BUSI 420 Homework 4 Behavioral Finance Assignment solutions complete answers

BUSI 420 Homework 4 Behavioral Finance Assignment solutions complete answers

 

Below you will find the closing stock prices for eBay over a three-week period. Calculate the simple three-day and five-day moving averages for the stock. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

 

Use the data below to construct the advance/decline line and Arms ratio for the market. Volume is in thousands of shares. (Input all amounts as positive values. Do not round intermediate calculations. Round your "Arms Ratio" answers to 3 decimal places.)

 

Use the data below to construct the Arms ratio on each of the five trading days. (Do not round intermediate calculations. Round your answers to 3 decimal places.)

 

Ross Co., Westerfield, Inc., and Jordan Company announced a new agreement to market their respective products in China on July 18, February 12, and October 7, respectively. Given the information below, calculate the cumulative abnormal return (CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return. (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to two decimal place.)

 

Question 1

 

On November 14, Thorogood Enterprises announced that the public and acrimonious battle with its current CEO had been resolved. Under the terms of the deal, the CEO would step down from his position immediately. In exchange, he was given a generous severance package. Given the information below, calculate the cumulative abnormal return (CAR) around this announcement. Assume the company has an expected return equal to the market return. (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place.)

 

Question 2

 

Ross Co., Westerfield, Inc., and Jordan Company announced a new agreement to market their respective products in China on July 18 (7/18), February 12 (2/12), and October 7 (10/7), respectively. Given the information below, calculate the cumulative abnormal return (CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return. (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place.)

 

Question 3

 

Use the data below to construct the advance/decline line for the stock market. Volume figures are in thousands of shares. (Input all amounts as positive values. Do not round intermediate calculations. Round your answers to the nearest whole number.)

 

Question 4

 

Construct the Arms ratio on each of the five trading days. (Do not round intermediate calculations. Round your answers to 3 decimal places.)

 

Question 5

 

The table below shows the closing monthly stock prices for IBM and Amazon. Calculate the simple three-month moving average for each month for both companies. (Input all amounts as positive values. Do not round intermediate calculations. Round your answers to 2 decimal places.)

 

Question 6

 

The table below shows the closing monthly stock prices for IBM and Amazon. Calculate the exponential three-month moving average for both stocks where two-thirds of the average weight is placed on the most recent price. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

 

Question 7

 

A group of investors was polled each week for the last five weeks about whether they were bullish or bearish concerning the market. Construct the market sentiment index for each week based on these polls. (Do not round intermediate calculations. Round your answers to 4 decimal places.)

 

Question 8

 

You are given the following information concerning the trades made on a particular stock. Calculate the money flow for the stock based on these trades. (Leave no cells blank - be certain to enter "0" wherever required. A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest whole dollar.)

 

Question 9

 

Use the data below to construct the advance/decline line and Arms ratio for the market. Volume is in thousands of shares. (Input all amounts as positive values. Do not round intermediate calculations. Round your "Arms Ratio" to 3 decimal places.)

 

Question 10

 

A stock had the following trades during a particular period. What was the money flow for the stock? (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Do not round intermediate calculations. Round your answers to the nearest whole dollar.)

 

Question 11

 

Below you will find the closing stock prices for eBay over a three-week period. Calculate the simple three-day and five-day moving averages for the stock. (Round your answers to 2 decimal places.)

 

 

Problem 8-13 Simple Moving Averages (LO4, CFA3)
Below you will find the closing stock prices for Auction Makers over a three-week period. Calculate the simple three-day and five-day moving averages for the stock and graph your results. Are there any technical indications of the future direction of the stock price?

Note: Do not round intermediate calculations. Round your answers to 2 decimal places.

 

Problem 8-11 Money Flow (LO4, CFA3)

A stock had the following trades during a particular period. What was the money flow for the stock?

Note: Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Do not round intermediate calculations. Round your answers to the nearest whole number.

Week
Day
Price
Volume
1
Monday
$ 52.71
 
Tuesday
52.67
1,600
Wednesday
52.68
2,000
Thursday
52.71
1,900
Friday
52.70
2,050
2
Monday
52.73
1,100
Tuesday
52.74
1,500
Wednesday
52.78
600
Thursday
52.77
1,000
Friday
52.79
2,200
 

Problem 8-10 Advance or Decline Lines and Arms Ratio (LO4, CFA3)

Use the data below to construct the advance or decline line and Arms ratio for the market. Volume is in thousands of shares.

Note: Input all amounts as positive values. Do not round intermediate calculations. Round your "Arms Ratio" answers to 3 decimal places.

 
Stocks Advancing
Advancing Volume
Stocks Declining
Declining Volume
Monday
1,931
956,741
700
72,350
Tuesday
2,636
584,531
779
216,439
Wednesday
1,472
518,757
1,323
499,536
Thursday
2,184
939,508
837
314,537
Friday
1,997
595,751
1,202
382,328
 

Problem 8-7 Money Flow (LO4, CFA3)

You are given the following information concerning the trades made on a particular stock. Calculate the money flow for the stock based on these trades.

Note: Leave no cells blank - be certain to enter "0" wherever required. A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest whole number.

Price
Volume
$ 70.05
 
70.06
2,600
70.04
2,100
70.03
2,500
69.04
2,650
70.28
3,400
70.19
3,700
 

Problem 8-6 Market Sentiment Index (LO4, CFA3)

A group of investors was polled each week for the last five weeks about whether they were bullish or bearish concerning the market. Construct the market sentiment index for each week based on these polls.

Note: Do not round intermediate calculations. Round your answers to 4 decimal places.

Week
Bulls
Bears
1
59
63
2
53
70
3
48
75
4
51
72
5
53
78
 

Problem 8-4 Exponential Moving Averages (LO4, CFA3)

The table below shows the closing monthly stock prices for Penn Company and Teller, Incorporated. Calculate the exponential three-month moving average for both stocks where two-thirds of the average weight is placed on the most recent price.

Note: Input all amounts as positive values. Do not round intermediate calculations. Round your answers to 2 decimal places.

 
Penn
Teller
January
$ 171.44
$ 604.71
February
174.49
616.64
March
183.91
582.53
April
199.80
545.30
May
195.25
522.78
June
205.87
502.78
July
226.51
604.59
August
211.54
539.61
September
217.67
514.26
October
213.87
595.67
November
193.64
596.78
December
173.94
649.20
 

Problem 8-3 Simple Moving Averages (LO4, CFA3)

The table below shows the closing monthly stock prices for Penn Company and Teller, Incorporated. Calculate the simple three-month moving average for each month for both companies.

Note: Input all amounts as positive values. Do not round intermediate calculations. Round your answers to 2 decimal places.

 
Penn
Teller
January
$ 176.24
$ 616.31
February
177.69
625.28
March
193.99
571.25
April
210.44
548.50
May
191.41
506.14
June
209.55
493.18
July
237.15
606.99
August
201.70
536.01
September
221.51
512.18
October
214.83
603.75
November
197.24
589.82
December
176.18
658.00




Problem 8-2 Calculating Arms Ratio (LO4, CFA3)

Use the data below to construct the Arms ratio on each of the five trading days.

Note: Do not round intermediate calculations. Round your answers to 3 decimal places.

 
Stocks Advancing
Advancing Volume
Stocks Declining
Declining Volume
Monday
2,002
838,133
1,614
691,144
Tuesday
1,799
628,360
1,199
450,797
Wednesday
2,008
624,869
1,622
720,828
Thursday
2,479
1,113,404
549
174,239
Friday
1,676
511,718
1,471
497,085
 

Problem 8-1 Advance or Decline Lines (LO4, CFA3)
Use the data below to construct the advance or decline line for the stock market. Volume figures are in thousands of shares.

Note: Input all amounts as positive values. Do not round intermediate calculations. Round your answers to the nearest whole number.

 

Problem 7-5 Cumulative Abnormal Returns (LO2, CFA2)
Ross Company; Westerfield, Incorporated; and Jordan Company announced a new agreement to market their respective products in China on July 18, February 12, and October 7, respectively. Given the information below, calculate the cumulative abnormal return (CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return.

Note: A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place.

 

Problem 7-1 Cumulative Abnormal Returns (LO2, CFA2)

On November 14, Thorogood Enterprises announced that the public and acrimonious battle with its current CEO had been resolved. Under the terms of the deal, the CEO would step down from his position immediately. In exchange, he was given a generous severance package. Given the information below, calculate the cumulative abnormal return (CAR) around this announcement. Assume the company has an expected return equal to the market return.

Note: A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place.