1. Suppose that Baldwin will increase its automation to 6.5 this year. Each new unit of automation costs $4 per unit of capacity. An additional $4 per point of automation applies to any new capacity. How much will this investment in automation cost?
2. Do-Well bonds have a face value of $1000 and are currently quoted at 86.725. The bonds have a 7 percent coupon rate. What is the current yield on these bonds? Using financial calculator please.
3. Contrast the U.S. Dow Jones Industrial Average and the Standard & Poor's Composite Index on the issue of representativeness.
4. Given the following exchange rates 10pts Yen 125/$ DM 2/$ DM .015/Yen Is arbitrage possible? Start your answer with either “yes’ (it is possible) or “no” (it is not possible) and then show why your answer is correct. If arbitrage is possible, show how it could be done?