1. On a dollar bar series on E-mini S&P 500 futures,

(a) Compute SMT for SM-Poly1 and SM-Poly 2, where 𝜑 = 1. What is their correlation?

(b) Compute SMT for SM-Exp, where 𝜑 = 1 and 𝜑 = 0.5. What is their correlation?

(c) Compute SMT for SM-Power, where 𝜑 = 1 and 𝜑 = 0.5. What is their correlation?

2. If you compute the reciprocal of each price, the series  turns bubbles into bursts and bursts into bubbles.

(a) Is this transformation needed, to identify bursts?

(b) What methods in this chapter can identify bursts without requiring this transformation?

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1. On January 2, 2017, DavidCorporation paid $1,200,000 for Buster Company in a transactionproperly accounting for as an asset acquisition. The book valuesand fair values of Buster Company’s net assets on January 2, 2017were as follows:

BookValue               Fair Value

AccountReceivable                        400,000                  350,000

Inventory                                             50,000                    65,000

Plant andEquipment                       250,000                  450,000

AccountsPayable                             40,000                        50,000

MortgagePayable                              150,000                  150,000

                                                              510,000                   665,000

A. What will be the goodwill recorded from the abovetransaction? Show your calculation.

B. If David Corporation’s Accounts Receivable balanceimmediately prior to the acquisition was $500,000. What will DavidCorporation’s Accounts Receivable balance be immediately after theabove acquisition? Show your calculation.

2. To determine whether goodwill impairment exists, U.S. GAAPrequires a two-step process (complete the statements):

Step 1 – Compares F.V. (fair value) ofthe Reporting Unit to _____________________________.

Step 2 – If necessary, first comparesthe F.V. of the Reporting Unit to _____________________.

3. If goodwill impairment is determined to exist, the entry torecord the impairment is as follows:

                                                                                                           Debit     Credit

Goodwill                                                                                      $xxx

                 Impairment Loss -Goodwill                                           $xxx

A. True

B. False

Explain your answer:

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1. On November 2, 2017, Scannell, LTD., issued a $200 million, five-year maturity CDs(liability) denominated in Dollars at an interest rate of 2.25 percent. The CDs pay interest annually and the principal value of $200 million at maturity. Also on November 2, 2017, Scannell invested $150 million in a Rouble (?)-denominated ten-year maturity loan with an annual interest rate of 11 percentand $50 million was invested in a ten-year maturity U.S. Treasury note with an interest rate of 2.34 percent. The Rouble denominated loan pays interest annually with the principal paid at maturity (remember this loan contract is denominated in Rouble (?)). The ten-year U.S. Treasury note pays interest semiannually. The exchange rate on November 2, 2017 was ?59.0141/$. The exchange rate on November 2, 2018 was ?66.0468/$. Market interest rates in the U.S. for four-year maturity CDs on November 2, 2018 are 2.50 percent, the current market yield to maturity for an 9-year maturity U.S Treasuries is 3.20 percent, and the interest rate on an 9-year maturity Russian loan increased from 11 percent on the loan when originated on November 2, 2017 to a market rate of 13 percent on November 2, 2018. Thus, values of both assets and liabilities decline since interest rates increased in both Russia and the U.S. Note that the values of each of the balance sheet assets and liabilities change because of changes in market interest rates, changing time to maturities and changes in exchange rates.Fill in the table below for the balance sheets in Dollars and Rouble (?). Since Scannell, LTD was exposed to both interest rate risk and exchange rate risk, what were the gains or losses resulting from interest rate changes, maturity changes and the gains or losses due to exchange rate changes?

Exchange rates may be found at:https://www.xe.com/currencycharts/?from=USD&to=RUB&view=1M

U.S Treasury rates may be found at:

http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/Historic-Yield-Data-Visualization.aspx

Solution matrix for problem (Market Values)

November 2, 2017 Date: ?59.0141/$

Balance Sheet Dollar Values (in millions) Balance Sheet Rouble Values (in millions)

Rouble Dollar Rouble Dollar

Loan $150 CD $200 Loan ?_______CD ?__________

U.S T-bill $50 U.S.T-bill ?________

$200 $200 ?________ ?__________

November 2, 2018 Date: ?66.0268/$

Balance Sheet Dollar Values (in millions) Balance Sheet Rouble Values (in millions)

Rouble Dollar Rouble Dollar

Loan $_______ CD $_______ Loan ?________ CD?________

US Trea$______ USTrea?________

Total $______ $_______ ?________ ?13,081.17

Gain or loss in $________ Gain or lossin ?__________

Russian Loan Price in Roubles on 11/2/18 with 9 years to maturity, yielding 13%

VB= 4,996.85 + 2,946.73 =?7,943.58

or ?7,943.58/?66.0268/$ = $___________

Scannell LTD CD in $ on 11/2/18 with 4 years to maturity, yield 2.50%

Vcd= = $____________

or $_____________*?66.0268/$ = ?____________

U.S Treasury Bond in $ on 11/2/18 with 9 years to maturity, yielding 3.2%

VTB = = $__________________

or $__________*?66.0268/$ =?_____________

 

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1. Outline two possible ways to use parallelism in Quicksort.

2. Prove that the “split-interleave” method preserves the property that the columns are sorted.

3. Write a conventional C program to merge files using Batcher's  method.

4. Write a conventional C program to merge files using Batcher's  method, but without actually doing any shuffles.

 

 

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1. Paint Company uses 60000 gallons of pigment per year. The cost of ordering pigment is br.200 per order, and the cost of carrying the pigment in inventory is br.1 per gallon per year. The firm uses pigment at a constant rate every day throughout the year

a. Calculate the EOQ?

b. Calculate the total cost of plan suggested by the EOQ?

c. Determine the total number of orders suggested by this plan?

d. Assuming that it takes 20days to receive an order once it has been placed, determine the order point in terms of gallons of pigment.(Assume the 360-day year)

 

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