ever been before, and the crew is a group of skilled and dedicated individuals who are committed to helping Nemo achieve his goals.Chapter 16: The Black River.In this chapter, the narrator and Captain Nemo ventureinto the Black River, a mysterious underwater river that flows through the depths of the ocean. The Black River is a dangerous place, and the narrator and Nemo must navigateits treacherous currents and avoid its hidden dangers.The narrator describes the Black River as a vast and powerful river, with currents that are strong enough to sweep away even the largest ships. He also notes that the river is home to a variety of dangerous creatures,including giant squid and electric eels.The narrator and Nemo travel down the Black River in the Nautilus, and they encounter a number of challenges along the way. They are attacked by giant squid, and they must navigate through a narrow and treacherous gorge. However, the narrator and Nemo are able to overcome these challenges, and they eventually reach the end of the Black River.The journey down the Black River is a dangerous and exciting adventure, and it provides the reader with a sense of the wonder and danger of the ocean depths. The narratorand Nemo are able to overcome the challenges that they face, and they emerge from the Black River with a renewed senseof determination.Chapter 17: The Coral Forest.In this chapter, the narrator and Captain Nemo visit a coral forest, a vast and beautiful underwater ecosystem.The narrator describes the coral forest as a world of its own, with its own unique plants and animals.The narrator and Nemo spend several days exploring the coral forest, and they encounter a variety of creatures, including colorful fish, giant clams, and sea turtles. The narrator also notes that the coral forest is home to a number of predators, including sharks and moray eels.The narrator and Nemo are fascinated by the beauty and diversity of the coral forest, and they spend many hours observing its inhabitants. The narrator also notes that the coral forest is a fragile ecosystem, and that it is important to protect it from damage.The visit to the coral forest is a peaceful andrelaxing experience, and it provides the reader with a sense of the wonder and beauty of the ocean depths. The narrator and Nemo are able to observe the coral forest in all its glory, and they emerge from it with a renewed sense of appreciation for the beauty of the natural world.中文回答:第15章,鹦鹉螺号。

期权期货与其他衍生产品第九版课后习题与答案Chapter (15)

期权期货与其他衍生产品第九版课后习题与答案Chapter (15)

CHAPTER 15The Black-Scholes-Merton ModelPractice QuestionsProblem 15.1.What does the Black –Scholes –Merton stock option pricing model assume about the probability distribution of the stock price in one year? What does it assume about theprobability distribution of the continuously compounded rate of return on the stock during the year?The Black –Scholes –Merton option pricing model assumes that the probability distribution of the stock price in 1 year (or at any other future time) is lognormal. It assumes that thecontinuously compounded rate of return on the stock during the year is normally distributed.Problem 15.2.The volatility of a stock price is 30% per annum. What is the standard deviation of the percentage price change in one trading day?The standard deviation of the percentage price change in time t ∆is where σ is the volatility. In this problem 03=.and, assuming 252 trading days in one year, 12520004t ∆=/=. so that 00019=.=. or 1.9%.Problem 15.3.Explain the principle of risk-neutral valuation.The price of an option or other derivative when expressed in terms of the price of theunderlying stock is independent of risk preferences. Options therefore have the same value in a risk-neutral world as they do in the real world. We may therefore assume that the world is risk neutral for the purposes of valuing options. This simplifies the analysis. In a risk-neutral world all securities have an expected return equal to risk-free interest rate. Also, in arisk-neutral world, the appropriate discount rate to use for expected future cash flows is the risk-free interest rate.Problem 15.4.Calculate the price of a three-month European put option on a non-dividend-paying stock with a strike price of $50 when the current stock price is $50, the risk-free interest rate is 10% per annum, and the volatility is 30% per annum.In this case 050S =, 50K =, 01r=., 03σ=., 025T =., and12102417000917d d d ==.=-.=.The European put price is 0102550(00917)50(02417)N e N -.⨯.-.--.0102550046345004045237e -.⨯.=⨯.-⨯.=.or $2.37.Problem 15.5.What difference does it make to your calculations in Problem 15.4 if a dividend of $1.50 is expected in two months?In this case we must subtract the present value of the dividend from the stock price before using Black –Scholes-Merton. Hence the appropriate value of 0S is01667010501504852S e -.⨯.=-.=.As before 50K =, 01r =., 03σ=., and 025T =.. In this case12100414001086d d d ==.=-.=-.The European put price is 0102550(01086)4852(00414)N e N -.⨯..-.-. 010255005432485204835303e -.⨯.=⨯.-.⨯.=. or $3.03.Problem 15.6.What is implied volatility? How can it be calculated?The implied volatility is the volatility that makes the Black –Scholes-Merton price of an option equal to its market price. The implied volatility is calculated using an iterativeprocedure. A simple approach is the following. Suppose we have two volatilities one too high (i.e., giving an option price greater than the market price) and the other too low (i.e., giving an option price lower than the market price). By testing the volatility that is half way between the two, we get a new too-high volatility or a new too-low volatility. If we search initially for two volatilities, one too high and the other too low we can use this procedure repeatedly to bisect the range and converge on the correct implied volatility. Other more sophisticated approaches (e.g., involving the Newton-Raphson procedure) are used in practice.Problem 15.7.A stock price is currently $40. Assume that the expected return from the stock is 15% and its volatility is 25%. What is the probability distribution for the rate of return (with continuous compounding) earned over a two-year period?In this case 015=.μ and 025=.σ. From equation (15.7) the probability distribution for the rate of return over a two-year period with continuous compounding is:⎪⎪⎭⎫⎝⎛-ϕ225.0,225.015.022i.e.,)03125.0,11875.0(ϕThe expected value of the return is 11.875% per annum and the standard deviation is 17.7%per annum.Problem 15.8.A stock price follows geometric Brownian motion with an expected return of 16% and a volatility of 35%. The current price is $38.a) What is the probability that a European call option on the stock with an exercise price of $40 and a maturity date in six months will be exercised?b) What is the probability that a European put option on the stock with the same exercise price and maturity will be exercised?a) The required probability is the probability of the stock price being above $40 in six months time. Suppose that the stock price in six months is T S⎥⎦⎤⎢⎣⎡⨯⎪⎪⎭⎫ ⎝⎛-+5.035.0,5.0235.016.038ln ~ln 22ϕT Si.e.,()2247.0,687.3~ln ϕT SSince ln 403689=., we require the probability of ln(S T )>3.689. This is3689368711(0008)0247N N .-.⎛⎫-=-. ⎪.⎝⎭Since N(0.008) = 0.5032, the required probability is 0.4968.b) In this case the required probability is the probability of the stock price being less than $40 in six months time. It is10496805032-.=.Problem 15.9.Using the notation in the chapter, prove that a 95% confidence interval for T S is between22(2)196(2)19600andT T S e S e -/-.-/+.μσμσFrom equation (15.3):⎥⎦⎤⎢⎣⎡⎪⎪⎭⎫ ⎝⎛-+T T S S T 220,2ln ~ln σσμϕ95% confidence intervals for ln T S are therefore20ln ()1962S T +--.σμand20ln ()1962S T +-+.σμσ95% confidence intervals for T S are therefore2200ln (2)196ln (2)196and S T S T e e +-/-.+-/+.μσμσi.e.22(2)196(2)19600andT T S e S e -/-.-/+.μσμσProblem 15.10.A portfolio manager announces that the average of the returns realized in each of the last 10 years is 20% per annum. In what respect is this statement misleading?This problem relates to the material in Section 15.3. The statement is misleading in that a certain sum of money, say $1000, when invested for 10 years in the fund would have realized a return (with annual compounding) of less than 20% per annum.The average of the returns realized in each year is always greater than the return per annum (with annual compounding) realized over 10 years. The first is an arithmetic average of the returns in each year; the second is a geometric average of these returns.Problem 15.11.Assume that a non-dividend-paying stock has an expected return of μ and a volatility of σ. An innovative financial institution has just announced that it will trade a derivative that pays off a dollar amount equal to ln S T at time T where T S denotes the values of the stock price at time T .a) Use risk-neutral valuation to calculate the price of the derivative at time t in term of the stock price, S, at time tb) Confirm that your price satisfies the differential equation (15.16)a) At time t , the expected value of ln S T is from equation (15.3) 2ln (/2)()S T t μσ+--In a risk-neutral world the expected value of ln S T is therefore2ln (/2)()S r T t σ+--Using risk-neutral valuation the value of the derivative at time t is()2[ln (/2)()]r T t e S r T t σ--+--b) If()2[ln (/2)()]r T t f e S r T t σ--=+--then()()2()2()2()22[ln (/2)()]/2r T t r T t r T t r T t fre S r T t e r tf e S S f e S S σσ--------∂=+----∂∂=∂∂=-∂The left-hand side of the Black-Scholes-Merton differential equation is()222()2ln (/2)()(/2)/2ln (/2)()r T t r T t e r S r r T t r r e r S r r T t rfσσσσ----⎡⎤+----+-⎣⎦⎡⎤=+--⎣⎦=Hence the differential equation is satisfied.Problem 15.12.Consider a derivative that pays off n T S at time T where T S is the stock price at that time. When the stock pays no dividends and its price follows geometric Brownian motion, it can be shown that its price at time t ()t T ≤ has the form()n h t T S ,where S is the stock price at time t and h is a function only of t and T .(a) By substituting into the Black –Scholes –Merton partial differential equation derive an ordinary differential equation satisfied by ()h t T ,.(b) What is the boundary condition for the differential equation for ()h t T ,? (c) Show that2[05(1)(1)]()()n n r n T t h t T eσ.-+--,= where r is the risk-free interest rate and σ is the stock price volatility.If ()()n G S t h t T S ,=, then n t G t h S ∂/∂=, 1n G S hnS -∂/∂=, and 222(1)n G S hn n S -∂/∂=- where t h h t =∂/∂. Substituting into the Black –Scholes –Merton differential equation we obtain21(1)2t h rhn hn n rh σ++-=The derivative is worth n S when t T =. The boundary condition for this differential equation is therefore ()1h T T ,= The equation2[05(1)(1)]()()n n r n T t h t T e σ.-+--,=satisfies the boundary condition since it collapses to 1h = when t T =. It can also be shown that it satisfies the differential equation in (a). Alternatively we can solve the differential equation in (a) directly. The differential equation can be written21(1)(1)2t h r n n n h σ=----The solution to this is21ln [(1)(1)]()2h r n n n T t σ=-+--or2[05(1)(1)]()()n n r n T t h t T e σ.-+--,=Problem 15.13.What is the price of a European call option on a non-dividend-paying stock when the stock price is $52, the strike price is $50, the risk-free interest rate is 12% per annum, the volatility is 30% per annum, and the time to maturity is three months?In this case 052S =, 50K =, 012r =., 030=.σ and 025T =..212105365003865d d d ==.=-.=. The price of the European call is 01202552(05365)50(03865)N e N -.⨯..-. 00352070425006504e -.=⨯.-⨯. 506=. or $5.06.Problem 15.14.What is the price of a European put option on a non-dividend-paying stock when the stock price is $69, the strike price is $70, the risk-free interest rate is 5% per annum, the volatility is 35% per annum, and the time to maturity is six months?In this case 069S =, 70K =, 005r =., 035=.σ and 05T =..212101666000809d d d ==.=-.=-. The price of the European put is 0050570(00809)69(01666)e N N -.⨯..--. 002570053236904338e -.=⨯.-⨯.640=. or $6.40.Problem 15.15.Consider an American call option on a stock. The stock price is $70, the time to maturity is eight months, the risk-free rate of interest is 10% per annum, the exercise price is $65, and the volatility is 32%. A dividend of $1 is expected after three months and again after sixmonths. Show that it can never be optimal to exercise the option on either of the two dividend dates. Use DerivaGem to calculate the price of the option.Using the notation of Section 15.12, 121D D ==, 2()0101667(1)65(1)107r T t K e e ---.⨯.-=-=., and 21()01025(1)65(1)160r t t K e e ---.⨯.-=-=.. Since 2()1(1)r T t D K e --<- and 21()2(1)r t t D K e --<-It is never optimal to exercise the call option early. DerivaGem shows that the value of the option is 1094..Problem 15.16.A call option on a non-dividend-paying stock has a market price of $2.50. The stock price is $15, the exercise price is $13, the time to maturity is three months, and the risk-free interest rate is 5% per annum. What is the implied volatility?In the case 25c =., 015S =, 13K =, 025T =., 005r =.. The implied volatility must becalculated using an iterative procedure.A volatility of 0.2 (or 20% per annum) gives 220c =.. A volatility of 0.3 gives 232c =.. A volatility of 0.4 gives 2507c =.. A volatility of 0.39 gives 2487c =.. By interpolation the implied volatility is about 0.396 or 39.6% per annum.The implied volatility can also be calculated using DerivaGem. Select equity as theUnderlying Type in the first worksheet. Select Black-Scholes European as the Option Type. Input stock price as 15, the risk-free rate as 5%, time to exercise as 0.25, and exercise price as 13. Leave the dividend table blank because we are assuming no dividends. Select the button corresponding to call. Select the implied volatility button. Input the Price as 2.5 in the second half of the option data table. Hit the Enter key and click on calculate. DerivaGem will show the volatility of the option as 39.64%.Problem 15.17.With the notation used in this chapter (a) What is ()N x '?(b) Show that ()12()()r T t SN d Ke N d --''=, where S is the stock price at time t21d =22d =(c) Calculate 1d S ∂/∂ and 2d S ∂/∂. (d) Show that when()12()()r T t c SN d Ke N d --=-()21()(r T t c rKe N d SN d t --∂'=--∂ where c is the price of a call option on a non-dividend-paying stock. (e) Show that 1()c S N d ∂/∂=.(f) Show that the c satisfies the Black –Scholes –Merton differential equation.(g) Show that c satisfies the boundary condition for a European call option, i.e., thatmax(0)c S K =-, as t tends to T.(a) Since ()N x is the cumulative probability that a variable with a standardized normal distribution will be less than x , ()N x ' is the probability density function for a standardized normal distribution, that is,22()x N x -'=(b)12()(N d N d ''=+2221()22d d T t σσ⎡⎤=---⎢⎥⎣⎦221()exp ()2N d d T t σσ⎡⎤'=--⎢⎥⎣⎦Because22d =it follows that()21exp ()2r T t Ked T t S σσ--⎡⎤--=⎢⎥⎣⎦As a result()12()()r T t SN d Ke N d --''=which is the required result.(c)22212S K d σσ==Hence1d S ∂=∂ Similarly222d σ=and2d S ∂=∂ Therefore:12d d S S∂∂=∂∂(d)()12()()12122()()()()()r T t r T t r T t c SN d Ke N d d d c SN d rKe N d Ke N d t t t------=-∂∂∂''=--∂∂∂ From (b):()12()()r T t SN d Ke N d --''=Hence()1221()()r T t d d c rKe N d SN d t tt --∂∂∂⎛⎫'=-+- ⎪∂∂∂⎝⎭ Since12d d -=12(d d t t t∂∂∂-=∂∂∂=Hence()21()(r T t c rKe N d SN d t --∂'=--∂(e) From differentiating the Black –Scholes –Merton formula for a call price weobtain()12112()()()r T t d d cN d SN d Ke N d S S dS--∂∂∂''=+-∂∂ From the results in (b) and (c) it follows that1()cN d S ∂=∂(f) Differentiating the result in (e) and using the result in (c), we obtain21121()(d cN d S SN d ∂∂'=∂∂'= From the results in d) and e)222()2122211()121()(21()(2[()()]r T t r T t c c c rS S rKe N d SN d t S S rSN d S N d r SN d Ke N d rcσσ----∂∂∂'++=--∂∂∂'++=-=This shows that the Black –Scholes –Merton formula for a call option does indeed satisfy the Black –Scholes –Merton differential equation(g) Consider what happens in the formula for c in part (d) as t approaches T . IfS K >, 1d and 2d tend to infinity and 1()N d and 2()N d tend to 1. If S K <, 1d and 2d tend to zero. It follows that the formula for c tends to max(0)S K -,.Problem 15.18.Show that the Black –Scholes –Merton formulas for call and put options satisfy put –call parity.The Black –Scholes –Merton formula for a European call option is 012()()rT c S N d Ke N d -=- so that 012()()rT rT rT c Ke S N d Ke N d Ke ---+=-+ or 012()[1()]rT rT c Ke S N d Ke N d --+=+- or 012()()rT rT c Ke S N d Ke N d --+=+-The Black –Scholes –Merton formula for a European put option is 201()()rT p Ke N d S N d -=--- so that 02010()()rT p S Ke N d S N d S -+=---+ or 0201()[1()]rT p S Ke N d S N d -+=-+-- or 0201()()rT p S Ke N d S N d -+=-+ This shows that the put –call parity result 0rT c Ke p S -+=+ holds.Problem 15.19.A stock price is currently $50 and the risk-free interest rate is 5%. Use the DerivaGemsoftware to translate the following table of European call options on the stock into a table of implied volatilities, assuming no dividends. Are the option prices consistent with the assumptions underlying Black –Scholes –Merton?Using DerivaGem we obtain the following table of implied volatilitiesBlack-Scholes European as the Option Type. Input stock price as 50, the risk-free rate as 5%, time to exercise as 0.25, and exercise price as 45. Leave the dividend table blank because we are assuming no dividends. Select the button corresponding to call. Select the implied volatility button. Input the Price as 7.0 in the second half of the option data table. Hit theEnter key and click on calculate. DerivaGem will show the volatility of the option as 37.78%. Change the strike price and time to exercise and recompute to calculate the rest of the numbers in the table.The option prices are not exactly consistent with Black –Scholes –Merton. If they were, the implied volatilities would be all the same. We usually find in practice that low strike price options on a stock have significantly higher implied volatilities than high strike price options on the same stock. This phenomenon is discussed in Chapter 20.Problem 15.20.Explain carefully why Black’s approach to evaluating an American call option on a dividend-paying stock may give an approximate answer even when only one dividend is anticipated. Does the answer given by Black’s approach understate or overstate the true option value? Explain your answer.Black’s approach in effect assumes that the holder of option must decide at time zero whether it is a European option maturing at time n t (the final ex-dividend date) or a European optionmaturing at time T . In fact the holder of the option has more flexibility than this. The holder can choose to exercise at time n t if the stock price at that time is above some level but nototherwise. Furthermore, if the option is not exercised at time n t , it can still be exercised attime T .It appears that Black ’s approach should understate the true option value. This is because the holder of the option has more alternative strategies for deciding when to exercise the option than the two strategies implicitly assumed by the approach. These alternative strategies add value to the option.However, this is not the whole story! The standard approach to valuing either an American or a European option on a stock paying a single dividend applies the volatility to the stock price less the present value of the dividend. (The procedure for valuing an American option is explained in Chapter 21.) Black’s approach when considering exercise just prior to the dividend date applies the volatility to the stock price itself. Black’s approach thereforeassumes more stock price variability than the standard approach in some of its calculations. In some circumstances it can give a higher price than the standard approach.Problem 15.21.Consider an American call option on a stock. The stock price is $50, the time to maturity is 15 months, the risk-free rate of interest is 8% per annum, the exercise price is $55, and the volatility is 25%. Dividends of $1.50 are expected in 4 months and 10 months. Show that it can never be optimal to exercise the option on either of the two dividend dates. Calculate the price of the option.With the notation in the text12121500333308333125008and 55D D t t T r K ==.,=.,=.,=.,=.=2()00804167155(1)180r T t K e e ---.⨯.⎡⎤⎢⎥⎣⎦-=-=. Hence2()21r T t D K e --⎡⎤⎢⎥⎣⎦<- Also:21()00805155(1)216r t t K e e ---.⨯.⎡⎤⎢⎥⎣⎦-=-=. Hence:21()11r t t D K e --⎡⎤⎢⎥⎣⎦<- It follows from the conditions established in Section 15.12 that the option should never be exercised early.The present value of the dividends is033330080833300815152864e e -.⨯.-.⨯..+.=.The option can be valued using the European pricing formula with:05028644713655025008125S K r T σ=-.=.,=,=.,=.,=.212100545003340d d d ==-.=-.=-.12()04783()03692N d N d =.,=.and the call price is00812547136047835503692417e -.⨯..⨯.-⨯.=. or $4.17.Problem 15.22.Show that the probability that a European call option will be exercised in a risk-neutral world is, with the notation introduced in this chapter, 2()N d . What is an expression for the value of a derivative that pays off $100 if the price of a stock at time T is greater than K ?The probability that the call option will be exercised is the probability that T S K > where T S is the stock price at time T . In a risk neutral world[]T T r S S T 220,)2/(ln ~ln σσϕ-+The probability that T S K > is the same as the probability that ln ln T S K >. This is21N ⎡⎤-2N =2()N d =The expected value at time T in a risk neutral world of a derivative security which pays off $100 when T S K > is therefore2100()N dFrom risk neutral valuation the value of the security at time zero is2100()rT e N d -Problem 15.23.Use the result in equation (15.17) to determine the value of a perpetual American put option on a non-dividend-paying stock with strike price K if it is exercised when the stock price equals H where H<K. Assume that the current stock price S is greater than H. What is the value of H that maximizes the option value? Deduce the value of a perpetual American put option with strike price K.If the perpetual American put is exercised when S=H , it provides a payoff of (K −H ). We obtain its value, by setting Q=K−H in equation (15.17), as 22/2/2)()(σσ-⎪⎭⎫ ⎝⎛-=⎪⎭⎫ ⎝⎛-=r r S H H K H S H K VNow1/222/222222/21/22/2222222)(212)(212-σσσ-σσ⎪⎭⎫ ⎝⎛σ⎪⎭⎫ ⎝⎛σ-+-+⎪⎭⎫ ⎝⎛σ-=⎪⎭⎫ ⎝⎛σ-+-⎪⎭⎫ ⎝⎛=⎪⎭⎫ ⎝⎛⎪⎭⎫ ⎝⎛σ-+⎪⎭⎫ ⎝⎛-=r r r r r S H S r H H K r S H H rK dH V d H H K r S H S H r S H K S H dH dVdV/dH is zero when222σ+=r rK H and, for this value of H , d 2V /dH 2 is negative indicating that it gives the maximum value of V .The value of the perpetual American put is maximized if it is exercised when S equals this value of H . Hence the value of the perpetual American put is 2/2)(σ-⎪⎭⎫ ⎝⎛-r H S H Kwhen H =2rK /(2r +σ2). The value is 2/22222)2(2σ-⎪⎪⎭⎫ ⎝⎛σ+σ+σr rK r S r K This is consistent with the more general result produced in Chapter 26 for the case where the stock provides a dividend yield.Problem 15.24.A company has an issue of executive stock options outstanding. Should dilution be taken into account when the options are valued? Explain you answer.The answer is no. If markets are efficient they have already taken potential dilution intoaccount in determining the stock price. This argument is explained in Business Snapshot 15.3.Problem 15.25.A company’s stock price is $50 and 10 million shares are outstanding. The company is considering giving its employees three million at-the-money five-year call options. Option exercises will be handled by issuing more shares. The stock price volatility is 25%, the five-year risk-free rate is 5% and the company does not pay dividends. Estimate the cost to the company of the employee stock option issue.The Black-Scholes-Merton price of the option is given by setting 050S =, 50K =, 005r =., 025σ=., and 5T =. It is 16.252. From an analysis similar to that in Section 15.10 the cost to the company of the options is 1016252125103⨯.=.+ or about $12.5 per option. The total cost is therefore 3 million times this or $37.5 million. Ifthe market perceives no benefits from the options the stock price will fall by $3.75.Further QuestionsProblem 15.26.If the volatility of a stock is 18% per annum, estimate the standard deviation of the percentage price change in (a) one day, (b) one week, and (c) one month.(a) %13.125218=(b) %50.25218=(c) %20.51218=Problem 15.27.A stock price is currently $50. Assume that the expected return from the stock is 18% per annum and its volatility is 30% per annum. What is the probability distribution for the stock price in two years? Calculate the mean and standard deviation of the distribution. Determine the 95% confidence interval.In this case 050S =, 018=.μ and 030=.σ. The probability distribution of the stock price in two years, T S , is lognormal and is, from equation (15.3), given by:⎥⎦⎤⎢⎣⎡⨯⎪⎭⎫ ⎝⎛-+23.0,2209.018.050ln ~ln 2ϕT Si.e.,)42.0,18.4(~ln 2ϕT SThe mean stock price is from equation (15.4)018203650507167e e .⨯.==.and the standard deviation is from equation (15.5)018503183e .⨯=.95% confidence intervals for ln T S are418196042and 418196042.-.⨯..+.⨯.i.e.,335and 501..These correspond to 95% confidence limits for T S of 335501and e e ..i.e.,2852and 15044..Problem 15.28. (Excel file)Suppose that observations on a stock price (in dollars) at the end of each of 15 consecutive weeks are as follows:30.2, 32.0, 31.1, 30.1, 30.2, 30.3, 30.6, 33.0,32.9, 33.0, 33.5, 33.5, 33.7, 33.5, 33.2Estimate the stock price volatility. What is the standard error of your estimate?The calculations are shown in the table below2009471001145i i uu =.=.∑∑and an estimate of standard deviation of weekly returns is:002884=.The volatility per annum is therefore 002079.=. or 20.79%. The standard error of this estimate is 00393=. or 3.9% per annum.Problem 15.29.A financial institution plans to offer a security that pays off a dollar amount equal to 2T S at time T .(a) Use risk-neutral valuation to calculate the price of the security at time t in terms of the stock price, S , at time t . (Hint: The expected value of 2T S can be calculatedfrom the mean and variance of T S given in section 15.1.)(b) Confirm that your price satisfies the differential equation (15.16).(a) The expected value of the security is 2[()]T E S From equations (15.4) and (15.5), at time t :2()2()()2()var()[1]T t T T t T t T E S Se S S e e μμσ---==-Since 22var()[()][()]T T T S E S E S =-, it follows that 22[()]var()[()]T T T E S S E S =+ so that 22222()()22()(2)()2[()][1]T t T t T t T T t E S S e e S e S e μσμμσ---+-=-+=In a risk-neutral world r μ= so that222(2)()ˆ[()]r T t T E S S e σ+-= Using risk-neutral valuation, the value of the derivative security at time t is()2ˆ[()]r T t Te E S --22(2)()()r T t r T t S e e σ+---=22()()r T t S e σ+-=(b) If: 22222()()()()22()()2()()2()22r T t r T t r T t r T t f S e f S r e tf Se Sf e S σσσσσ+-+-+-+-=∂=-+∂∂=∂∂=∂ The left-hand side of the Black-Scholes –Merton differential equation is:222222()()2()()22()()()()2()2r T t r T t r T t r T t S r e rS e S e rS e rfσσσσσσ+-+-+-+--+++==Hence the Black-Scholes equation is satisfied.Problem 15.30.Consider an option on a non-dividend-paying stock when the stock price is $30, the exercise price is $29, the risk-free interest rate is 5% per annum, the volatility is 25% per annum, and the time to maturity is four months.a. What is the price of the option if it is a European call?b. What is the price of the option if it is an American call?c. What is the price of the option if it is a European put?d. Verify that put –call parity holds.In this case 030S =, 29K =, 005r =., 025=.σ and 412T =/2104225d ==.2202782d ==.(04225)06637(02782)06096N N .=.,.=.(04225)03363(02782)03904N N -.=.,-.=.a. The European call price is00541230066372906096252e -.⨯/⨯.-⨯.=.or $2.52.b. The American call price is the same as the European call price. It is $2.52.c. The European put price is00541229039043003363105e -.⨯/⨯.-⨯.=.or $1.05.d. Put-call parity states that:rT p S c Ke -+=+In this case 252c =., 030S =, 29K =, 105p =. and 09835rT e -=. and it is easy to verify that the relationship is satisfied,Problem 15.31.Assume that the stock in Problem 15.30 is due to go ex-dividend in 1.5 months. The expected dividend is 50 cents.a. What is the price of the option if it is a European call?b. What is the price of the option if it is a European put?c. If the option is an American call, are there any circumstances when it will beexercised early?a. The present value of the dividend must be subtracted from the stock price. This givesa new stock price of:01250053005295031e -.⨯.-.=.and 2103068d ==. 2201625d ==.12()06205()05645N d N d =.;=. The price of the option is therefore005412295031062052905645221e -.⨯/.⨯.-⨯.=.or $2.21.b. Because12()03795()04355N d N d -=.,-=. the value of the option when it is a European put is005412290435529503103795122e -.⨯/⨯.-.⨯.=.。

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Chapter 15 Managers and Communication1) Formal communication can control behavior, but informal communication cannot. Answer: FALSE2) A sender initiates a message by encoding a thought.Answer: TRUE3) E-mail increases filtering because electronic communication is faster.Answer: FALSE4) Communication that takes place among employees on the same organizational level is called lateral communication.Answer: TRUE5) All electronic information is inadmissible in court.Answer: FALSE6) In which of the following cases has communication occurred?A) Gary updates his blog regularly, even though no one reads it.B) Brian attends all the Algebra lectures, but is unable to understand the subject.C) Jen has sent an urgent e-mail to her Japanese colleague, but a translator is not yet available.D) Ana tells her manager that she needs a new computer, but he says that the company can't afford it.Answer: D7) George prepares a memorandum explaining the objectives of a newly created work team that he is expected to manage, and makes sure it reaches each team member. He is involved in ________.A) deciphering the messageB) organizational communicationC) lateral communicationD) decoding the messageAnswer: B8) Complexity capacity refers to the degree to which the communication method________.A) offers a reasonable assurance of confidentialityB) makes a simple message seem more complexC) effectively processes complicated messagesD) offers quick and accurate feedbackAnswer: C9) Which of the following methods of communication offers high scanability?A) publicationsB) face-to-face communicationC) meetingsD) voice mailAnswer: A10) Which of the following is a way for managers to overcome the barriers to communication?A) feedbackB) decodingC) encodingD) filteringAnswer: A11) ________ communication is communication that flows from a manager to employees.A) LateralB) UpwardC) DownwardD) HorizontalAnswer: C12) In the ________ communication network, communication flows according to the formal organizational hierarchy, both downward and upward.A) chainB) all-channelC) wheelD) horizontalAnswer: A"Flo" of Communication (Scenario)Recently the employees of Chatterbox Enterprises, Inc., received a letter from the vice president of operations explaining that a new production facility would be built in Chatland City, AL. It was also stated that about one-fourth of the employees from the current Chatland City facility would be transferred to the new facility and if employees wanted to volunteer for the transfer, they could do so by meeting the human resource manager and filling out a request form. Sam, a production supervisor, first went to Florence, the purchasing manager, who had already volunteered to transfer, to discuss with her the possibility of becoming her inventory control supervisor at the new facility. Florence told Sam that Ruth, the current inventory control supervisor, would not be transferring and that she would consider his request.13) The letter from the vice president to the employees is an example of which type of organizational communication?A) horizontalB) formalC) lateralD) informalAnswer: B14) When Sam went to the human resource manager and applied for transfer to the new facility, he was participating in which type of organizational communication?A) formalB) downwardC) horizontalD) lateralAnswer: A15) If Sam had talked with his co-supervisors before going to speak to Florence, he would have been involved in which type of organizational communication?A) verticalB) internalC) lateralD) downwardAnswer: C16) When Sam spoke to Florence, he was involved in which type of organizational communication?A) diagonalB) upwardC) horizontalD) lateralAnswer: A17) "The grapevine is detrimental to effective organizational communication and must be eliminated if the organization is to effectively engage its employees." Do you agree with this statement? Explain your answer.Answer: Student answers may vary. However, it is a fact that the grapevine, an informal organizational network is part of every organization. In fact, it is an important source of information for the company. This makes it imperative for companies to try to understand its dynamics. Acting as both a filter and a feedback mechanism, it pinpoints those bewildering issues that employees consider important. More importantly, from a managerial point of view, it is possible to analyze what is happening on the grapevine—what information is being passed, how information seems to flow, and what individuals seem to be key information conduits. By staying aware of the grapevine's flow and patterns, managers can identify issues that concern employees, and, in turn, use the grapevine to disseminate important information. Because the grapevine can't be eliminated, managers should "manage" it as an important information network. However, managers can minimize the negative consequences of rumors. They can do so by communicating openly, fully, and honestly with employees, particularly in situations where employees may not like proposed or actual managerial decisions. Studies show that this is likely to be effective in engaging employees.18) In a short essay, list the seven elements of the communication process and explainthe process of interpersonal communication.Answer: The seven elements of the communication process are: (1) the communication source, (2) the message, (3) encoding, (4) the channel, (5) decoding, (6) the receiver, and (7) feedback. Before communication can take place, a purpose, expressed as a message to be conveyed, must exist. It passes between a source (the sender) and a receiver. The message is converted to a symbolic form (called encoding) and passed by way of some medium (channel) to the receiver, who retranslates the sender's message (called decoding). The result is the transfer of meaning from one person to another. In addition, note that the entire process is susceptible tonoise disturbances that interfere with the transmission, receipt, or feedback of a message. Typical examples of noise include illegible print, phone static, inattention by the receiver, or background sounds of machinery or coworkers. Anything that interferes with understanding can be noise, and noise can create distortion at any point in the communication process.19) In a short essay, list and discuss four of the six barriers to effective communication that managers face. Include a specific example of each barrier to support your answer.Answer: a. Filtering the deliberate manipulation of information to make it appear more favorable to the receiver. For example, when a person tells his or her manager what the manager wants to hear, that individual is filtering information. The extent of filtering tends to be a function of the number of vertical levels in the organization and the organizational culture. The more vertical levels there are in an organization, the more opportunities there are for filtering.b. Emotions how a receiver feels when a message is received influences how he or she interprets it. Extreme emotions are most likely to hinder effective communication. In such instances, people often disregard rational and objective thinking processes and substitute emotional judgments.c. Information overload occurs when the amount of information a person is required to work with exceeds that individual's processing capacity. What happens when individuals have more information than they can sort or use? They tend to select out, ignore, pass over, or forget information. Or, they may put off further processing until the overload situation is over.d. Defensiveness when people feel that they're being threatened, they tend to react in ways that reduce their ability to achieve mutual understanding. That is, they become defensive–engaging in behaviors such as verbally attacking others, making sarcastic remarks, being overly judgmental, and questioning others' motives.e. Language words mean different things to different people. Age, education, and cultural background are three of the more obvious variables that influence the language a person uses and the definitions he or she gives to words. People may speak the same language, but use of that language is far from uniform. Senders tend to assume that the words and phrases they use mean the same to the receiver as they do to them. This is incorrect and creates communication barriers.f. National culture interpersonal communication isn't conducted in the same wayaround the world. In the United States, communication patterns tend to be individual oriented and clearly spelled out. U.S. managers rely heavily on memoranda, announcements, position papers, and other formal forms of communication to state their positions on issues. In collectivist countries, such as Japan, there's more interaction for its own sake and a more informal manner of interpersonal contact.。

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