FIN 380 Exam 2 Supplemental Homework Problems

The area under the curve to the left of the unknown quantity must be 0.7 (70%). So, we must first find the z value that cuts off an area of 0.7 in the left tail of standard normal distribution. Using the cumulative probability table, we see that z=0.53.

4. Jake needs to score in the top 10% in order to earn a physical fitness certificate. The class mean is 78 and the standard deviation is 5.5. What raw score does he need?

9. You want to purchase a business with the following cash flows. How much would you pay for this business today assuming you needed a 14% return to make this deal?

Pg 212 #14) A normal population has a mean of 12.2 and a standard deviation of 2.5.

-Martin Industries just paid an annual dividend of $1.30 a share. The market price of the stock is $36.80 and the growth rate is 6.0 percent. What is the firm's cost of equity?

Capital Gains Yield: I was able to find the stock prices by multiplying the P/E ratio times EPS, both of which are found in exhibit 6. g = 1.90%

8. Assuming that the distribution is a normal curve, 95% of men were between what ages? Round your answer to two decimal places.

The Standard Deviation is much smaller at 6.2% compared to Stock A. “Standard deviation is calculated based on the mean.” (WHAT IS STANDARD DEVIATION, n.d.) The space of each data point from the mean is squared, summed and averaged to find the variance. The difference is a result of taking the mean of the data points, subtracting the mean from each data point individually, squaring each of these results and then taking another mean of these squares. Ordinarily, the smaller a stock’s standard deviation, the less volatile or risky it is. The higher the standard differential, the more scattered the profits are, consequently is more dangerous. The additional 1% of the profit produced by Stock A is not worth the risk associated with Stock

A normally distributed variable has a mean of 10 and a standard deviation of 2. The probability that a value between 7 and 9 is obtained is

A normal distribution of data means that most of the examples in a set of data are close to the "average," while relatively few examples tend to one extreme or the other.

A brand of television has a lifetime that is normally distributed with a mean of 7 years and a standard deviation of 2.5 years. What is the probability that a randomly

2. using the data from 1b and 1c construct a Characteristic Line and determine Beta for the company. Is this Equity or Asset Beta?

At a computer manufacturing company, the actual size of computer chips is normally distributed with a mean of 1 centimeter and a standard deviation of 0.1 centimeter. A random sample of 12 computer chips is taken. Above what value do 2.5% of the sample means fall? ANSWER: 1.057

As a result of the higher turnover and improved margins in 2006, net profit attributable to equity holders of the company improved by 14.9% from $6.7 million to $7.7 million.

11. What is the variance of the returns on a portfolio that is invested 60 percent in stock S and 40 percent in stock T?