question archive The data in the table below describe key features of the trade relations between China and three of its major trading partners
The data in the table below describe key features of the trade relations between China and three of its major trading partners
Subject:BusinessPrice: Bought3
The data in the table below describe key features of the trade relations between China and three of its major trading partners. Use these data to answer parts a. and b. Exchange rates are expressed in Chinese Yuan or Renminbi terms. Country Share of Trade Exchange Rate 2005 Exchange Rate 2012 Price Index 2005 (CPI) Price Index 2012 (CPI) Europe 40% 10.6 RMB/Euro 8.26 RMB/Euro NA NA Japan 30% 12.9 Yen/ RMB 12.8 Yen/RMB NA NA USA 30% 8.28 RMB/$ 6.30 RMB/$ 195 230 a. Calculate the trade weighted exchange rate for China for 2012, assuming that the 2005 rate equals 100. How much has it changed since 2005? [Be careful to use appropriate units in your calculations.] b. Assume that China's price index in 2005 was 100 and that for 2012, it stands at 130. How has the real exchange rate between the U.S & China changed between 2005 and 2012? c. Explain why the real exchange rate represents terms of trade. 4. On a number of occasions, U.S. Senators have proposed levying a tariff on Chinese imports. Assume that the U.S. is a large open economy. Carefully illustrate and discuss the potential effects of such a policy on the real exchange rate, net exports, and domestic investment. How would the results change if the U.S. were a small open economy?
We will now analyze the historical returns of your chosen stocks. You may choose any time period and frequency you deem suitable, but make sure that all of your returns are reported as annualized rates. You will want to use the adjusted closing price to automatically account for the effects of dividends and splits. (a) (10) For each stock as a well as a suitable market index, report the mean and standard deviation of returns. (b) (10) Find the variance-covariance matrix of the two stocks and the market index, and report the beta of each stock. (c) (10) We now consider the benefits of diversifying by constructing a portfolio consisting of both of your stocks. For each value of x = {0, 0.1, 0.2, . . ., 1}, consider a portfolio with a proportion x of your wealth invested in your first stock and 1 − x invested in the second, and compute the mean and standard deviation of the portfolio return. (d) (10) Assume a risk free rate of rf = 0.01. In a well-diversified portfolio, only market risk matters, so the risk premium of any stock should be proportional to its beta. If this were true, what should be the returns you expect to earn from your two stocks, and how does this compare to their historical averages?
Answersss
Apply the Dividend Discount Model (DDM) to analyze the effect of the interest rate on the valuation of shares. We must also make connections to reality, but be aware then that the model is a rough simplification of reality and that the specific figures in the task are made up. I would still like to emphasize that the general points we will make are still the highest relevant to the valuation of shares and the current situation we are in today. This is why that all models for how to value stocks are to some extent about discounting a future cash flow and is affected by interest rates. A small economy in an unknown place in the world has since the beginning of time (year 0) experienced 24 years of declining interest rates and they went from paying about 6% interest on 10-year government securities to to pay as little as 0% interest on 10-year government securities today. The interest rate has fallen gradually by 0.25% every year. Assume that the company Marknaden AB has had a risk premium that has been stable at 6% throughout period and that a dividend of SEK 10 per share was distributed in year 1. The dividend has since grown accordingly expectation of 2% per year, which is also the growth rate expected for all time to come. Assume that the interest rate on 10-year government securities is equal to the risk-free interest rate and calculate the required rate of return to ???? = ???????? + risk premium.
i) Valuate Marknaden AB's share for each year from year 0 to year 24 using DDM and plot the value of the stock in a chart. Suppose one at each time has assumed that the prevailing interest rate will be forever.
ii) Evaluate Marknaden ABs under two hypothetical scenarios where the interest rate is instead in one the case is still at 2% throughout the period and in the second case is still at 6% throughout period. Plot the values ??according to the two different scenarios in the same diagram as above.
a. Comment on the graph you produced according to i) and ii) in general and also specifically discuss the development of the share price given the different interest rates. What is the difference in the share price's percentage growth given the falling interest rate compared to if the interest rate had remained at 6%? Also connect developments in the Swedish stock market over the past 24 years
A buyer earns $48,000 salary per year. In order to qualify for an 85 percent loan, his monthly PITI payment cannot be more than 28 percent of his monthly salary. The annual taxes and insurance will be $2,352.60. If the monthly principal and interest payment is $6.00 per $1,000 of loan amount, what is the most sales price he can afford?
Question:
Please assist with any thoughts on the below items (1 and 2)
1. Systems development life cycles are crucial to integrate for most, if not all IT based projects. There are various different SDLC models, but all of them essentially accomplish the same task in promoting consitent workflow, progress, and efficiency on IT projects.
In my current work as a software engineer, I work in the agile scrum SDLC model. This is the model that I would also reccomend for GGFRT to follow. In agile, IT projects are divided into ~2 week long sprints, containing meetings at the beginning of the sprint to plan, every day to keep everyone on the same page, and typically a meeting at the end of a sprint to view it retrospectivly. For example, at the organization I work at, we have multiple different projects with multiple different teams working all in conjunction together. The daily meetings keeping everyone of different projects synchronous helps to keep everyone organized and on the same page. This is just one example of why GGFRT should implement the agile scrum work methodology, because as we know GGFRT plans to initiate multiple IT projects at once, so having everyone communicate regularly would help prevent many obstacles along the way.
2. From the research you conducted on the System Development Life Cycle (SDLC) models, identify which model you would recommend for the IT organization at GGFRT? Relate your choice to one of the strategic objectives of GGFRT and thoroughly explain your answer. In addition, please discuss potential challenges to the successful implementation of the model.
The SDLC Agile Project Management Model is recommended for GGFRT to adopt; specifically, as it relates to accomplishing their 1st and 3rd strategic objectives. Both objectives are centered around improving IT systems and customer satisfaction. The Agile Project Management Model aims to incorporate the following principles:
Customer Satisfaction
Collaboration
Reviews at regular intervals
Sustainable development throughout the SDLC
Receptive to change
Independent teams working on all aspects of the project(s).
Technical excellence
Motivation focused
The Agile model promotes a collaborative environment that enables the developer and customers to make efficient decisions quickly and appropriately, (Usman, Ogwuleka 2018). This model is ideal for GGFRT based on the multiple systems that require development or modifications along with the need for integration across the various systems. Additionally, some of these systems are designed to support direct customer involvement, with the intent of improving the overall level of service GGFRT can offer its customer base.
Some potential challenges to the successful implementation of the Agile model include potential inexperience of staff, particularly with the programmers, a lack of clarity when it comes to customer expectations, mediocre documentation, and a clear understanding of the level or work and time that will be needed to successfully complete the projects.
Question:
Please assist with any thoughts on the below items (1 and 2)
1. Systems development life cycles are crucial to integrate for most, if not all IT based projects. There are various different SDLC models, but all of them essentially accomplish the same task in promoting consitent workflow, progress, and efficiency on IT projects.
In my current work as a software engineer, I work in the agile scrum SDLC model. This is the model that I would also reccomend for GGFRT to follow. In agile, IT projects are divided into ~2 week long sprints, containing meetings at the beginning of the sprint to plan, every day to keep everyone on the same page, and typically a meeting at the end of a sprint to view it retrospectivly. For example, at the organization I work at, we have multiple different projects with multiple different teams working all in conjunction together. The daily meetings keeping everyone of different projects synchronous helps to keep everyone organized and on the same page. This is just one example of why GGFRT should implement the agile scrum work methodology, because as we know GGFRT plans to initiate multiple IT projects at once, so having everyone communicate regularly would help prevent many obstacles along the way.
2. From the research you conducted on the System Development Life Cycle (SDLC) models, identify which model you would recommend for the IT organization at GGFRT? Relate your choice to one of the strategic objectives of GGFRT and thoroughly explain your answer. In addition, please discuss potential challenges to the successful implementation of the model.
The SDLC Agile Project Management Model is recommended for GGFRT to adopt; specifically, as it relates to accomplishing their 1st and 3rd strategic objectives. Both objectives are centered around improving IT systems and customer satisfaction. The Agile Project Management Model aims to incorporate the following principles:
Customer Satisfaction
Collaboration
Reviews at regular intervals
Sustainable development throughout the SDLC
Receptive to change
Independent teams working on all aspects of the project(s).
Technical excellence
Motivation focused
The Agile model promotes a collaborative environment that enables the developer and customers to make efficient decisions quickly and appropriately, (Usman, Ogwuleka 2018). This model is ideal for GGFRT based on the multiple systems that require development or modifications along with the need for integration across the various systems. Additionally, some of these systems are designed to support direct customer involvement, with the intent of improving the overall level of service GGFRT can offer its customer base.
Some potential challenges to the successful implementation of the Agile model include potential inexperience of staff, particularly with the programmers, a lack of clarity when it comes to customer expectations, mediocre documentation, and a clear understanding of the level or work and time that will be needed to successfully complete the projects.
Part I (30 points) 1. Use the following version of Model 1 to address parts a -e. W/P = d0 -d1*L + d2*K + d3*RM (1) Endogenous Exogenous L s = so + s1*(W/P) + s2*EITC (2) W, P, L, Ls ,Y K,RM,EITC L = Ls (3) AD, C, I, T M, k, G Y = 100*L.7K .3 (4) AD = k*M/P (5) EITC=earned income tax credit AD = C + I + G (6) C = .8* (Y-T) (7) T = .25*Y (8) Y = AD (9) a. Determine the reduced form equation for employment. b. Determine the reduced form equation for output (income). c. Identify the Aggregate Supply curve. d. Use the results from a, b, and c to determine how an increase in the earned income tax credit (EITC-subsidies to low income workers) would affect employment, output, real wages, and the price level. e. Use the results from a, b, and c to determine how a rise in governmental purchases (G) would affect employment, output, real wages, and the price level. Part II. Answer two of the following three questions (20 points each). Be sure to show your work. 2. Use the data in the table below to represent a household's consumption and income for each given year. a. Use a fixed weight index (Laspeyres) to determine how much income has changed for this household from year 1 to year 2. b. Use a current weight index (Paasche) to determine how much income has changed from year 1 to year 2. c. Use a chain weighted index to determine how much income has changed between the two years. 3. The data in the table below describe key features of the trade relations between China and three of its major trading partners. Use these data to answer parts a. and b. Exchange rates are expressed in Chinese Yuan or Renminbi terms. Country Share of Trade Exchange Rate 2005 Exchange Rate 2012 Price Index 2005 (CPI) Price Index 2012 (CPI) Europe 40% 10.6 RMB/Euro 8.26 RMB/Euro NA NA Japan 30% 12.9 Yen/ RMB 12.8 Yen/RMB NA NA USA 30% 8.28 RMB/$ 6.30 RMB/$ 195 230 a. Calculate the trade weighted exchange rate for China for 2012, assuming that the 2005 rate equals 100. How much has it changed since 2005? [Be careful to use appropriate units in your calculations.] b. Assume that China's price index in 2005 was 100 and that for 2012, it stands at 130. How has the real exchange rate between the U.S & China changed between 2005 and 2012? c. Explain why the real exchange rate represents terms of trade. 4. On a number of occasions, U.S. Senators have proposed levying a tariff on Chinese imports. Assume that the U.S. is a large open economy. Carefully illustrate and discuss the potential effects of such a policy on the real exchange rate, net exports, and domestic investment. How would the results change if the U.S. were a small open economy?
