The press release “Men need to Man Up, according to ball Park brand Survey” (PR Newswire, October 14, 2015) describes the results of a study in which 1012 U.S. men were asked a number of questions about “life’s tough conversations.” One result from this survey was summarized in a USA TODAY Snapshot (USA TODAY, November 6, 2015) that said that “nearly 1 in 5 men would pay someone to handle their breakup for them.”
> In Problem 12, assume the term structure of interest rates becomes inverted, with short-term rates going to 11 percent and long-term rates 5 percentage points lower than short-term rates. If all other factors in the problem remain unchanged, what will e
> Barton Simpson, the chief financial officer of Broadband Inc. could hardly believe the change in interest rates that had taken place over the last few months. The interest rate on A2 rated bonds was now 6 percent. The $30 million, 15-year bond issue that
> Colter Steel has $4,200,000 in assets. Short-term rates are 8 percent. Long-term rates are 13 percent. Earnings before interest and taxes are $996,000. The tax rate is 40 percent. If long-term financing is perfectly matched (synchronized) with long-ter
> Assume that Atlas Sporting Goods Inc. has $840,000 in assets. If it goes with a low-liquidity plan for the assets, it can earn a return of 15 percent, but with a high-liquidity plan the return will be 12 percent. If the firm goes with a short-term financ
> Assume that Hogan Surgical Instruments Co. has $2,500,000 in assets. If it goes with a low-liquidity plan for the assets, it can earn a return of 18 percent, but with a high-liquidity plan, the return will be 14 percent. If the firm goes with a short-ter
> What is the difference between book value per share of common stock and market value per share? Why does this disparity occur?
> Discuss some financial variables that affect the price-earnings ratio.
> It has often been said that if the company can’t earn a rate of return greater than the cost of capital, it should not make investments. Explain.
> Explain the traditional, U-shaped approach to the cost of capital.
> Why is the remaining time to maturity an important factor in evaluating the impact of a change in yield to maturity on bond prices?
> What approaches can be taken in valuing a firm’s stock when there is no cash dividend payment?
> What factors might influence a firm’s price-earnings ratio?
> The Bailey Corporation, a manufacturer of medical supplies and equipment, is planning to sell its shares to the general public for the first time. The firm’s investment banker, Robert Merrill and Company, is working with Bailey Corporat
> List five different financial applications of the time value of money.
> Why might disinflation prove to be favorable to financial assets?
> Inflation can have significant effects on income statements and balance sheets, and therefore on the calculation of ratios. Discuss the possible impact of inflation on the following ratios, and explain the direction of the impact based on your assumption
> Comparisons of income can be very difficult for two companies even though they sell the same products in equal volume. Why?
> What is free cash flow? Why is it important to leveraged buyouts?
> Name the departments, offices, or agencies that were created by the Dodd–Frank legislation.
> How did the Sarbanes–Oxley Act impact corporations’ financial reports?
> What changes can take place under restructuring? In recent times, what group of investors has often forced restructuring to take place?
> Explain why the statement of cash flows provides useful information that goes beyond income statement and balance sheet data.
> What is the difference between a primary and a secondary market?
> Five years ago, Kennedy Trucking Company was considering the purchase of 60 new diesel trucks that were 15 percent more fuel-efficient than the ones the firm is now using. Mr. Hoffman, the president, had found that the company uses an average of 10 milli
> Surgical Supplies Corporation paid a dividend of $1.12 per share over the last 12 months. The dividend is expected to grow at a rate of 25 percent over the next three years (supernormal growth). It will then grow at a normal, constant rate of 7 percent f
> Children going back to school can be expensive for parents—second only to the Christmas holiday season in terms of spending. Forbes.com (august 12, 2015) estimated that in 2015, parents had an average of $1269 in back-to-school expenses. However, not eve
> Consider a chance experiment that consists of selecting a customer at random from all people who purchased a car at a large car dealership during 2016. a. In the context of this chance experiment, give an example of two events that would be mutually exc
> The national center for health Statistics (www.cdc .gov/nchs/data/nvsr/nvsr64/nvsr64_12.pdf, retrieved April 25, 2017) gave the following information on births in the United States in 2014: Use this information to estimate the probability that a random
> The same issue of The Chronicle for Higher Education Almanac referenced in the previous exercise also reported the following information for Ph.D. degrees awarded by U.S. colleges in the 2013–2014 academic year: A total of 54,070 Ph.D. degrees were aw
> According to The Chronicle for Higher Education Almanac (2016), there were 1,003,329 Associate degrees awarded by U.S. community colleges in the 2013–2014 academic year. A total of 613,034 of these degrees were awarded to women. a. I f a person who rece
> Suppose you want to estimate the probability that a randomly selected customer at a particular grocery store will pay by credit card. Over the past 3 months, 80,500 purchases were made, and 37,100 of them were paid for by credit card. What is the estimat
> Roulette is a game of chance that involves spinning a wheel that is divided into 38 segments of equal size, as shown in the accompanying picture. A metal ball is tossed into the wheel as it is spinning, and the ball eventually lands in one of the 38 se
> A college job placement center has requests from five students for employment interviews. Three of these students are math majors, and the other two students are statistics majors. Unfortunately, the interviewer has time to talk to only two of the studen
> Suppose you want to estimate the probability that a patient will develop an infection while hospitalized at a particular hospital. In the past year, this hospital had 6450 patients, and 712 of them developed an infection. What is the estimated probabilit
> A professor assigns five problems to be completed as homework. At the next class meeting, two of the five problems will be selected at random and collected for grading. You have only completed the first three problems. a. What is the sample space for th
> Phoenix is a hub for a large airline. Suppose that on a particular day, 8000 passengers arrived in Phoenix on this airline. Phoenix was the final destination for 1800 of these passengers. The others were all connecting to flights to other cities. On this
> Give a relative frequency interpretation for each probability calculated in the previous exercise. Data from exercise 5.9: At a particular college, students have several options for purchasing textbooks. The options and the proportion of students choosi
> Data on manufacturing defects per 100 cars for the 30 brands of cars sold in the United States (USA TODAY, March 29, 2016) are: 97 134 198 142 95 135 132 145 136 129 152 158 169 155 106 125 120 153 208 163 204 173 165 126 113 167 171 166 181 161
> At a particular college, students have several options for purchasing textbooks. The options and the proportion of students choosing each option are shown in the accompanying table. If a student at this college is selected at random, what is the probab
> The probability of getting a king when a card is selected at random from a standard deck of 52 playing cards is 1 13. a. Give a relative frequency interpretation of this probability. b. Express the probability as a decimal rounded to three decimal
> If you were to roll a fair die 1000 times, about how many sixes do you think you would observe? What is the probability of observing a six when a fair die is rolled?
> A bookstore sells books in several formats—hardcover, paperback, digital, and audio. Based on past sales, the table below gives the estimated probabilities that a randomly selected purchase will be of particular types. If a purchase i
> In a particular state, automobiles that are more than 10 years old must pass a vehicle inspection in order to be registered. This state reports the probability that a car more than 10 years old will fail the vehicle inspection is 0.09. Give a relative fr
> What does it mean to say that the probability that a coin toss will land head side up is 0.5?
> For a monthly subscription fee, a video download site allows people to download and watch up to five movies per month. Based on past download histories, the following table gives the estimated probabilities that a randomly selected subscriber will downlo
> An airline reports that for a particular flight operating daily between Phoenix and Atlanta, the probability of an on-time arrival is 0.86. Give a relative frequency interpretation of this probability.
> The article “Scrambled Statistics: what Are the chances of Finding Multi-yolk eggs?” (Significance [August 2016]: 11) gives the probability of a double-yolk egg as 0.001. a. Give a relative frequency interpretation of this probability. b. If 5000 eggs
> An article in USA TODAY (October 19, 2010) describes a study of how young children learn. Sixty-four 18-monthold toddlers participated in the study. The toddlers were allowed to play in a lab equipped with toys, which also had a robot hidden behind a scr
> Data on tipping percent for 20 restaurant tables, consistent with summary statistics given in the paper “beauty and the labor Market: evidence from restaurant Servers” (unpublished manuscript by Matt Parrett, 2007), ar
> The following conclusion from a statistical study appeared in the article “Smartphone nation” (AARP Bulletin, September 2009): “If you love your smartphone, you’re far from alone. Half of all boomers sleep with their cell phone within arm’s length. Two o
> The report “education Pays: how college Shapes lives” (trends.collegeboard.org/sites/default/files/education -pays-how-college-shapes-lives-report-022714.pdf, retrieved april 20, 2017) gave the following percentiles for annual earnings in 2011 for full-t
> The accompanying table gives the mean and standard deviation of reaction times (in seconds) for each of two different stimuli: Suppose your reaction time is 4.2 seconds for the first stimulus and 1.8 seconds for the second stimulus. Compared to other pe
> Fiber content (in grams per serving) and sugar content (in grams per serving) for 18 high-fiber cereals (www .consumerreports.com) are shown. Fiber Content Sugar Content a. Find the median, quartiles, and interquartile range for the fiber content data
> The report “Most licensed Drivers age 851: States” (www. bloomberg.com/graphics/best-and-worst/#most-licenseddrivers-age-85-plus-states, retrieved april 20, 2017) gives the percentage of drivers in each state and the D
> The accompanying data are a subset of data read from a graph in the paper “ladies First? a Field Study of Discrimination in coffee Shops” (Applied Economics, april 2008). The data are wait times (in seconds) between o
> The insurance institute for highway Safety (www.iihs.org, June 11, 2009) published data on repair costs for cars involved in different types of accidents. In one study, seven different 2009 models of mini- and micro-cars were driven at 6 miles per hour s
> Data on tipping percent for 20 restaurant tables, consistent with summary statistics given in the paper “beauty and the labor Market: evidence from restaurant Servers” (unpublished manuscript by Matt Parrett, 2007), ar
> The paper “caffeinated energy Drinks—a growing Problem” (Drug and Alcohol Dependence [2009]: 1–10) reported caffeine per ounce for 8 top-selling energy drinks and for 11 highcaffeine
> The accompanying data are consistent with summary statistics from the paper “Shape of glass and amount of alcohol Poured: comparative Study of effect of Practice and concentration” (British Medical Journal [2005]: 1512
> Data on a customer satisfaction rating (called the APEAL rating) are given for each brand of car sold in the United States (USA TODAY, March 29, 2016). The APEAL rating is a score between 0 and 1,000, with higher values indicating greater satisfaction. C
> For each of the following data sets, construct a graphical display of the data distribution and then indicate what summary measures you would use to describe center and variability. a. The following are data on weekend exercise time for 20 females consi
> Suppose that the distribution of scores on an exam is mound shaped and approximately symmetric. The exam scores have a mean of 100 and the 16th percentile is 80. a. What is the 84th percentile? b. What is the approximate value of the standard deviation
> The mean reading speed of students completing a speed-reading course is 450 words per minute (wpm). If the standard deviation is 70 wpm, find the z-score associated with each of the following reading speeds. a. 320 wpm b. 475 wpm c. 420 wpm d.
> Suppose that the distribution of weekly water usage for single-family homes in a particular city is mound shaped and approximately symmetric. The mean is 1400 gallons, and the standard deviation is 300 gallons. a. What is the approximate value of the 16
> The mean number of text messages sent per month by customers of a cell phone service provider is 1650, and the standard deviation is 750. Find the z-score associated with each of the following numbers of text messages sent. a. 0 b. 10,000 c. 4500 d. 3
> The following data values are the 2014 per capita operating expenditures on public libraries for each of the 50 U.S. states and Washington, D.C. (from www.imls.gov /research-evaluation/data-collection/public-libraries-survey /explore-pls-data, retrieved
> Suppose that your younger sister is applying to college and has taken the SAT exam. She scored at the 83rd percentile on the verbal section of the test and at the 94th percentile on the math section. Because you have been studying statistics, she asks yo
> In a study investigating the effect of car speed on accident severity, the vehicle speed at impact was recorded for 5000 fatal accidents. For these accidents, the mean speed was 42 mph and the standard deviation was 15 mph. A histogram revealed that the
> Suppose that your statistics professor returned your first midterm exam with only a z-score written on it. She also told you that a histogram of the scores was mound shaped and approximately symmetric. How would you interpret each of the following z-scor
> Explain why the following graphical display (similar to a graph that appeared in USA TODAY, September 17, 2009) is misleading. U.S. currency tainted by cocaine Among 234 U.S. bills from 17 large U.S. cities, percentage with cocaine traces: 90% FEDERA
> The paper “Study of the Flying ability of Rhynchophorus ferrugineus adults using a computer-Monitored Mill” (Bulletin of Entomological Research [2014]: 462–467) summarized data from a study of red pal
> The report “who borrows Most? bachelor’s Degree recipients with high levels of Student Debt” (trends .collegeboard.org/content/who-borrows-most-bachelors -degree-recipients-high-levels-student-debt-april-2010, retrieved april 20, 2017) included the follo
> The mean playing time for a large collection of compact discs is 35 minutes, and the standard deviation is 5 minutes. a. What value is 1 standard deviation above the mean? One standard deviation below the mean? What values are 2 standard deviations away
> A student took two national aptitude tests. The mean and standard deviation were 475 and 100, respectively, for the first test, and 30 and 8, respectively, for the second test. The student scored 625 on the first test and 45 on the second test. Use z-sco
> Refer to the data given in the previous exercise. a. Are there any outliers in the inflation-adjusted gross movie income data? If so, which data values are outliers? b. Construct a boxplot for the inflation-adjusted gross movie income data. c. For the
> The Bloomberg web site included the data in the accompanying table on the number of movies made by 25 Saturday Night Live cast members as of 2014 (www.bloomberg.com/graphics/best-and-worst/#top-grossing-saturday -night-live-alumni, retrieved april 20, 20
> The U.S. Department of Health and Human Services reported the estimated percentage of households with only wireless phone service (no landline) in 2014 for the 50 states and the District of Columbia (DC) (cdc.gov/nchs/data /nhis/earlyrelease/wireless_sta
> A graph similar to the one below appeared in the paper “Does the weight of the Dish influence our Perception of Food?” (Food Quality and Preference, [2011]: 753–756). The graph was constructed using d
> Like many people, dogs can also suffer from back problems. Animal researchers were interested in learning whether laser therapy after back surgery would shorten recovery time for dogs that needed back surgery (“lowlevel laser therapy re
> The article “the best—and worst—Places to be a working woman” (The Economist, graphic Detail for March 3, 2016) reported values of what it calls the glass-ceiling index, which is des
> The following two graphical displays are similar to ones that appeared in USA TODAY (June 1, 2009 and July 28, 2009). One is an appropriate representation and the other is not. For each of the two, explain why it is or is not drawn appropriately.
> The accompanying data are the percentage of babies born prematurely in 2014 for the 50 U.S. states and the District of Columbia (DC) (the henry J. Kaiser Family Foundation, kff.org/other/state-indicator/preterm-births-by -raceethnicity/, retrieved april
> The accompanying data are a subset of data read from a graph in the paper “ladies First? a Field Study of Discrimination in coffee Shops” (Applied Economics [april, 2008]). The data are the waiting time (in seconds) be
> The accompanying data are median ages for residents of each of the 50 U.S. states and the District of Columbia (DC) in 2014 (the Statistics Portal, retrieved May 18, 2016 from www.statista.com/statistics/208048/median -age-of-population-in-the-usa-by-sta
> The accompanying data are consistent with summary statistics that appeared in the paper “Shape of glass and amount of alcohol Poured: comparative Study of effect of Practice and concentration” (British Medical Journal
> The National Climate Data Center gave the accompanying annual rainfall (in inches) for Medford, Oregon, from 1950 to 2014 (www.ncdc.noaa.gov/cdoweb/datasets#annual, retrieved april 20, 2017): a. Calculate the quartiles and the interquartile range. b. Ar
> Data on the gasoline tax per gallon (in cents) in 2015 for the 50 U.S. states and the District of Columbia (DC) are shown below (www.eia.gov/tools/faqs/faq.cfm?id=10&t=10, retrieved September 1, 2016). a. The smallest value in the data set is 9.0 (A
> The data below are manufacturing defects per 100 cars for the 30 brands of cars sold in the United States (USA TODAY, March 29, 2016). Many of these values are larger than 100 because one car might have many defects. Use these data to construct a boxplo
> The u.S. environmental Protection agency reported the following sulphur dioxide emissions (in tons) for the 48 states in the continental United States (www3.epa .gov/airmarkets/progress/reports/emissions_reductions_so2 .html#figure2, retrieved april 20,
> A sample of 26 offshore oil workers took part in a simulated escape exercise, resulting in the following data on time (in seconds) to complete the escape (“oxygen consumption and ventilation During escape from an offshore Platform,&acir
> The following gasoline tax per gallon data for each of the 50 U.S. states and the District of Columbia (DC) in 2015 were obtained from the U.S. Energy Information Administration (www.eia.gov/tools/faqs/faq.cfm?id=10&t=10, retrieved April 17, 2017).
> The article “Fliers Trapped on Tarmac Push for Rules on Release” (USA TODAY, July 28, 2009) gave the following data for 17 airlines on the number of flights that were delayed on the tarmac for at least 3 hours for the
> An article about college loans (“New Rules Would Protect Students,” USA TODAY, June 16, 2010) reported the percentage of students who had defaulted on a student loan within 3 years of when they were scheduled to begin
> The article “Where College Students Buy Textbooks” (USA TODAY, October 14, 2010) gave data on where students purchased books. The accompanying frequency table summarizes data from a sample of 1152 full-time college stu
> To compare the amount of money men and women spent on their most recent haircut, each person in a sample of 20 women and each person in a sample of 20 men was asked how much was spent on his or her most recent haircut. Required: 1. How many variables a
> To learn about where students purchase textbooks, each student in a random sample of 200 students at a particular college was asked to select one of the following responses: campus bookstore, off-campus bookstore, purchased all books online, or used a co
> The state of California defines family income groups in terms of median county income as follows: Extremely low income: below 30% of county median income Very low income: between 30% and 50% of county median income Low income: between 50% and 80% of co
> The accompanying graphical display is from the Fall 2008 Census Enrollment Report at Cal Poly, San Luis Obispo. It uses both a pie chart and a segmented bar graph to summarize ethnicity data for students enrolled in Fall 2008. a. Use the information in
> To see if satisfaction level differs for airline passengers based on where they sit on the airplane, all passengers on a particular flight were surveyed at the end of the flight. Passengers were grouped based on whether they sat in an aisle seat, a middl
> To learn about how number of hours worked per week and number of hours spent watching television in a typical week are related, each person in a sample of size 40 was asked to keep a log of hours worked and hours spent watching television for one week. A
