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The inside diameter of a cylinder has specifications 1 +/- .03 cm. The machining process output follows a normal distribution with mean 1 cm and standard deviation .1 cm. Determine the percentage of
In deciding how many customer service representatives to hire and in planning their schedules, a firm that markets laser jet printers studies repair times for the machines. One such study revealed t
Under average driving conditions, the life lengths of automobile tires of a certain brand are found to follow an exponential distribution, with a mean of 30,000 miles. Find the probability that one
What are the parameter and the statistic in this situation? What does the sampling distribution of the statistic describe? What does it mean to say that the statistic in this case is a unbiased estima
The real risk-free rate is r* = 2.75%, the inflation premium for 5-year bonds is IP = 1.65%, the default risk premium for Niendorf's bonds is DRP = 1.20% versus zero for T-bonds, and the maturity ri
5-year Treasury bonds yield 5.5%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5-year bonds is 0.4%. What is the real risk-free rate, r*?
If 10-year T-bonds have a yield of 6.2%, 10-year corporate bonds yield 8.5%, the maturity risk premium on all 10-year bonds is 1.3%, and corporate bonds have a 0.4% liquidity premium versus a zero l
Assume that you are considering the purchase of a 15-year bond with an annual coupon rate of 9.5%. The bond has face value of $1,000 and makes semiannual interest payments. If you require an 11.0% n
Sadik Inc.'s bonds currently sell for $1,280 and have a par value of $1,000. They pay a $135 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,050. What is their yie
Which of the following events would make it more likely that a company would choose to call its outstanding callable bonds? Pick the correct answer and explain why for points.
Suppose you are buying your first condo for $145,000, and you will make a $15,000 down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at a 6.
Master Card and other credit card issuers must by law print the Annual Percentage Rate (APR) on their monthly statements. If the APR is stated to be 18.00%, with interest paid monthly, what is the c
You just inherited some money, and a broker offers to sell you an annuity that pays $5,000 at the end of each year for 20 years. You could earn 5% on your money in other investments with equal risk
You want to buy a new sports car 3 years from now, and you plan to save $4,200 per year, beginning one year from today. You will deposit your savings in an account that pays 5.2% interest. How much
You plan to invest in securities that pay 8.0%, compounded annually. If you invest $5,000 today, how many years will it take for your investment to grow to $9,140.20?
Suppose the U.S. Treasury offers to sell you a bond for $747.25. No payments will be made until the bond matures 5 years from now, at which time it will be redeemed for $1,000. What interest rate wo
You plan to invest some money in a bank account. Which of the following banks provides you with the highest effective rate of interest? Pick the correct answer.
Which of the following investments would have the highest future value at the end of 10 years? Assume that the effective annual rate for all investments is the same and is greater than zero. Pick t
You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows. Which of the following would lower the calculated value of the invest
A recent study issued from the British Health Journal informs us that 1% of women age 40 have breast cancer . A mammography test has an 80% success rate and a 10% false alarm rate. If a woman receiv
Suppose you are given data from a survey showing the IQ of each person interviewed and the IQ of his or her mother. That is all the information you have. Your boss has asked you to put together a re
What are the steps in the construction process?
X has a normal distribution with a mean of 80.0 and a standard deviation of 3.5. Find the following probabilities: (A) P(x < 75.0) (B) P(75.0 < x < 85.0) (C) P(x > 89.0). Show all work.
Suppose that 200 bricks are fired each day of every five day work week at GR's Kustom Kiln. Each speciality brick fired at thisestablishment has a 94% chance of passing the inspection procedure requ