Archives: Solution Manual

CHAPTER 10/HYPOTHESIS TESTING: CATEGORICAL DATA 253 To compute the expected count in each group we multiply the probabilities by the grand total (143) as follows: BMI group Observed frequency Probability Under a normal model Expected frequency 19.9d41 .298 42.7 20.0-22.9 […]

CHAPTER 10/HYPOTHESIS TESTING: CATEGORICAL DATA 237 Missing 1 2 3 All 171 273 444 Tabulated statistics: Mat_curr, elbow Rows: Mat_curr Columns: elbow 0 1 All Wood 50 62 112 Tabulated statistics: Str_curr, elbow Rows: Str_curr Columns: elbow 0 1 All […]

217 HYPOTHESIS TESTING: CATEGORICAL DATA 10.1 We use the sample size formula in Equation 10.13 (in Chapter 10, text) as follows 10.2 We use Equation 10.17 (in Chapter 10, text), where drop-out rate drop-in rate . That is, . Thus, […]

204 CHAPTER 9/NONPARAMETRIC METHODS Mann-Whitney Test and CI: Dpanph_1, Dpanph_3 N Median Mann-Whitney Test and CI: Dpanph_1, Dpanph_4 N Median Dpanph_1 30 0.000 Dpanph_4 38 0.000 95.1 Percent CI for ETA1-ETA2 is (-0.000,0.100) The test is significant at 0.5646 (adjusted […]

192 NONPARAMETRIC METHODS 9.1 We use the sign test. We have C n 15, = 15 + 8 = 23. We use the normal theory test. The rejection region is given by C c!2 or C c1, where 9.3 First […]

180 CHAPTER 8/HYPOTHESIS TESTING: TWO SAMPLE INFERENCE between the control and the high NAPAP groups, but not between the control and the low NAPAP groups. We will perform two-sample t-tests accordingly. Test for Equal Variances: Change_1, Change_3 95% Bonferroni confidence […]

166 CHAPTER 8/HYPOTHESIS TESTING: TWO SAMPLE INFERENCE 8.72 For hormone group 2, we note that the median dosage level is equal to the maximum dosage level and so no patients could be classified as high-dose according the directions given. Instead […]

146 HYPOTHESIS TESTING: TWO SAMPLE INFERENCE 8.2 Test the hypothesis versus . We have the test statistic F s 2 2 s 1 2 0.76 2 0.64 2 1.410 ~ F 39, 24 under . Since , it follows that […]

CHAPTER 7/HYPOTHESIS TESTING: ONE SAMPLE INFERENCE 133 N Mean StDev SE Mean Calor_dr 173 1619.9 323.4 24.6 7.66 After creating new variables representing percentage of calories from fat (saturated fat) for both DR and FFQ, and performing two-sample t-tests as […]

119 HYPOTHESIS TESTING: ONE SAMPLE INFERENCE 7.1 We test the hypothesis H010:. P versus H110:. P z, where V 04. under either hypothesis. We use the one-sample z-test. The rejection region is defined by zz  .. 025 196 or […]

106 CHAPTER 6/ESTIMATION Therefore, the 95% CI for the variance is 286 1.90  2 334.74 ,286 1.90  2 241.05 § © ¨ ¨ ¨ · ¹ ¸ ¸ ¸ 3.08, 4.27  6.65 We estimate the probability by […]

93 ESTIMATION 6.1 The treatments will be labeled as A and B and patients will be assigned to treatment A if the random digit is from 0 to 4 inclusive and to treatment B if it is from 5 to […]

CHAPTER 5/CONTINUOUS PROBABILITY DISTRIBUTIONS 79 5.64 We wish to compute where X follows a Poisson distribution with parameter . From the Poisson tables (Table 2) we have . Since p < .05 we conclude that there are a significant excess […]

65 CONTINUOUS PROBABILITY DISTRIBUTIONS 5.6 If X represents total carbohydrate intake in 12–14-year-old males, then we compute Pr Y!140  1) 140 124 20 § © ¨ · ¹ ¸ 1) 0.80  10.7881 0.212 5.7 We compute Pr Y90 […]

54 CHAPTER 4/DISCRETE PROBABILITY DISTRIBUTIONS 4.62 Suppose a person is followed for n years. Using a similar argument as given in the answer to Problem 4.76, Pr(not becoming blind over n years)   1 0074.n Thus, Pr(becoming blind over […]

43 DISCRETE PROBABILITY DISTRIBUTIONS 4.1 xPr X x  0 .72 4.3 Var(X) E(X 2 ) P 2 E(X 2 ) 1 2 (.26) 2 2 (.02) .34 Var(X) .34 (.30) 2 .25 4.4 xF x  0 0 01d […]

32 CHAPTER 3/PROBABILITY 3.78 We know that 3.79 RR=Pr(B|A)/Pr(B|A ࡄ). Here, B={Clearance} and A={Amoxicillin} First, for unilateral cases (ID =  128) . . . RR = Pr(B|A)/Pr(B|A ࡄ) = (27/66) / (38/62) = (0.4091)/(0.6129) = 0.67 Next, for bilateral […]

PROBABILITY 3.1 means that at least one parent has influenza. 3.2 means that both parents have influenza. 3.3 No. Both children can have influenza. 3.4 means that at least one child has influenza, because if occurs, then B must occur. […]

2 DESCRIPTIVE STATISTICS 2.1 We have 2.2 We have that s 2 i 1 24 58.6   24 784 24 32.67 s standard deviation = variance days572. range largest smallest o b servation days   30 3 27 […]

D. Options have a unique set of terminology. Define the following terms: (1) call option; (2) put option; (3) exercise price; (4) striking, or strike, price; (5) option price; (6) expiration date; (7) exercise value; (8) covered option; (9) naked […]

Chapter 21: Mergers and Acquisitions Learning Objectives 569 Chapter 21 Mergers and Acquisitions Learning Objectives After reading this chapter, students should be able to: ◆ Identity the different types of mergers and the various rationales for mergers. ◆ Conduct a […]

554 Integrated Case Chapter 20: Hybrid Financing Integrated Case 20–13 Fish & Chips Inc., Part I Lease Analysis Martha Millon, financial manager for Fish & Chips Inc., has been asked to perform a lease-versus-buy analysis on a new computer system. […]

Chapter 20: Hybrid Financing Learning Objectives 539 Chapter 20 Hybrid Financing: Preferred Stock, Leasing, Warrants, and Convertibles Learning Objectives After reading this chapter, students should be able to: ◆ Identify the basic features of preferred stock and explain its advantages […]

Chapter 19: Multinational Financial Management Integrated Case 525 7. To retain customers. It makes good business sense to follow customers abroad to retain the business. Large U.S. banks, such as Citibank and Chase, initially expanded abroad to supply banking services […]

Chapter 19: Multinational Financial Management Learning Objectives 511 Chapter 19 Multinational Financial Management Learning Objectives After reading this chapter, students should be able to: ◆ Identify the primary reasons companies choose to go “global.” ◆ Explain how exchange rates work […]

Chapter 18: Derivatives and Risk Management Learning Objectives 485 Chapter 18 Derivatives and Risk Management Learning Objectives After reading this chapter, students should be able to: ◆ Identify the circumstances in which it makes sense for companies to manage risk. […]

Chapter 17: Financial Planning and Forecasting Comprehensive/Spreadsheet Problem 473 b. S0$3,600,000 L0*$540,000 M5.00% 1 ‒ Payout 40.00% AFN = (A0*/S0)ΔS–(L0*/S0)ΔS– AFN = (A0*/S0)ΔS –(L0*/S0)ΔS – M(S0 )(1 ‒ Payout) – M (1 ‒ Payout) ΔS AFN = 0.75 ΔS –0.15 […]

Chapter 17: Financial Planning and Forecasting Learning Objectives 461 Chapter 17 Financial Planning and Forecasting Learning Objectives After reading this chapter, students should be able to: ◆ Discuss the importance of strategic planning and the central role that financial forecasting […]

Chapter 16: Working Capital Management Integrated Case 447 Barnes has long believed that SKI’s working capital situation should be studied—the company may have the optimal amounts of cash, securities, receivables, and inventories; but it may also have too much or […]

Chapter 16: Working Capital Management Learning Objectives 433 Chapter 16 Working Capital Management Learning Objectives After reading this chapter, students should be able to: ◆ Explain how different amounts of current assets and current liabilities affect firms’ profitability and thus […]

420 Integrated Case Chapter 15: Distributions to Shareholders retaining them for reinvestment in the firm. Dividend policy really involves three key issues: (1) How much should be distributed? (2) Should the distribution be as cash dividends, or should the cash […]

Chapter 15: Distributions to Shareholders Learning Objectives 407 Chapter 15 Distributions to Shareholders: Dividends and Share Repurchases Learning Objectives After reading this chapter, students should be able to: ◆ Explain why some investors like the firm to pay more dividends […]

xiv Preface In order to be excused from an exam, the student must contact me before the exam. If you cannot reach me, leave a message with the department secretaries at 392-0153. In most cases I will require students to […]

Contents iii Instructors Manual Contents Preface Alternative Formats for the Introductory Course v Contents of the Instructor’s Manual v Integrated Cases and Lecture Presentation Software v PowerPoint Slide Show vii Comprehensive/Spreadsheet Problems vii Chapter Spreadsheet Models vii Textbook Companion Website […]

Chapter 14: Capital Structure and Leverage Integrated Case 389 Integrated Case 14–15 Campus Deli Inc. Optimal Capital Structure Assume that you have just been hired as business manager of Campus Deli (CD), which is located adjacent to the campus. Sales […]

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 280 Chapter 25 ANSWERS TO QUESTIONS 1. From 2008 to 2017, auto loan rates in the United States declined from around 8% to near historic […]

Chapter 14: Capital Structure and Leverage Learning Objectives 371 Chapter 14 Capital Structure and Leverage Learning Objectives After reading this chapter, students should be able to: ◆ Explain why there may be differences in a firm’s capital structure when measured […]

Chapter 24 ANSWERS TO QUESTIONS 1. What does the Lucas critique state about the limitations of our current understanding of the way in which the economy works? The Lucas critique says that policymakers’ priors about the effects of a given […]

◆ Discuss how projects’ NPVs are affected by the size of the firm’s total capital budget, the process involved in determining a firm’s capital budget, and the analysis undertaken in selecting value– maximizing projects. ◆ Describe the post-audit, which is […]

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 254 Chapter 23 ANSWERS TO QUESTIONS 1. What does it mean when we say that the inflation gap is negative? When the inflation gap is […]

340 Integrated Case Chapter 12: Cash Flow Estimation and Risk Analysis E. (1) What three levels, or types, of project risk are normally considered? Answer: [Show S12-16 through S12-19 here.] Here are the three types of project risk: 1. Stand-alone […]

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 241 Chapter 22 ANSWERS TO QUESTIONS 1. Explain why the aggregate demand curve slopes downward and the short-run aggregate supply curve slopes upward. A rise […]

Chapter 12: Cash Flow Estimation and Risk Analysis Comprehensive/Spreadsheet Problem 327 Comprehensive/Spreadsheet Problem Note to Instructors: The solution to this problem is not provided to students at the back of their text. Instructors can access the Excel file on the […]

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 230 Chapter 21 ANSWERS TO QUESTIONS 1. When the inflation rate increases, what happens to the federal funds rate? Operationally, how does the Fed adjust […]

Chapter 12: Cash Flow Estimation and Risk Analysis Learning Objectives 307 Chapter 12 Cash Flow Estimation and Risk Analysis Learning Objectives After reading this chapter, students should be able to: ◆ Identify “relevant” cash flows that should and should not […]

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 219 Chapter 20 ANSWERS TO QUESTIONS 1. “When the stock market rises, investment spending is increasing.” Is this statement true, false, or uncertain? Explain your […]

288 Comprehensive/Spreadsheet Problem Chapter 11: The Basics of Capital Budgeting Calculate MIRRB at WACC = 10%: Step 1: Calculate the NPV of the uneven cash flow stream, so its FV can then be calculated. With a financial calculator, enter the […]

Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 210 Chapter 19 ANSWERS TO QUESTIONS 1. How would you expect velocity to typically behave over the course of the business cycle? Since nominal GDP […]

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Mishkin • Instructor’s Manual for The Economics of Money, Banking, and Financial Markets, Twelfth Edition 201 Chapter 18 ANSWERS TO QUESTIONS 1. If the Federal Reserve sells dollars in the foreign exchange market but conducts an offsetting open market operation […]