Managerial Analysis homework

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Instructions

Instructions
NAME:
To complete the homework assignments in the templates provided:
1. The question is provided for each problem. You may need to refer to your textbook for additional information in a few cases.
2. You will enter the required information into the shaded cells.
3. The cells are coded:
a) T requires a text answer. Essay questions require references; use the textbook.
b) C requires a calculation, using Excel formulas or functions. You cannot perform the operation on a calculator and then type the answer in the cell. You will enter the calculation in the cell, and only the final answer will show in the cell. I will be able to review your calculation and correct, if necessary.
c) F requires a number only. In some problems, a “Step 1” is added to help you solve the problem.
d) Formula requires a written formula, not the numbers. For example, the rate of return = [(1 + nominal)/ (1+inflation)]-1, or D (debt) + E (equity) = V (value).
4. Name your assignment file as "LastnameFirstinitial-BUSN602-Week#", and submit by midnight ET, Day 7.

DQ5-1

Discussion Question 5-1
List and describe briefly the economic policy objectives of the nation.
Answer:
T

E5-2

Exercise 5-2
Important policy objectives of the federal government include economic growth, high employment, price stability, and a balance in international transactions. The achievement of these objectives is the responsibility of monetary policy, fiscal policy, and debt management carried out by the Federal Reserve System, the President, the Congress, and the U.S. Treasury. Describe the responsibilities of the various policy makers in trying to achieve the four economic policy objectives.
Answer:
T

P5-2

Problem 5-2
Assume that Bank A receives a primary deposit of $100,000 and that it must keep reserves of 10 percent against deposits. a. Prepare a simple balance sheet of assets and liabilities for the bank immediately after the deposit is received. b. Assume Bank A makes a loan in the amount that can be “safely lent.” Show what the bank’s balance sheet of assets and liabilities would look like immediately after the loan. c. Assume that a check in the amount of the “derivative deposit” created in Part b was written and sent to another bank. Show what Bank A’s (the lending bank’s) balance sheet of assets and liabilities would look like after the check is written.
Answer:
Enter the answers in blue shaded cells
a. ASSETS LIABILITIES
T F T F
b. ASSETS LIABILITIES
T F T F
T F
c. ASSETS LIABILITIES
T F T F
T F

P5-6

Problem 5-6
Assume a financial system has a monetary base of $25 million. The required reserves ratio is 10 percent and there are no leakages in the system. a. What is the size of the money multiplier? b. What will be the system’s money supply?
Answer:
a. Money multiplier C
b. Money supply C

DQ7-17

Discussion Question 7-17
What are the life cycle stages of corporations and other business firms?
Answers:
T

E7-3

Exercise 7-3
Match the following financial instruments and securities with their issuers. Instruments/Securities a. corporate stocks b. Treasury bonds c. municipal bonds d. negotiable certificates of deposit Issuers 1. commercial banks 2. corporations 3. U.S. government 4. state/local governments
Answer:
Enter the answers in blue shaded cells
Instruments/Securities Issuers
a. corporate stocks T
b. Treasury bonds T
c. municipal bonds T
d. negotiable certificates of deposit T

E7-4

Exercise 7-4
Match the following financial instruments and securities with their typical maturities. Instruments/Securities a. corporate stocks b. Treasury bills c. mortgages d. commercial paper Maturities 1. less than one year 2. no maturity 3. up to about 30 years 4. up to one year
Answer:
Enter the answers in blue shaded cells
Instruments/Securities Maturities
a. corporate stocks T
b. Treasury bonds T
c. mortgages T
d. commercial paper T

P7-5

Problem 7-5
The components that comprise a nation’s gross domestic product were identified and discussed in the chapter. Assume the following accounts and amounts were reported by a nation last year. Government purchases of goods and services were $5.5 billion; personal consumption expenditures were $40.5 billion; gross private domestic investment amounted to $20 billion; capital consumption allowances were $4 billion; personal savings were estimated at $2 billion; imports of goods and services amounted to $6.5 billion; and the exports of goods and services were $5 billion. a. Determine the nation’s gross domestic product. b. How would your answer change if the dollar amounts of imports and exports are reversed?
Answer:
Enter the answers in blue shaded cells
GDP Components* Part A (in billions) Part B (in billions)
T F F
T F F
T F F
T C C
Gross domestic product (GDP) C C
*TIP: See p. 151

Indicators

Indicators
An economic indicator is data, usually of macroeconomic scale, used by investors to interpret current or future investment possibilities and to judge the overall health of an economy. Identify and define five economic indicators. Use the library or internet sources to complete this exercise.
Answer:
Indicator 1: T
Indicator 2: T
Indicator 3: T
Indicator 4: T
Indicator 5: T