A Message to Garcia Essay Example for Free

A Message to Garcia Essay Written by, Elbert Hubbard, is a story written about trying to find the ideal messenger, or employee. And in many cases is hard to find even when it comes to a simple task, in this case, delivering a message. Hubbard goes on to explain that some individuals, when tasked with such a job will make it rather difficult. They will either ask questions, â€Å"who is Garcia? Where is he? Why can’t you do it? Have someone else do it.† Hubbard points out the most common flaws or unwanted qualities of employers when all he, or any employer are looking for is someone who is hard working and can be trusted with an important task regardless of what it is. And that is the type of worker that no employer can afford to lose. No matter when you are, regardless or your occupation, type of company or size, there will always be the workers that are replaceable, irreplaceable, or those who no one will hire. Hubbard explains the vast majority or employees that are in the work force. Lazy, irresponsible, untrustworthy, or are just plain worthless. However, the search for that one who will work hard even when no one is looking is rare to find, and that when he is found, he cannot be let go. After reading this book, it makes one realize, and actually look at whom they work with now, or in the past and see whom or how many actually fall into the category or workers Hubbard described. I for one was able to actually put faces with some of the examples given. More important than that, was looking at where I fit in, or which one describes me the best. Hardworking and the one that is rare and every employer is looking for, sure we would all like to think that but the reality of it, may not be as close as we would like to think. When tasked with delivering a message to Garcia, I would think it be natural for one to ask, â€Å"where is he†, such information is key. Rather than blindly searching for a man named Garcia with out so much of a direction. Does a question make one any less of their overall work ethic? I would think not, but when it comes to questioning the motives and  what is in the letter is completely different. Irreverent questions to the task at hand are unnecessary and would be seen as lazy or nosy. Overall it was an interesting book that makes you think other wise of not only yourself, but also those you work with all well. I would recommend any employer to have their employees read this book for they start working. That way it gives them something to think about, think about themselves and which type of employee they truly want to be. Also gives them an idea of what that employer is looking for in their workers, that way there is no question about what is expected. â€Å"He is wanted in every city, town and village- in every office, shop and factory. The world cries out for such: he is needed, needed badly- the man who can carry a message to Garcia.†

Comparative Study Between Pizza Hut And Dominos Business Essay

Comparative Study Between Pizza Hut And Dominos Business Essay This research is based on service comparison of pizza hut and dominos. Delivering quality service is of utmost important. This research is based to test the quality of service and comparison between two pizza Houses. The fast food industry of India is experiencing phenomenal growth and is one of the fastest growing sectors in the country, with the compounded annual growth rates of the market crossing 25%. Further, on the back of changing and busy lifestyle, fast emerging middle class population and surging disposable income, the industry will continue to grow at a pace in coming years. It now accounts for roughly half of all restaurant revenues in the developed countries and continues to expand there and in many other industrial countries in the coming years. But some of the most rapid growth is occurring in the developing world; where its radically changing the way people eat. People buy fast food because its cheap, easy to prepare, and heavily promoted. This paper aims at providing information about fast food industry, its trend, reason for its emergence and several other factors that are responsible for its growth. This report provides extensive research and rational analysis on the Indian fast food industry and tracks the changing dynamics of the market. It features market performance, key related sectors and competitive landscape of the market. The research study looks into the market condition and future forecasts, and outlines current trends and analyses. It has been made to help clients in analyzing the opportunities, challenges and drivers vital to the growth of fast food industry in India. For the purpose of this report, Fast Food Industry includes fast food restaurants, teahouses, coffee shops and juice bars in India. Consumers will be feeling the impact of the crisis far more over the coming months and will have to adjust their daily habits and attitudes accordingly. There are already clear signs pointing in this direction, which are not necessarily detrimental to food retail. In times of economic crisis, the cocooning effect tends to emerge and this involves consumers focusing increasingly on activities within their own homes. For example, they will go out less in favor of enjoying evenings in. These behaviors will impact primarily on the restaurant industry, with the lack of consumption outside the home made up for by the purchase of food products to be eaten at home, the research group noted something which has already been seen in a number of countries. Although only around half of consumers will actually be affected by the crisis, the situation will have a major impact on food retail. The various sectors, industries and retail will all be affected by the economic crisis to varying degrees. There will be losers, but also winners in this downturn. The 6000 corer fast food retail industry is mainly dominated by the multinational players and the key players which are active in the research of the food retailing include: Pizza hut Pizza Hut is one of the flagship brands of Yum! Brands, Inc., which also has KFC, Taco Bell, AW and Long John Silvers under its umbrella. Pizza Hut is the worlds largest pizza chain with over 12,500 restaurants across 91 countries. In India, Pizza Hut has 137 restaurants across 36 cities, including Delhi, Mumbai, Bangalore, Chennai, Kolkata, Hyderabad, Pune , and Chandigarh amongst others. Yum! Is in the process of opening Pizza Hut restaurants at many more locations to service a larger customer base across the country. Dominos Dominos vision is focused on Exceptional people on a mission to be the best pizza delivery company in the world! . Dominos is committed to bringing fun and excitement to the lives of our customers by delivering delicious pizzas to their doorstep in 30 minutes or less, and all its strategies are aimed at fulfilling this commitment towards its large and ever-growing customer base. Dominos constantly strives to develop products that suit the tastes of its customers, thereby bringing out the Wow effect (the feel good factor). Dominos believes strongly in the strategy of Think local and act regional. Thus, time and again Dominos has been innovating toppings suitable to the taste buds of the local populace and the Indian market has very well accepted these. Problem statement Why do people prefer Pizza-Hut over Dominos pizza (In respect of service, quality, price, location)? Research Objective To find out the comparative analysis between Pizza-hut and dominos-pizza. To check out the preferences of the people / or the customers. To find out which factors are more preferred by the customers. BACKGROUND OF THE PIZZA-HOUSES Dominos Story The Dominos Pizza story is one of passion, determination, the ability to overcome adversity and most importantly, a single-minded dream of becoming number one in the pizza home-dining industry. Four Decades Of Experience The 60s Dominos Pizza began with one store in Ypsilanti, Michigan on December 9, 1960. Its owner, Thomas S. Monaghan, was a 23-year-old student at the University Of Michigan School Of Architecture who was looking for a business venture to sponsor his studies. With his brother James, he bought an existing pizza store called Dominicks Pizza. He soon found himself absorbed in the pizza business and immediately began to make improvements. Although a novice in terms of pizza making skills and knowledge of the industry, Monaghan had the self-determination to get the job done and to do it better than anyone else. What was needed was to consistently make great pizzas fast and safely deliver them to the customers door. His partnership with his brother was dissolved in 1961, by 1965, Monaghan own three stores and officially changed the company name to Dominos Pizza, Inc. A pioneer and innovator in the pizza delivery industry, Monaghan continuously looked for better and faster ways to handle the rush. He developed a fast pizza-making method and an efficient order taking system. From the moment the phone rang to the time the pizza was delivered to the customers door, Monaghan stressed the need for hustle. Never get behind was the operating motto. Even though delivery drivers were instructed to abide by the traffic laws at all times, once they got out of their delivery vehicles they were to run to the customers house, ensuring a piping hot pizza. Capitalizing on the success he had found in his three stores servicing college campuses, Monaghan adapted the same successful system at Michigan State University in 1967. A massive pizza craving population of 20,000 students living on one campus, offering one size of pizza with only six toppings to choose from and introducing the companys 30 minute pledge soon made this store the companys biggest money maker. This store is also notable because it solidified in Monaghans mind the need to expand. Monaghan sold his first franchise to Charles Gray on April 1, 1967, after personally training Gray for the job himself. The company suffered its first serious setback when on February 8, 1968 the companys central office and commissary were destroyed by fire. The company was inadequately insured and Monaghan was only able to recoup $13,600 in losses. Nevertheless, Monaghans belief in his dream drove him to push the company forward once again. By the end of 1969, Dominos Pizza, Inc., consisted of 42 stores reporting an estimated $8.1 million in total sales. The 70s Despite its high turnover, Dominos was $1.5 million in debt. By 1970, its creditors took action and 200 lawsuits were filed against it. Monaghan lost control of the company to the banks, only to have it returned to him 10 months later in worse condition than when they had taken it over. Monaghan and his wife managed to salvage what was left of the company and once again took off in pursuit of their dreams. Monaghan focused on rebuilding the trust of his creditors and the companys reputation and spent much of his time visiting his stores, talking with store managers and team members, and observing them in action. He continued to emphasis the Dominos system of simplicity and speed. Passing on his enthusiasm for the nature of the business and creating a friendly, competitive environment, Monaghan also implemented the Manager of the Year award, a national honor presented to the companys best store crew chief. Knowing what made Dominos different; primarily its unparalleled successful system of promoting from within, pizza makers, delivery drivers and order takers all knew they had the opportunity to advance through the ranks to become a store manager or even a franchisee. This not only encouraged a spirit of entrepreneurship, but also ensured a dedicated, industrious workforce. Ten years later Monaghans vision of promoting from within to build the best company with the best people paid off as 92% of Dominos Pizza franchisees had started their careers in the company at entry level jobs. Maintaining his persistence on making training a top priority, a week-long new employee orientation program was developed as Monaghan toured the country visiting stores. After a decade and a half of sixteen hour shifts and endless obstacles to overcome, Monaghan and Dominos Pizza were finally running smoothly. By the end of 1974, there were nearly 100 stores amassing $20.4 million in sales. Late in 1974, Monaghan received a letter from Amstar Corporation which had been using the trademark Domino since 1900. It demanded that he change his companys name. With nearly 100 stores nationwide and growing public recognition and acceptance, Dominos Pizza was being told to return to the starting gate. On September 30, 1975, Amstar filed suit against Dominos Pizza for trademark infringement. Dominos lost the case and was forced to operate all new store openings under the name Pizza Dispatch. But 1980 brought a positive conclusion to the lawsuit, with the company being permitted once again to operate under its long-established identity of Dominos Pizza. The company ended that year with 398 stores recording $98 million in sales. Franchising also continued to grow. In fact, by this time, most of the companys growth came from its strong franchise base, and the majority of the franchisees were from the internal ranks. Opportunity kept the Dominos Pizza team motivated and highly productive. There was something big waiting for everybody who was willing to work for it. Monaghan often referred to his franchisees as the very heart of the company and time and time again they have proven this to be true. With their energy, dedication and financial investment, they would help bring Dominos Pizza to a level of success beyond what Monaghan had ever imagined possible. The 80s In 1983 the company celebrated the opening of its first international store in Winnipeg, Canada. Dominos Pizza International, which Monaghan called the companys hope for the future, became in part responsible for much of the companys later movement and growth. 1983 also saw the opening of the companys 1000th store in Colorado Springs, Colorado. After a quarter of a century of honing its pizza making and delivery systems, Dominos Pizza knew the pizza delivery business. In 1985 tens of thousands of customers around the world showed their confidence in the company by ordering 135 million pizzas during that year, an astonishing 69% increase over the previous years sales. By 1989 Dominos had opened its 5000th store. The 90s By 1992 the international division had opened its 500th store outside the United States. The domestic market continued to grow with the introduction of innovative variations to the original pizza recipe as well as creative up-sell items. 1993 was shaping up as another major year for Dominos until December brought one more crisis: a $79 million judgment against the company in a lawsuit alleging the 30 minute guarantee was at fault in a St Louis traffic accident. After days of soul-searching, Monaghan decided to withdraw the guarantee permanently, a move that made headlines worldwide such was Dominos renown. Not only is Monaghan credited with pioneering the multi-billion dollar pizza delivery industry, but also with numerous inventions. He is responsible for the corrugated pizza box, conveyor ovens, and Doug mixers, insulated bags to transport pizzas in, the pizza screen, Doug trays and, most important to the success of his own business, a unique franchising system enabling managers a nd supervisors to become independent business owners. In 1999 Monaghan, a deeply spiritual man, decided it was time to give back to the community much of the wealth he had accumulated as a result of his 39 years at the helm of this great company. So he sold Dominos Pizza to Bain Capital, an organization with a proven track record of identifying companies with significant growth potential, and steering them to achieve that potential. The Future Many changes have been made since Dominos was sold to Bain Capital, and a new spirit of excitement has paved the way for the future. Despite encountering setbacks and obstacles along the way, the story of Tom Monaghans 39 years at the helm of Dominos Pizza is one of never giving up on your dreams. What began as one mans vision evolved into a thriving worldwide industry? Dominos Pizza India Limited Dominos Pizza India Limited (DPIL) is the master franchisee for India, Srilanka , Bangladesh and Nepal from Dominos Pizza International Inc., USA. The company had been promoted by Mr. Shyam S. Bhartia and Mr. Hari S.Bhartia of the Jubilant Organosys Group (Formally Vam Organic Group). The Company was incorporated in March 1995. The First Dominos Pizza store in India was opened in January 1996, at New Delhi and today after nine years Dominos Pizza India has grown into a countrywide network of over 100 outlets in 27 cities, which includes:- North Delhi, Gurgaon, Chandigarh, Ludhiana, Amritsar, Jallandhar, Dehradun, Shimla, Agra, Kanpur, Lucknow, Noida, Faridabad, Mussoorie South Chennai, Bangalore, Hyderabad, Coimbotore, Mangalore, Cochin, Secundrabad, Manipal, East Kolkatta West Mumbai, Pune, Ahmedabad, Goa Dominos intends to penetrate completely within these markets by opening up 20-25 outlets per year in these cities. Dominos has a young and enthusiastic team of over 2,100 employees. Today, Dominos has emerged as the leader in the fast food segment with about 65% of market share of pizza delivery in India and have outlets more than any other corporation in the business of food, not just the pizza business. All the Company outlets are corporate outlets invested by the company and also managed by the company. Over a period since 1996, Dominos Pizza India has established a reputation for being a home delivery specialist capable of delivering its pizzas within 30 minutes to its community of loyal customers from its entire stores around the country. Customers can order their pizzas by calling the single countrywide Hunger Helpline 1600-111-123 and Dominos was the first one to start this facility for its customers. Dominos vision is Exceptional people on a mission, to be the best pizza delivery company in the world!. Dominos is committed to bringing fun and excitement to the lives of our customers by delivering delicious pizzas to their doorstep in 30 minutes or less, and all our strategies work for fulfilling this commitment towards our large and ever-growing customer base. Dominos constantly strives to develop the product that suits the taste of its customers to bring out the WOW effect (i.e. the feel good factor). Dominos believes in the strategy of Think local and act regional that is blended with a playful image personified by our Hungry Kya? positioning. Thus, time and again Dominos has been innovating toppings, suitable to the tastebuds of the locals and these have been very well accepted by the Indian market, are doing extensively well in the market. We are constantly in the process of innovating further; we introduce new topping every 3 -4 months Dominos understands customers demand and is constantly developing local flavors understanding the local sentiments. Also, the ingredients, sauces etc. are made keeping in mind the taste buds of Indian consumers while retaining the international flavor. Dominos constantly strive to make the company an integral part of the lives of the target audiences by getting involved with the clientele at the emotional level and building long-term relationship with them. Thus, Dominos concentrate more on carrying out below-the-line activities in the area it serves. Dominos believe in bringing fun and excitement into the lives of our clientele. We take our delivery proposition very seriously and our entire corporate ethic is based on it. Dominos is the recognized world leader in Pizza delivery. But it isnt just about delivering; its also about giving back to the community. Dominos believes that an essential component of corporate responsibility is to provide support to charitable organizations that benefit the communities where its employees and customers work and live. Dominos worldwide is known for its commitment toward social causes and believes in adding fun to the lives of our customers and communities it serves. In India, Dominos has been associated with the NGOs devoted to the cause of underprivileged Childrens. Dominos conducts Store Educational Tour (SET) for the underprivileged children time-to-time. Recently this was done in the one of the Dominos outlet in Delhi and Mumbai with the underprivileged children from CRY (Child Relief and You) where Dominos took the pledge to provide part-time employment to the eligible wards from CRY who are above 18 years, reiterating its commitment towards social causes. Also, fifty- percent of that days first 20 deliveries of the store were given to CRY toward the cause of the underprivileged children. The children had a gala time while they learned to make and bake pizzas at the store and finally tasted the sumptuous offerings made by them during the Store Educational Tour. Dominos Pizza India also boasts about its commitment to serve its customers on time by implementing the 30 MINUTES OR FREE service commitment, they have been able to achieve this as a result of continuous efforts and dedication of the entire team in improving operating efficiencies. Dominos Pizza India has been consistently rated amongst the top 2 pizza chains worldwide in the Dominos family by Dominos International, in terms of quality of operations. Our pizza delivery times have also been judged as the best delivery times in the world across all Dominos. PIZZA HUT INDIA Background Pizza Hut entered India in 1996, and opened its first restaurant in Bangalore. Since then it has captured a dominant and significant share of the pizza market and has maintained an impressive growth rate of over 40 per cent per annum. Pizza Hut now has 95 outlets across 24 cities in India; and employed nearly 4,000 people by end of 2004. Yum! has invested about US$ 25 million in India so far; this is over and above investments made by franchisees. Yum! Brands Inc is the owner of the Pizza Hut chain worldwide. A Fortune 300 company, Yum! Brands own Kentucky Fried Chicken, Pizza Hut, Taco Bell, AW and Long John Silvers restaurants worldwide. Yum! Generated more than US$ 25.9 billion in worldwide sales in the year 2003, and has more than 33,000 restaurants in over 100 countries. A major player in the Indian fast food and beverage sector Market share Pizza Hut is believed to have close to 50 per cent market share of the organized pizza-retailing segment in India. Financial performance According to an article in Financial Express, the market size of the pizza segment is around US$ 87 million and currently growing at the rate of 15 per cent to 17 per cent per annum. According to Pizza Hut sources, most of their outlets are financially successful, encouraging further expansion. In India, the average investment for each outlet is US$ 275,000-335,000 and is borne by the franchisee. Factors for Success Offering value food Employing economies of scale, Pizza Hut has made its offerings more affordable. Its delivery offer of US$ 4.4 for four personal pan pizzas has been very successful; helping it grows the business by 25 per cent. They have recently introduced a range of vegetarian personal pan pizzas for US$ 1.1. Most Pizza Hut restaurants are located in the metros and smaller metros. In taking long strides across the country, Pizza Hut is consolidating its position by opening more restaurants in the metros where it already has a presence as well as opening outlets in new markets. Moving beyond metros According to company sources, Pizza Hut is moving beyond the metros and foraying into 12 to 13 new markets including Trichy, Nagpur, Bhubhaneswar, Thiruvananthapuram and Pondicherry to increase penetration. Aggressive marketing and tie-ups with local and popular brands Pizza Hut has increased its visibility by launching a well-received TV campaign aimed at the young crowd. It has formed partnerships with recognized brands such as Nestle and Pepsi. It also holds regular promotional campaigns targeted at children and uses these alliances to offer packages during these campaigns. Developing the local supply chain The local supply chain for Pizza Hut was developed by Yum! and currently 95 per cent of the ingredients they use are locally produced. They now import very few specialty items like pepperoni. Leveraging the India Advantage : International brand with an Indian heart Pizza Hut is one of the first international pizza chains with purely vegetarian dine-ins at Chowpatty (Mumbai), Ahmedabad and Surat, which also serve Jain menus. Pizza Hut has even opened two all-vegetarian restaurants in the western state of Gujarat to cater to the Jain religious community, whose members prefer not to eat at places where meat is served. Offering more than the international menu International food chains typically offer only a few localised products in other parts of the world. However, Pizza Huts local menu is as large as the international one. According to Pizza Hut, the Indian food heritage is very rich, and hence Indians like local flavours. The Tandoori range of pizzas, which was developed locally, has a menu mix of over 20 per cent. Indigenous sourcing of raw materials Pizza Hut has reduced costs through indigenous sourcing of raw material. It has tied up with a local company Dynamix Dairy Industries Ltd (DDIL) for sourcing mozzarella cheese. The landed cost of imported mozzarella comes to US$ 3.3 3.5 per kilogram. The domestic price, however, works out to US$ 2.99 3.1 per kilogram. Pizza Hut is adding to the bottom line by localising equipment as well as by paying attention to inventory replenishment, which has been reduced from 60 to 30 days. Future plans According to Yum! Restaurants International, India is amongst the top five growth markets for Pizza Hut. Pizza Hut is also experiencing double-digit growth in India and hence is confident about expanding its operations in India. Pizza Hut hopes to increase the number of Pizza Hut outlets in India to 180 by the end of 2008 from the present figure of 130. The expansion programmed will make Pizza Hut the fastest growing western restaurant chain in India. In addition, Yum! plans Pizza Hut to be in 42 cities by end of 2007, and 55 cities by end of 2008. Conclusions: Keeping up the sentiments of Indian customers and services offered by Pizza-houses and Keeping our study focused on some of the key -areas of sensitivity of customers preferences (analysis of factors which affects the preferences). We come to a conclusion that : Pizza -hut is preferred() over dominos in terms of Varity of Pizzas Good ambience Services offered Quality of pizzas Location of the Outlet Waiting time in the outlet Dominos is being preferred over pizza-hut in terms of: Door step services Low pricing So we can say that due to these qualities Pizza-hut dominates Dominos -pizza In different areas and capture the market share and gain rapidly. Recommendations For Dominos Increase varieties in Pizzas. Focus on location of the outlets. Increase the quality of Pizzas Make good ambiance in outlets Should focus more on market zing itself confidently. For Pizza-Hut Try to attract more number of Ladies customers. Should focus on Low price customers. Make the door step services better

A Hierarchical Regression Analysis Psychology Essay

A Hierarchical Regression Analysis Psychology Essay This study was conducted to determine what the predictors of Body Mass Index are. There were two research questions of this study. First research question was How well the type of chocolate and frequency of chocolate consumption predict body mass index, after controlling for gender physical activity? Second research question was How well do fat percentage and cacao percentage in chocolate explain body mass index, after controlling the results of the first research question? In order to reveal the predictors hierarchical regression analysis was used. In this study BMI was outcome variable; gender, type of chocolate, fat rate in chocolate, cocoa rate in chocolate, frequency of chocolate consumption and frequency of physical activity in a week were predictor variables. The study was conducted with 600 university students. Method Participants and the Variables The sample of the study was consisted of 600 Middle East Technical University students; 46.3% (n=278) were male and 53.7% (n=322) were female. Convenience sampling method was used to determine the participants. The most crowded places of the university, such as library, market area, dormitory area, were selected as data collection areas. Requisite sample size for multiple regression could be calculated with the formula of number of predictors * 8 + 50. According to formula required sample size is 106 (7*8+50). While there are 600 students, sample size is quite enough to conduct multiple regression. The questionnaire used in this study was consisted of seven items which are presented in Table 1. Moreover, there is an id number for each participant. Totally, there were six continuous and two categorical variables on data file. Table 1 List of variables and brief descriptions in the data file Variable Name Description of the variable Id Identity number of each participant BMI Body Mass Index Gender Gender (1: Male; 2: Female) Type Type of chocolate ( 1: Milk; 2: Berry; 3: Peanut) Fat Fat rate (%) in chocolate Cacao Cacao rate (%)in chocolate Frequency Frequency of chocolate consumption (number of chocolates eaten in the last week) Activity Frequency of physical activity in a week Data Analysis Plan In this study hierarchical regression will be held to find out how much the predictors can explain the dependent variable, BMI. In hierarchical regression different models are tested sequentially. In contrast to stepwise regression, researcher decides the sequence of the predictors that included the model. Three different models will be used to determine how much these independent variables predict the dependent variable. In the first model gender and frequency of physical activity in a week will be included into analysis. In the second model, gender and frequency of physical activity in a week will be controlled; type of chocolate and frequency of chocolate consumption will be included into analysis. In the third model, gender, frequency of physical activity in a week, type of chocolate and frequency of chocolate consumption will be controlled, fat percentage and cacao percentage in chocolate will be included into analysis. To conduct the regression analysis, categorical data should be recoded. There are three different ways to do this; dummy coding, effects coding and contrast coding. In this study, dummy coding will be used to recode categorical data. In dummy coding, one categorical variable recode into different variables that the number of new variables are one less than the number of categories. Nevertheless, a categorical variable should have at least three levels to be recoded. A categorical variable with two levels such as gender neednt to be recoded. In this study there were two categorical data; gender and type of chocolate. As it mentioned before, gender neednt to be recoded. The other categorical variable, type of chocolate, should be recoded. Milk chocolate will be selected as reference variable; and, two other variables will be coded as milkvsberry and milkvspeanut. Likewise all other multivariate statistical methods, Multiple Regression has various assumptions; and, all these assumptions should be checked before conducting the analysis. First assumption of multiple regression is normality. Unlike other multivariate analysis, regression analysis checks whether the error distributes normally or not. Secondly, multicollinearity, which is high level of intercorrelation among predictor variables, should be checked. Thirdly, assumption of homoscedasticity should be checked. Homoscedasticity assumes that the variance of the error term is constant across each value of the predictor. This means that there should not be seen a pattern on scatter plot. Fourth assumption is independence, that the error term is independent of the predictors in the model and of the values of the error term for other cases. The fifth assumption of multiple regression is linearity. Lastly, outliers should be check whether they affect the results or not. Partial plots, leverage statistics, Cooks D, DFBeta and Mahalonobis distance could be used to determine outliers. Results Descriptive Statistics Table 2 shows the descriptive statistics of the study. Table 2 shows that there is no missing data; mean of dependent variable, BMI, is 24.65 and the standard deviation is 4.48. Table 2 Descriptive Statistics Mean Std. Deviation N body mass index 24.65 4.48 600 Gender 1.54 .50 600 physical activity in a week 2.62 .74 600 milk chocolate vs berry chocolate .25 .44 600 milk chocolate vs peanut chocolate .27 .45 600 frequency of chocolate consumption 4.66 .73 600 fat rate (%) in chocolate 51.70 9.69 600 cacao rate (%) in chocolate 51.95 9.96 600 Table 3 shows the correlations between the variables. If the table is examine it is seen that the best predictor of BMI is fat rate in chocolate. There is a positive and high correlation between the BMI and fat rate in chocolate. On the other hand, there is no correlation between BMI and gender, physical activity in a week, milk chocolate vs berry chocolate. Moreover, there is no correlation higher than .90 between the independent variables. Table 3 Correlation Matrix 1 2 3 4 5 6 7 8 Pearson Correlation body mass index (1) 1.00 Gender (2) -.03 1.00 physical activity in a week (3) .04 -.13 1.00 milk chocolate vs berry chocolate (4) -.03 .03 -.11 1.00 milk chocolate vs peanut chocolate (5) .23 -.02 .12 -.36 1.00 frequency of chocolate (6) consumption .31 .12 .15 -.05 .19 1.00 fat rate (%) in chocolate (7) .64 -.12 .08 .02 .21 .30 1.00 cacao rate (%) in chocolate (8) .52 .08 .03 -.04 .22 .28 .51 1.00 Assumptions The first assumption of multiple regression to be checked is normality. Unlike other analysis, normality of residuals is checked whether errors normally distributed or not. Normality of residuals could be checked via two different ways; histogram and P-P plot. Figure 1 shows the histogram of regression standardized residuals. The histogram shows that there is a normal distribution of residuals. The frequency distribution of residuals is close to normal distribution line. Moreover, figure 2 shows the P-P plot of regression standardized residuals and it shows that distribution of errors is normal. It can be said that first assumption of multiple regression, normality, is not violated. Figure 1 Histogram of Regression Standardized Residual Figure 2 P-P Plot of Regression Standardized Residual The second assumption of multiple regression to be checked is multicollinearity. Multicollinearity could be checked with correlation matrix, VIF or tolerance values. There should not be any correlation that is higher than .90 between two independent variables. When the correlation matrix (Table 3) is examined there is no correlation higher than .90 between two independent variables. Table 4 shows the collinearity statistics of all three models. VIF values more than four or tolerance values higher than .20 are indicators of multicollinearity. Table 4 shows that there is no VIF value higher than four or tolerance value higher than .20. So, assumption of multicollinearity is not violated. Table 4 Collinearity Statistics Model Collinearity Statistics Tolerance VIF 1 (Constant) Gender .98 1.02 physical activity in a week .98 1.02 2 (Constant) Gender .96 1.04 physical activity in a week .94 1.06 milk chocolate vs berry chocolate .87 1.15 milk chocolate vs peanut chocolate .84 1.19 frequency of chocolate consumption .93 1.08 3 (Constant) Gender .92 1.08 physical activity in a week .94 1.06 milk chocolate vs berry chocolate .86 1.17 milk chocolate vs peanut chocolate .80 1.24 frequency of chocolate consumption .84 1.19 fat rate (%) in chocolate .67 1.49 cacao rate (%) in chocolate .70 1.43 The third assumption of multiple regression to be checked is homoscedasticity. Scatter plot of predicted value and residual is used to control homoscedasticity. Any pattern should not be seen on the scatter plot. Figure 4 shows that there is no pattern on the scatter plot; so, there is not homoscedasticity. Figure 4 Scatter plot of predicted value and residual The fourth assumption of multiple regression to be checked is independence. Independence is affected by the order of the independent variables and can be ignored if the order of independent variables is not important. Order of the independent variables is important in this study; so, independence should be checked in this study. Independence is checked with Durbin-Watson value that should be between 1.5 and 2.5. Durbin-Watson value of the model is 1.88; so, independence assumption is not violated. The last assumption of multiple regression is linearity. We assume that linearity is not violated in this study. Influential Observations Data should be checked whether there are outliers or not. Outliers could cause misleading results. There are different ways of checking outliers in multiple regression such as Partial plots, leverage statistics, Cooks D, DFBeta and Mahalonobis distance. Each method uses a different calculation method; so, multiple methods should be used and then make a decision whether a data is outlier or not. At first, partial plots of the dependent variable with each of the independent variable is examined (see on figure 5,6,7,8 and 9). Some cases that could be outliers are seen on each partial plot; but, this should not be forgotten, making decision over partial plots is a subjective way and other ways of controlling outliers should be used. A decision could be made even after all methods were conducted. Figure 5 Partial Plot of BMI and physical activity in a week Figure 6 Partial Plot of BMI and milk chocolate vs peanut chocolate Figure 7 Partial Plot of BMI and frequency of chocolate consumption Figure 8 Partial Plot of BMI and fat rate in chocolate Figure 9 Partial Plot of BMI and cacao rate in chocolate After controlling partial plots, leverage value could be controlled to identify the outliers. It is seen that there is no case, leverage value of which is higher than .50. According to leverage test results there is no outlier. Table 5 Extreme Values of Leverage Test Case Number Value Centered Leverage Value Highest 1 448 .04 2 384 .04 3 141 .03 4 324 .03 5 592 .03 Lowest 1 196 .00 2 103 .00 3 535 .05 4 160 .05 5 8 .05 After controlling leverage values, Cooks distance could be controlled. In Cooks Distance, a value greater than the value, calculated with the formula of mean + 2 * standard deviation, can be admitted as outlier. In this study critical value is .008 (.002+2*(.003)). Maximum value of Cooks distance is .03; so, it is expected that there will be outliers. Boxplot of Cooks distance (figure 10) shows that the cases 499, 438, 449, 236, 284, 484, 37, 354, 137, 97, 324 and 165 could be outliers. On the other hand, according to Cook and Weisberg (1982) values greater than 1 could be admitted as outlier. So, it can be assumed that there is no outlier. Figure 10 Boxplot of Cooks distance After controlling Cooks Distance, DF Beta values of each independent variable could be checked. DF Beta value shows the change in regression coefficient due to deletion of that row with outlier. According to Field (2009) a case can be outlier if absolute value of DF Beta is higher than one. According to Stevens (2002) a case can be outlier if absolute value of DF Beta is higher than two. In this study there is no case that has DF Beta value higher than one (see figure 11). According to DF Beta test values there is no outlier in this study. Figure 11 Boxplots of DF Beta values of Independent Variables Lastly, Mahalanobis Distance could be controlled to identify the outliers. If there is any case that is greater than the value of chi square at ÃŽÂ ±=.001 that could be admitted as outlier. The critical value at ÃŽÂ ±=.001 with seven predictors is 24.32. Table 6 shows the extreme values for this study and there is no value greater than 24.32. According to Mahalanobis distance test there is no outlier. Table 6 Extreme Values of Mahalanobis Distance Case Number Value Mahalanobis Distance Highest 1 448 23.72 2 384 20.90 3 141 20.50 4 324 19.15 5 592 17.99 Lowest 1 196 2.62 2 103 2.62 3 535 2.78 4 160 2.78 5 8 2.78 If the results of each test is summarized; Partial plots shows that there could be outliers, Leverage values show that there is no outliers, Cooks distance values show that there is no outlier, DF Beta values show that there is no outlier. According to results of the tests, it could be assumed that there is no outlier. Regression Results A hierarchical regression analysis was conducted to identify the predictors of BMI. Three different models were examined to understand which predictor explains has how much variance. Table 7 shows the summary of three models. Among three models, the first model is not statistically significant; the second and third models are significant. In the first model; gender and physical activity in a week were the predictors. This model explains the .2% of total variance, but insignificant; F (2, 597) = .67; p > .05. In the second model, milk chocolate vs berry chocolate, milk chocolate vs peanut chocolate and frequency of chocolate consumption are the predictors after controlling for the effect of gender and physical activity in a week. This model explains 13% of total variance explained significantly, F (3, 594) = 28.901; p In the third model, cacao rate (%) in chocolate, fat rate (%) in chocolate are the predictors of BMI after controlling for the effect of gender, physical activity in a week, milk chocolate vs berry chocolate, milk chocolate vs peanut chocolate and frequency of chocolate consumption. This model explains 34% of total variance explained significantly, F (2, 592) = 189.154, p Table 7 Regression Analysis Model Summary Model R R2 Change Statistics Durbin-Watson ΆR2 ΆF df1 df2 Ά Sig. F 1 .05a .00 .00 .69 2 597 .50 2 .36b .13 .13 28.90 3 594 .00 3 .69c .47 .34 189.15 2 592 .00 1.879 a. Predictors: (Constant), physical activity in a week, gender b. Predictors: (Constant), physical activity in a week, gender, milk chocolate vs berry chocolate, frequency of chocolate consumption, milk chocolate vs peanut chocolate c. Predictors: (Constant), physical activity in a week, gender, milk chocolate vs berry chocolate, frequency of chocolate consumption, milk chocolate vs peanut chocolate, cacao rate (%) in chocolate, fat rate (%) in chocolate d. Dependent Variable: body mass index Table 8 shows the Coefficients of Hierarchical Regression Analysis that shows the significance and total variance explained by each predictor. In the first model any of the predictors significantly predicts the dependent variable, BMI. It can be said that neither the model, nor the predictors are statistically significant and do not predict the outcome variable, F (2, 597) = .67; p > .05. In the second model, overall model is significant, F (3, 594) = 28.901; p In the third model, overall model is significant, F (2, 592) = 189.154, p Table 8 Coefficients of Hierarchical Regression Analysis Model Unstandardized Coefficients Standardized Coefficients t p Correlations B Std. Error Beta Part 1 (Constant) 24.419 .941 25.938 .000 Gender -.232 .370 -.026 -.628 .530 -.026 physical activity in a week .226 .251 .037 .900 .369 .037 2 (Constant) 17.165 1.309 13.110 .000 milk chocolate vs berry chocolate .539 .423 .052 1.273 .204 .049 milk chocolate vs peanut chocolate 1.943 .420 .193 4.629 .000 .177 frequency of chocolate consumption 1.751 .245 .283 7.135 .000 .273 3 (Constant) 5.426 1.191 4.557 .000 fat rate (%) in chocolate .221 .017 .477 13.033 .000 .390 cacao rate (%) in chocolate .109 .016 .242 6.766 .000 .203 a. Dependent Variable: body mass index Discussion Two different research questions were tried to be answered in this study. First research question was How well the type of chocolate and frequency of chocolate consumption predict body mass index, after controlling for gender physical activity?. Second research question was How well do fat percentage and cacao percentage in chocolate explain body mass index, after controlling the results of the first research question?. A hierarchical regression analysis was conducted to answer the research questions. Three models were examined to find the predictors and their contribution to these models. The first model that examines that how well gender and physical activity in a week predict the dependent variable. Result of the first model shows that neither model nor predictors significantly predict the BMI. The second model examined to answer the first research question. This model predicts 13% of total variance explained. Milk chocolate vs berry chocolate does not significantly explain the BMI. Milk chocolate vs peanut chocolate explains 3%, frequency of chocolate consumption explains 7% of total variance explained. The third model examined to answer the second research question. This model predicts 47% of total variance explained and 34% of total variance explained uniquely. Fat rate in chocolate explains 15% and cacao rate in chocolate explains 4% of total variance uniquely. When all models were examined it is seen that fat rate in chocolate is the best predictor of BMI by explaining 15% of total variance explained. Frequency of chocolate consumption is the second by explaining 7% of total variance explained. Cacao rate is the third predictor by explaining 4% of total variance explained.

Anti-Depressants and Teen Suicide Essay -- Teenage Suicide Essays

Abstract Two percent of preteens and five percent of adolescents suffer from depression (www.about-teen-depression.com 2014). There are specific signs and symptoms associated with depression, which are helpful in detection of the illness. There are various ways to treat depression, such as medication, group therapy, and/or herbal supplements. There are pros and cons with each treatment, but the worst coincides with the medication –suicide. Much research has been conducted, which will be discussed in the paper that has shown a link to antidepressants and suicide. However, there is also evidence that the suicide rate could be decreased with proper diagnosis and early, supervised treatment for depression, especially when dealing with children and adolescents. Introduction Depression is the newest epidemic sweeping across the world, affecting adults, teenagers, and even children. In fact, surveys have indicated that one in every five teenagers suffer from clinical depression (NMHA 2004). The illness can be found anywhere and appears to make the news each and every day. Depression is a condition that has no preference in its victims, meaning that it will strike people of all ages, races, and backgrounds. However, research has indicated that the onset of depression is now occurring earlier in life compared to past decades (Klerman and Weissman 1989). Knowing this, depression is a condition that needs to be cured immediately. There are many signs and symptoms commonly associated with depression, although most do vary with each individual. Most symptoms include frequent sadness, feelings of hopelessness, decreased activity, persistent boredom and low energy, social isolation, low self esteem, extreme sensitivity, frequents complaints of illness, poor concentration, and thoughts or expression of suicide (www.focusas.com). In order to be diagnosed as suffering from depression, patients must have 2 or more of the above symptoms for at least two weeks that cause severe distress or interfere with daily life (Zoloft 2001). The specific causes of depression are not known. It is suggested that depression is actually a result of a combination of certain factors, such as biological and psychosocial factors (Kendler 1995, www.surgeongeneral.gov 2004). Most likely, depression is the result of a chemical imbalance of neurotransmitters in the brain (NYU 2004). Thes... ...ent of pharmacotherapies for clinical depression in children and adolescents. Drug Safety. Jan; 20 (1):59-75. Shaffer D, Craft L. 1999. Methods of Adolescent Suicide Prevention. Journal of Clinical Psychiatry. 60: 70-74. Simon H and Stern T. 2003 – Review. Harvard Medical School. Strober M, Schmidt-Lackner S, Freeman R et al. 1995. Recovery and relapse in adolescents with bipolar affective illness: a five-year naturalistic, prospective follow-up. J Am Acad Child Adolesc Psychiatry 34(6):724-731. Sullivan, P., Neale, M. C. & Kendler, K. S. 2000. Genetic epidemiology of major depression: review and meta-analysis. American Journal of Psychiatry. 157: 1552-1562. Vanderkooy JD, Kennedy SH, Bagby RM. 2002. Antidepressant side effects in depression patients treated in a naturalistic setting. The Canadian Journal of Psychiatry. 47: 174-180. Wagner KD, Ambrosini P, Rynn M, et al. 2003. Efficacy of sertraline in the treatment of children and adolescents with major depressive disorder. JAMA. 290: 1033-1041. Whittington CJ et al. 2004. Selective Serotonin Reuptake Inhibitors in childhood depression. Lancel. 363: 1341-1345. Zoloft. 2004. . [accessed 21 September 2004].

Rainy Mountain :: Essays Papers

Rainy Mountain Summary of â€Å" The Way To Rainy Mountain â€Å" ( Momaday p. 430 ) Momaday, tells the story of his grandmother and how she evolved from a land of her ancestry. She, being one of the few â€Å"belonging to the last culture to evolve in North America† (431). In a descriptive detail, Momaday, portraits the events that takes us on a journey through time before our modernized society had come into existence. A time of survival, rituals, suffering, and extinction. He starts out by setting the scenery of the place where his grandmother lived. A somewhat rigid area of the Southern Plains, where the seasons were of raging intensity. A place in time occupied by his grandmothers people, the Kiowas. A very â€Å"lordly and dangerous society of fighters and thieves, hunters and priest of the sun† (431). They had descended down out of Montana, and â€Å"war was their sacred business, and they were the finest ho rseman the world has ever known† (430). But as time had evolved into the migration of civilization, her people were forced to surrender their way of life to the soldiers. Fortunately, this was before her time. Momadays grandmother, Aho, lived an eventful life amongst her people, bearing stories of her participation in one of the last rituals of the sun-dance, which was interrupted by the soldiers.

Manufacturing the Wonder Cab

We have been Informed that they are the ones who manufactured the wonder cab that Is much known to us as the three wheels cab. All materials needed for manufacturing vehicles are Imported from other countries Like Japan . Based on the accepted practice of other Aslant countries, after 4-5 years of usage of vehicles. Owners are obliged to replace their old with new ones.Given this scenario, he company imports them and makes some overhauling to come up with their product. Not all are second hand because they are also importing surplus but majority came from secondhand vehicles. All engines are subject to check up to assess the overhauling that must be done. Also, spare parts came from the country where the engine was made. There are three types of vehicles. These are the if. : commercial mini vans, serial types and the special units. Price ranges from PH 250,000 to PH 270,000. For special orders, a minimum of 50 units must be ordered.The parts assembly is the first stage in the prepara tion section. Here, wheels are attached to the engine body and subsequently aligned before engine overhauling. After that, these are checked by machinists for the body fabrication which includes painting, completion of necessary parts and its accessories. Final testing is done by the quality control department per finished product to maintain the quality of manufactured vehicles. Actually, the manufacturing of their product does not require so much labor because the people working there would not exceed.

Inflation Is Assumed

Inflation is assumed Chapter 1 True / False Questions 1. Inflation is assumed to be a temporary problem that does not affect financial decisions. FALSE 2. Financial Capital is composed of long-term plant and equipment, as well as other tangible investments. FALSE 3. Real Capital is composed of long-term plant and equipment. TRUE 4. During the 1930s, financial practice revolved around such topics as the preservation of capital, maintenance of liquidity, reorganization of financially troubled corporations and bankruptcy. TRUE 5. In the mid 1950s, finance began to change to a more analytical, decision-oriented approach.TRUE 6. Recently, the emphasis of financial management has been on the relationship between risk and return. TRUE 7. The most common partnership arrangement carries limited liability to the partners. FALSE 8. In terms of revenues and profits, the corporation is by far the most important form of business organization in the United States. TRUE 9. Dividends paid to corporat e stockholders have already been taxed once as corporate income. TRUE 10. One advantage of the corporate form of organization is that income received by stockholders is not taxable since the corporation already paid taxes on the income distributed.FALSE 11. A corporation must have more than 75 stockholders to qualify for Subchapter S designation. FALSE 12. Profits of a Subchapter S corporation are taxed at corporate tax rates. FALSE 13. Corporate governance issues have become less important to the financial community during the first decade of the new millennium. FALSE 14. Agency Theory examines the relationship between companies and their customers. FALSE 15. A major focus of the Sarbanes Oxley Act is to make sure that publicly traded companies accurately present their assets, liabilities and income in their financial statements.TRUE 16. The Sarbanes Oxley Act is primarily intended to increase public scrutiny of private companies that had previously been exempt from many public dis closure requirements. FALSE 17. Timing is not a particularly important consideration in financial decisions. FALSE 18. Maximizing the earnings of the firm is the goal of financial management. FALSE 19. Insider trading involves the use of information not available to the general public to make profits from trading in a company's stock. TRUE 20.Financial markets exist as a vast global network of individuals and financial institutions that may be lenders, borrowers, or owners of public companies worldwide. TRUE 21. Money markets refer to those markets dealing with short-term securities having a life of one year or less. TRUE 22. Money markets refer to markets where excess corporate cash is exchanged for foreign currencies that can earn a higher return than domestic money. FALSE 23. Capital markets refer to those markets dealing with short-term securities having a life of one year or less. FALSE 24. The primary market includes the sale of securities by way of initial public offerings.TR UE 25. High quality initial public offerings are usually sold in a primary market, such as the New York Stock Exchange. However, low-quality stocks must usually be sold in secondary markets, such as NASDAQ. FALSE 26. Although NASDAQ is a secondary market, some of the firms traded there, such as Microsoft, are large enough to move to the primary market if they so desire. FALSE 27. The secondary market characteristically has had stable prices over the past 20 years. FALSE 28. In the United States, stocks sold on either the New York Stock Exchange or NASDAQ are considered sold in the primary market.FALSE 29. New issues are sold in the secondary market. FALSE 30. Existing securities are traded in the secondary market. TRUE 31. Many companies have cross-listed their stock on multiple international stock exchanges and more than several hundred foreign companies have listed their shares on the New York Stock Exchange. TRUE 32. Financial management requires both short-term activities as wel l as long-term planning such as raising funds. TRUE Multiple Choice Questions 33. What is the primary goal of financial management? A. Increased earnings B. Maximizing cash flow C. Maximizing shareholder wealthD. Minimizing risk of the firm 34. In the past, the study of finance has included A. mergers and acquisitions. B. raising capital. C. bankruptcy. D. all of these. 35. Professor Merton Miller received the Nobel prize in economics for his work on   A. dividend policy. B. investment theory. C. working capital management. D. capital structure theory. 36. Professors Harry Markowitz and William Sharpe received their Nobel prize in economics for their contributions to the   A. options pricing model. B. theories of working capital management. C. theories of risk-return and portfolio theory. D. heories of international capital budgeting. 37. Proper risk-return management means that A. the firm should take as few risks as possible. B. the firm must determine an appropriate trade-off between risk and return. C. the firm should earn the highest return possible. D. the firm should value future profits more highly than current profits. 38. One of the major disadvantages of a sole proprietorship is   A. that there is unlimited liability to the owner. B. the simplicity of decision making. C. low organizational costs. D. low operating costs. 39. One of the major advantages of a sole proprietorship is   A. hat the owner has limited liability. B. that stock in the proprietorship can be easily transferred. C. that it is exempt from many tax rules that would otherwise apply when employees are hired by the firm. D. low operating costs. 40. The partnership form of an organization A. avoids the double taxation of earnings and dividends found in the corporate form of organization. B. usually provides limited liability to the partners. C. has unlimited life. D. simplifies decision making. 41. A corporation is A. owned by stockholders who enjoy the privilege of limited lia bility. B. easily divisible between owners.C. a separate legal entity with perpetual life. D. all of these. 42. With a Subchapter S corporation A. income is taxed as direct income to stockholders. B. stockholders have the same liability as members of a partnership. C. the number of stockholders is unlimited. D. life of the corporation is limited. 43. A Subchapter S corporation A. is similar to a partnership in that is carries unlimited liability. B. is a separate legal entity which is treated like a normal corporation. C. has all the organizational benefits of a corporation and its income is only taxed once. D. all of these. 44.Corporate governance is the A. relationship and exercise of oversight by the board of directors of the company. B. relationship between the chief financial officer and institutional investors. C. operation of a company by the chief executive officer (CEO) and other senior executives on the management team. D. governance of the company by the board of director s with a focus on social responsibility. 45. Many companies such as Tyco, Enron, and WorldCom that suffered financial distress in the late 1990s and early 2000s,   A. committed fraud. B. had failed corporate governance oversight. C. went bankrupt. D. ll of these are true. 46. Agency theory examines the relationship between the A. shareholders of the firm and the firm's investment banker. B. owners of the firm and the managers of the firm. C. board of directors and large institutional investors. D. shareholders and the firm's transfer agent. 47. Agency theory would imply that conflicts are more likely to occur between management and shareholders when   A. the company is owned and operated by the same person. B. management acts in the best interests of maximizing shareholder wealth. C. the chairman of the board is also the chief executive officer (CEO). D. he board of directors exerts strong and involved oversight of management. 48. Agency problems are least likely to arise in whi ch organizational form? A. sole proprietorship B. limited partnership C. corporation D. subchapter S corporation 49. Institutional investors are important in today's business world because   A. as large investors they have more say in how businesses are managed. B. they have a fiduciary responsibility to the workers and investors that they represent to see that the firms they own are managed in an ethical way. C. as a group they can vote large blocks of stock for the election of board members.D. all of these. 50. The increasing percentage ownership of public corporations by institutional investors has   A. had no effect on corporate management. B. created higher returns for the stock market in general. C. created more pressure on public companies to manage their firms more efficiently. D. taken away the voice of the individual investor. 51. The Sarbanes-Oxley Act was passed in an effort to A. protect small business from large corporations dominating the market. B. ensure that pa rtnerships divide profits among partners in a fair manner. C. guarantee outside auditors can control corporate accounting practices.D. control corrupt corporate behavior. 52. Maximization of shareholder wealth is a concept in which   A. increased earnings is of primary importance. B. profits are maximized on a quarterly basis. C. virtually all earnings are paid as dividends to common stockholders. D. optimally increasing the long-term value of the firm is emphasized. 53. Which of the following is not a true statement about the goal of maximizing shareholder wealth? A. It takes into account the timing of cash-flows. B. It is a short-run point of view which takes risk into account. C. It considers risk as a factor. D. None of these. 54.Insider trading occurs when A. someone has information not available to the public which they use to profit from trading in stocks. B. corporate officers buy stock in their company. C. lawyers, investment bankers, and others buy common stock in compan ies represented by their firms. D. any stock transactions occur in violation of the Federal Trade Commissions restrictions on monopolies. 55. The major difficulty in most insider-trading cases has been   A. that lenient judges have simply released the guilty individuals. B. that insider trading, even though illegal, actually serves a beneficial economic and financial purpose.C. that inside trades have not been legally well defined. D. inside trades actually have a beneficial effect on the wealth of all stockholders. 56. Money markets would include which of the following securities? A. common stock and corporate bonds. B. treasury bills and commercial paper. C. certificates of deposit and preferred stock. D. all of these. 57. Capital markets do not include which of the following securities:   A. common stock B. commercial paper C. government bonds D. preferred stock 58. When a corporation uses the financial markets to raise new funds, the sale of securities is made in the   A. rimary market. B. secondary market. C. on-line market. D. third market. 59. Corporate restructuring has been one result of more institutional ownership. Restructuring can cause   A. changes in the assets and liabilities of the firm. B. the sale of low-profit margin divisions. C. the removal of current management and/or large reductions in the workforce. D. all of these. 60. The internationalization of the financial markets has   A. allowed firms such as McDonalds to raise capital around the world. B. raised the cost of capital. C. forced companies to price everything in U. S. dollars. D. all of these. Chapter 2True / False Questions 61. The income statement is the major device for measuring the profitability of a firm over a period of time. TRUE 62. The income statement measures the increase in the assets of a firm over a period of time. FALSE 63. Operating profit is essentially a measure of how efficient management is in generating revenues and controlling expenses. TRUE 64. Ac counting income is based on verifiably completed transactions. TRUE 65. The P/E ratio is strongly related to the past performance of the firm. FALSE 66. When a firm has a sharp drop off in earnings, its P/E ratio may be artificially high. TRUE 67.The real value of a firm is the same from an economic and accounting perspective. FALSE 68. A balance sheet represents the assets, liabilities, and owner's equity of a company at a given point in time. TRUE 69. The investments account represents a commitment of funds of at least one year or more. TRUE 70. Asset accounts are listed in order of their liquidity. TRUE 71. Accumulated depreciation shows up in the income statement. FALSE 72. Total assets of a firm are financed with liabilities and stockholders equity. TRUE 73. Book value per share and market value per share are usually the same dollar amount. FALSE 74.Book value per share is of greater concern to the financial manager than market value per share. FALSE 75. Book value is equal to net worth. TRUE 76. Equity is a measure of the monetary contributions that have been made directly or indirectly on behalf of the owners of the company. TRUE 77. Stockholders' equity is equal to liabilities plus assets. FALSE 78. Retained earnings shown on the balance sheet represents available cash on hand generated from prior year's earnings but not paid out in dividends. FALSE 79. Retained earnings represent the firm's cumulative earnings since inception, minus dividends and other adjustments.TRUE 80. The statement of cash flows helps measure how the changes in a balance sheet were financed between two time periods. TRUE 81. Cash flow is equal to earnings before taxes minus depreciation. FALSE 82. An increase in an asset represents a source of funds. FALSE 83. Assume that two companies both have Net Income of $100,000. The firm with the highest depreciation expense will have the highest cash flow, assuming all other adjustments are equal. TRUE 84. An increase in inventory represe nts a source of funds. FALSE 85. An increase in a liability account represents a source of funds on the cash flow statement.TRUE 86. An increase in accounts receivable represents a reduction in cash flows from operations. TRUE 87. An increase in accounts payable represents a reduction in cash flows from operations. FALSE 88. The purchase of a new factory would reduce the cash flows from investing activities on the statement of cash flows. TRUE 89. The sale of corporate bonds held by the firm as a long-term investment would increase cash flows from investing activities on the statement of cash flows. TRUE 90. Paying dividends to common shareholders will not affect cash flows from financing activities. FALSE 91.The sale of a firm's securities is a source of funds, whereas the payment of dividends is a use of funds. TRUE 92. Depreciation is an accounting entry and does not involve a cash expense. TRUE 93. Free cash flow is equal to cash flow from operating activities minus necessary ca pital expenditures and normal dividend payments. TRUE 94. An increase in accounts receivable results in a cash inflow on the statement of cash flows. FALSE 95. A decrease in bonds payable results in a cash outflow on the statement of cash flows. TRUE 96. An increase in accrued expenses results in a cash outflow on the statement of cash flows.FALSE Multiple Choice Questions 97. Which of the following is not one of the three basic financial statements? A. Income Statement B. Statement of Retained Earnings C. Statement of Cash Flows D. Balance Sheet 98. Which of the following is not subtracted out in arriving at operating income? A. interest expense B. cost of goods sold C. depreciation D. selling and administrative expense 99. Increasing interest expense will have what effect on EBIT? A. increase it B. decrease it C. no effect D. not enough information to tell 100. The residual income of the firm belongs to A. creditors. B. preferred stockholders.C. common stockholders. D. bondholders . 101. Allen Lumber Company had earnings after taxes of $580,000 in the year 2006 with 400,000 shares outstanding on December 31, 2006. On January 1, 2007, the firm issued 35,000 new shares. Because of the proceeds from these new shares and other operating improvements, 2007 earnings after taxes were 25 percent higher than in 2006. Earnings per share for the year-end 2007 was   A. $1. 67 B. $1. 45 C. $1. 81 D. None of these 102. Consider the following information for Ball Corp. [pic] What is the Operating Profit for Ball Corp? A. $71,450 B. $90,000 C. 120,000 D. None of these 103. Candy Company had sales of $240,000 and cost of goods sold of $108,000. What is the gross profit margin (ratio of gross profit to sales)? A. 75% B. 55% C. 73. 3% D. None of these 104. Density Farms, Inc. had sales of $500,000, cost of goods sold of $180,000, selling and administrative expense of $70,000, and operating profit of $90,000. What was the value of depreciation expense? A. $170,000 B. $230,000 C. Less than $170,000 D. None of these 105. Elgin Battery Manufacturers had sales of $900,000 in 2006 and their cost of goods sold represented 65 percent of sales.Selling and administrative expenses were 9 percent of sales. Depreciation expense was $10,000 and interest expense for the year was $8,000. The firm's tax rate is 30 percent. What is the dollar amount of taxes paid? A. $151,200 B. $145,800 C. More than $151,800 D. None of these 106. A firm with earnings per share of $5 and a price-earnings ratio of 15 will have a stock price of   A. $20. 00 B. $75. 00 C. $3. 00 D. the market assigns a stock price independent of EPS and the P/E ratio. 107. Earnings per share is A. operating profit divided by number of shares outstanding. B. et income divided by number of shares outstanding. C. net income divided by stockholders' equity. D. net income minus preferred dividends divided by number of shares outstanding. 108. Reinvested funds from retained earnings theoretically belong to:   A. bond holders. B. common stockholders. C. employees. D. all of these. 109. The firm's price-earnings (P/E) ratio is influenced by its   A. capital structure. B. earnings volatility. C. sales, profit margins, and earnings. D. all of these. 110. Which of the following factors do not influence the firm's P/E ratio:   A. past earnings. B. shares outstanding.C. volatility in performance. D. none of these. 111. Which of the following would not be classified as a current asset? A. Marketable securities B. Investments C. Prepaid expenses D. Inventory 112. An item which may be converted to cash within one year or one operating cycle of the firm is classified as a   A. current liability. B. long-term asset. C. current asset. D. long-term liability. 113. Which of the following would not be included in the balance sheet investment account? A. stocks of other corporations B. long term government bonds C. marketable securities D. investments in other corporations 14. Which of the followi ng is not a primary source of capital to the firm? A. assets B. common stock C. preferred stock D. bonds 115. The major limitation of financial statements is A. in their complexity. B. in their lack of comparability. C. in their use of historical cost accounting. D. in their lack of detail. 116. Net worth is equal to stockholders' equity A. plus dividends. B. minus preferred stock. C. plus preferred stock. D. minus liabilities. 117. Book value is the same as A. stockholders' equity. B. fixed assets minus long-term debt. C. net worth. D. current assets minus current debt. 118.Total stockholders' equity consists of A. preferred stock and common stock. B. common stock and retained earnings. C. common stock and capital paid in excess of par. D. preferred stock, common stock, capital paid in excess of par and retained earnings. 119. The net worth of a firm A. is usually the same as the firm's market value. B. is based on current asset costs. C. is based on current liabilities. D. none of these. 120. The orientation of book value per share is __________, while the orientation of market value per share is ___________. A. short term, long term B. future, historical C. historical, future D. ong term, short term 121. A statement of cash flows allows a financial analyst to determine   A. whether a cash dividend is affordable. B. how increases in asset accounts have been financed. C. whether long-term assets are being financed with long-term or short-term financing. D. all of these. 122. A firm's purchase of plant and equipment would be considered a   A. use of cash for financing activities. B. use of cash for operating activities. C. source of cash for investment activities. D. use of cash for investment activities. 123. Depreciation is a source of cash inflow because A. it is a tax-deductible non-cash expense.B. it supplies cash for future asset purchases. C. it is a tax-deductible cash expense. D. it is a taxable expense. 124. Depreciation tends to A. increase cash flow and decrease income. B. decrease cash flow and increase income. C. affect only cash flow. D. affect only income. 125. Given the following, what is free cash flow? [pic] A. $115,000. B. $235,000. C. $185,000. D. $165,000. 126. Assuming a tax rate of 35%, depreciation expenses of $400,000 will   A. reduce income by $140,000. B. reduce taxes by $140,000. C. reduce taxes by $400,000. D. have no effect on income or taxes, since depreciation is not a cash expense. 27. Assuming a tax rate of 30%, the after-tax cost of interest expense of $200,000 is   A. $60,000 B. $140,000 C. $200,000 D. $120,000 128. Assuming a tax rate of 40%, the after-tax cost of a $200,000 dividend payment is   A. $200,000 B. $70,000 C. $130,000 D. none of these. 129. Farah Snack Co. has earnings after taxes of $128,750. Interest expense for the year was $20,000; preferred dividends paid were $18,750; and common dividends paid were $30,000. Taxes were $15,000. The firm has 100,000 shares of common stock o utstanding. Earnings per share on the common stock was   A. $0. 90 B. $1. 10 C. $0. 5 D. $0. 80 130. Gerry Co. has a gross profit of $880,000 and $360,000 in depreciation expense. Selling and administrative expense is $120,000. Given that the tax rate is 40 percent, compute the cash flow for Gerry Co. A. $456,000 B. $240,000 C. $600,000 D. None of these 131. Hoover Inc. has current assets of $360,000 and fixed assets of $640,000. Current liabilities are $90,000 and long-term liabilities are $160,000. There is $90,000 in preferred stock outstanding and the firm has issued 10,000 shares of common stock. Compute book value (net worth) per share   A. $84. 00 B. $66. 00 C. $75. 00D. None of these 132. The best indication of the operational efficiency of management is   A. net income. B. earnings per share. C. earnings before interest and taxes (EBIT). D. gross profit. 133. A corporation can increase their earnings per share by   A. increasing tax-deductible expenses B. increasing Treasury stock C. decreasing depreciation D. decreasing retained earnings From End of the Chapter 2 Problems 5. Given the following information, prepare, in good form, an income statement for Goodman Software, Inc. Selling and administrative expense$ 50,000 Depreciation expense80,000 Sales400,000Interest expense30,000 Cost of goods sold150,000 Taxes18,550 2-5. Solution: Goodman Software, Inc. Sales$ 400,000 Cost of goods sold 150,000 Gross Profit250,000 Selling and administrative expense50,000 Depreciation expense 80,000 Operating profit120,000 Interest expense 30,000 Earnings before taxes90,000 Taxes 18,550 Earnings after taxes$ 71,450 6. Given the following information prepare in good form an income statement for the Kid Rock and Gravel Company. Selling and administrative expense$ 60,000 Depreciation expense70,000 Sales470,000 Interest expense40,000 Cost of goods sold140,000Taxes45,000 2-6. Solution: Kid Rock and Gravel Co. Income Statement Sales$ 470,000 Cost of goods sold$ 140, 000 Gross profit$ 330,000 Selling and administrative expense$ 60,000 Depreciation expense$ 70,000 Operating profit$ 200,000 Interest expense$ 40,000 Earnings before taxes$ 160,000 Taxes$ 45,000 Earnings after taxes$ 115,000 7. Prepare in good form an income statement for Virginia Slim Wear. Take your calculations all the way to computing earnings per share. Sales$600,000 Shares outstanding100,000 Cost of goods sold200,000 Interest expense30,000 Selling and administrative expense40,000Depreciation expense20,000 Preferred stock dividends80,000 Taxes100,000 2-7. Solution: Virginia Slim Wear Income Statement Sales$600,000 Cost of goods sold 200,000 Gross profit400,000 Selling and administrative expense40,000 Depreciation expense 20,000 Operating profit340,000 Interest expense 30,000 Earnings before taxes310,000 Taxes 100,000 Earnings after taxes210,000 Preferred stock dividends80,000 Earnings available to common stockholders130,000 Shares outstanding100,000 Earnings per share$ 1. 30 8. Prepare in good form an income statement for Franklin Kite Co. , Inc.Take your calculations all the way to computing earnings per share. Sales$900,000 Shares outstanding50,000 Cost of goods sold400,000 Interest expense40,000 Selling and administrative expense60,000 Depreciation expense20,000 Preferred stock dividends80,000 Taxes50,000 2-8. Solution: Franklin Kite Company Income Statement Sales$900,000 Cost of goods sold400,000 Gross profit500,000 Selling and administrative expense60,000 Depreciation expense20,000 Operating profit$420,000 Interest expense40,000 Earnings before taxes$380,000 Taxes50,000 Earnings after taxes$330,000 Preferred stock dividends80,000Earnings available to common stockholders250,000 Shares outstanding50,000 Earnings per share$5. 00 9. Lasar Technology, Inc. , had sales of $500,000, cost of goods sold of $180,000, selling and administrative expense of $70,000, and operating profit of $90,000. What was the value of depreciation expense? Set this problem up as a partial income statement, and determine depreciation expenses as the plug figure. 2-9. Solution: Lasar Technology, Inc. Sales$500,000 Cost of goods sold $180,000 Gross Profit$320,000 Selling and administrative expense70,000 Depreciation Expense (plug figure) 160,000Operating profit$ 90,000 10. The Ace Book Company sold 1,500 finance textbooks for $185 each to High Tuition University in 2008. These books cost Ace $145 to produce. Ace spent $10,000 (selling expense) to convince the university to buy its books. In addition, Ace borrowed $80,000 on January 1, 2008, on which the company paid 10 percent interest. Both interest and principal of the loan were paid on December 31, 2008. Ace’s tax rate is 25 percent. Depreciation expense for the year was $15,000. Did Ace Book Company make a profit in 2008? Please verify with an income statement presented in good form. -10. Solution: Ace Book Company Sales (1,500 books at $185 each)277,500 Cost of goods sold (1,500 books at $145 each ) 217,500 Gross Profit60,000 Selling expense10,000 Depreciation expense 15,000 Operating profit†¦Ã¢â‚¬ ¦35,000 Interest expense 8,000 Earnings before taxes27,000 Taxes @ 25% 6,750 Earnings after taxes20,250 11. Carr Auto Wholesalers had sales of $900,000 in 2004 and their cost of goods sold represented 65 percent of sales. Selling and administrative expenses were 9 percent of sales. Depreciation expense was $10,000 and interest expense for the year was $8,000.The  firm’s tax rate is 30 percent. a. Compute earnings after taxes. b. Assume the firm hires Ms. Hood, an efficiency expert, as a consultant. She suggests that by increasing selling and administrative expenses to 12 percent of sales, sales can be increased to $1,000,000. The extra sales effort will also reduce cost of goods sold to 60 percent of sales (there will be a larger markup in prices as a result of more aggressive selling). Depreciation expense will remain at $10,000. However, more automobiles will have t o be carried in inventory to satisfy customers, and interest expense will go up to $15,000.The firm’s tax rate will remain at 30 percent. Compute revised earnings after taxes based on Ms. Hood’s suggestions for Carr Auto Wholesalers. Will her ideas increase or decrease profitability? 2-11. Solution: Carr Auto Wholesalers Income Statement a. Sales$ 900,000 Cost of goods old (65% of sales) 585,000 Gross Profit$ 315,000 Selling and administrative expense (9% of sales) 81,000 Depreciation 10,000 Operating profit 224,000 Interest expense 8,000 Earnings before taxes 216,000 Taxes @ 30% 64,800 Earnings after taxes $ 151,200 2-11. (Continued) b. Sales $1,000,000Cost of goods sold (60% of sales) 600,000 Gross profit 400,000 Selling and administrative expense (12% of sales) 120,000 Depreciation 10,000 Operating profit 270,000 Interest expense 15,000 Earnings before taxes 255,000 Taxes @ 30% 76,500 Earnings after taxes$ 178,500 Ms. Hood’s ideas will increase profits. 15. E lite Trailer Parks has an operating profit or $200,000. Interest expense for the year was $10,000; preferred dividends paid were $18,750; and common dividends paid were $30,000. The tax was $61,250. The firm has 20,000 shares of common stock outstanding. . Calculate the earnings per share and the common dividends per share for Elite Trailer Parks. b. What was the increase in retained earnings for the year? 2-15. Solution: Elite Trailor Parks a. Operating profit (EBIT)$200,000 Interest expense 10,000 Earnings before taxes (EBT)$190,000 Taxes 61,250 Earnings after taxes (EAT)$128,750 Preferred dividends 18,750 Available to common stockholders$110,000 Common dividends 30,000 Increase in retained earnings$80,000 [pic] Dividends per Share = $30,000/20,000 shares = $1. 50 per share b. Increase in retained earnings = $80,000 16.Johnson Alarm Systems had $800,000 of retained earnings on December 31, 2008. The company paid common dividends of $60,000 in 2008 and had retained earnings of $640 ,000 on December 31, 2007. How much did Johnson earn during 2008, and what would earnings per share be if 50,000 shares of common stock were outstanding? 2-16. Solution: Johnson Alarm Systems Retained earnings, December 31, 2008$800,000 Less: Retained earnings, December 31, 2007 640,000 Change in retained earnings$160,000 Add: Common stock dividends 60,000 Earnings available to common stockholders$220,000 Earnings per share [pic] 17.Mozart Music Co. had earnings after taxes of $560,000 in 2008 with 200,000 shares of stock outstanding. The stock price was $58. 80. In 2009, earnings after taxes increased to $650,000 with the same 200,000 shares outstanding. The stock price was $78. 00 a. Compute earnings per share and the P/E ratio for 2008. The P/E ratio equals the stock price divided by earnings per share. b. Compute earnings per share and the P/E ratio for 2009. c. Give a general explanation of why the P/E changed. 2-17. Solution: Mozart Music Co. a. EPS (2008)[pic] = $2. 80 P/E Ra tio (2008)= Price/EPS =[pic] = 21X b. EPS (2009)[pic] = $3. 5 P/E Ratio (2009)= Price/EPS=[pic]= 24X c. The stock price increased by 34% while EPS only increased 16. 1%. 20. Nova Electrics anticipated cash flow from operating activities of $6 million in 2008. It will need to spend $1. 2 million on capital investments in order to remain competitive within the industry. Common stock dividends are projected at $. 4 million and preferred stock dividends at $. 55 million. a. What is the firm’s projected free cash flow for the year 2008? b. What does the concept of free cash flow represent? 2-20. Solution: Nova Electronics a. Cash flow from operations activities$6. 0 million – Capital Expenditures1. 20 – Common stock dividends. 40 – Preferred stock dividends . 55 Free cash flow$3. 85 million b. Free cash flow represents the funds that are available for special financial activities, such as a leveraged buyout, increased dividends, common stock repurchases, acqui sitions, or repayment of debt. 21. The Rogers Corporation has a gross profit of $880,000 and $360,000 in depreciation expense. The Evans Corporation also has $880,000 in gross profit, with $60,000 in depreciation expense. Selling and administrative expense is $120,000 for each company.Given that the tax rate is 40 percent, compute the cash flow for both companies. Explain the difference in cash flow between the two firms. 2-21. Solution: Rogers Corporation – Evans Corporation | |Rogers |Evans | |Gross profit |$880,000 |$880,000 | |Selling and adm. expense |120,000 |120,000 | |Depreciation |360,000 60,000 | |Operating profit |$400,000 |$700,000 | |Taxes (40%) |160,000 |280,000 | |Earnings after taxes |$240,000 |$420,000 | |Plus depreciation expense |$360,000 |$60,000 | |Cash Flow |$600,000 |$480,000 | | | |Rogers had $300,000 more in depreciation which provided $120,000 (0. 40 ( $300,000) more in cash flow. | | | 22. Horton Electronics has current assets of $320,000 and fi xed assets of $640,000. Current liabilities are $90,000 and long-term liabilities are $160,000. There is $90,000 in preferred stock outstanding and the firm has issued 40,000 shares of common stock. Compute book value (net worth) per share. 2-22. Solution: Horton Energy Company Current assets |$320,000 | |Fixed assets |640,000 | |Total assets |$960,000 | |–Current liabilities |90,000 | |–Long-term liabilities |160,000 | |Stockholders’ equity |$710,000 | |–Preferred stock obligation |90,000 | |Net worth assigned to common $620,000 | | | | |Common shares outstanding |40,000 | | | | |Book value (net worth) per share |$15. 50 | 23. The Holtzman Corporation has assets of $400,000, current liabilities of $50,000, and long-term liabilities of $100,000. There is $40,000 in preferred stock outstanding; 20,000 shares of common stock have been issued. a. Compute book value (net worth) per share. b. If there is $22,000 in earnings available to common stockholders a nd Holtzman’s stock has a P/E of 18 times earnings per share, what is the current price of the stock? c. What is the ratio of market value per share to book value per share? 2-23. Solution: Holtzman Corporation |a.Total assets |$400,000 | |–Current liabilities |50,000 | |–Long-term liabilities |100,000 | |–Stockholders’ equity |$250,000 | |–Preferred stock |40,000 | |Net worth assigned to common |$210,000 | |Common shares outstanding |20,000 | |Book values (net worth) per share |$10. 50 | |b. Earnings available to common |$22,000 | |Shares outstanding |20,000 | |Earnings per share |$1. 10 | | [pic] | |c.Market value per share (price) to book value per share $19. 80/$10. 50 = 1. 89 | 24. Bradley Gypsum Company has assets of $1,900,000, current liabilities of $700,000, and long-term liabilities of $580,000. There is $170,000 in preferred stock outstanding; 30,000 shares of common stock have been issued. a. Compute book value (net worth) per share. b. If there is $42,000 in earnings available to common stockholders and Bradley’s stock has a P/E of 15 times earnings per share, what is the current price of the stock? c. What is the ratio of market value per share to book value per share? 2-24. Solution: Bradley Gypsum Company |a.Total assets |$1,900,000 | |–Current liabilities |700,000 | |–Long-term liabilities |580,000 | |Stockholders’ equity |$ 620,000 | |–Preferred stock |170,000 | |Net worth assigned to common |$ 450,000 | |Common shares outstanding |30,000 | |Book values (net worth) per share |$ 15. 00 | |b. Earnings available to common | | |stockholders |$ 42,000 | |Shares outstanding |30,000 | |Earnings per share |$ 1. 40 | | [pic] | |c.Market value per share (price) to book value per share $21. 00/$15. 00 = 1. 40 | Chapter 14 True / False Questions 148. Capital markets consist of securities having maturities greater than one year. TRUE 149. The capital structure of the f irm consists of long-term debt and equity. TRUE 150. Capital markets are becoming increasingly international as investors and issuers seek out the best risk-return opportunities. TRUE 151. Upon entering the capital markets, an investor might invest in common stocks, preferred stock, negotiable certificates of deposit, and convertible securities. FALSE 152.In the last decade, the US has invested substantially more in foreign countries than foreign countries have invested back in the US. FALSE 153. Municipal securities are called tax exempt because no federal taxes must be paid on interest received. TRUE 154. The stock market far exceeds the bond market in terms of size of new capital raised. FALSE 155. The capital markets serve as a way of allocating available capital to the most efficient user. TRUE 156. The main reason for the small amount of financing with preferred stock is that dividends on preferred stock are not tax deductible as are interest paid on bonds. TRUE 157. Retained earnings account for the majority of internally generated corporate funds. FALSE 158.When an investor buys stock in the stock market, he is purchasing shares from a company. FALSE 159. Internal funds generated by corporations include retained earnings and non cash expenses such as depreciation and deferred taxes. TRUE 160. Households and the government are mainly considered to be suppliers of funds while corporations are generally considered users of funds. FALSE 161. Financial intermediaries channel funds into the capital markets from the household sector. TRUE 162. Brokers on an organized stock exchange act as an agent for the person buying or selling securities. TRUE 163. Brokers actually own the securities they buy and sell on the floor of the exchange. FALSE 164.The NASDAQ National Market is composed of large nation-wide companies that are traded in the over-the-counter market. TRUE 165. The strong form of the efficient market hypothesis states that prices reflect all public in formation. FALSE 166. The efficient market hypothesis is generally concerned with the impact of information on the behavior of stock prices. TRUE 167. The weak form of the efficient market hypothesis states that an investor can profit by using past price data. FALSE 168. Markets are efficient when prices adjust rapidly to new information, continuous markets exist and large dollar trades can be absorbed without large price movements. TRUE 169.The Sarbanes-Oxley Act of 2002 holds the CEO legally accountable for the accuracy of their firm's financial statements. TRUE 170. The Sarbanes-Oxley Act of 2002 holds a firm's internal auditors legally accountable for the accuracy of their firm's financial statements. FALSE 171. The future of the NYSE is uncertain due to their unwillingness to adapt to the increase in internationalization and electronic trading in the markets. FALSE Multiple Choice Questions 172. Evidence of how global markets are linked was provided in 1997 and 1998 when intern ational markets reacted to   A. the collapse of Asian currencies in Thailand, Indonesia, Malaysia and Korea. B. Russia's default on its sovereign debt. C. Japan's seven years of economic stagnation.D. a and b are true. 173. When global capital markets collectively react to international events like Russia's default on its sovereign debt, it is common to find   A. that there is no impact on multinational companies' ability to raise capital. B. an impact on the ability to raise capital. C. that Wall Street firms are so diversified that they are not affected by this event. D. All of these are true. 174. Which of the following is not a money market instrument? A. Treasury bills B. Commercial paper C. Negotiable certificates of deposit D. Treasury bonds 175. Global capital markets are influenced by A. interest rates. B. investor confidence. C. elative economic growth. D. all of these. 176. Companies list their stock around the globe to A. capitalize on the inefficiency inherent in fo reign markets. B. increase liquidity for their stockholders. C. provide opportunities for the sale of new stock in foreign countries. D. b and c are correct. 177. Foreign investors have preferred to invest in the United States due to all but one of the following reasons:   A. less stringent regulation of securities markets. B. political stability of the U. S. government. C. the U. S. dollar is the world's international currency. D. all of these are reasons that foreign investors prefer to invest in the United States. 178.With respect to the United States and its relationship with the rest of the world, it can be said that   A. the U. S. has invested more dollars in the rest of the world than foreign countries have invested in the U. S. B. the U. S. has actively helped foreign countries finance their government deficits. C. foreign investors hold large positions in U. S. government securities. D. All of these. 179. Financial instruments in the capital markets generally fall under what category in the Balance Sheet? A. Short-term liabilities and equities. B. Long-term liabilities and equities. C. Near cash assets. D. None of these. 180. Corporations prefer bonds over preferred stock for financing their operations because   A. referred stocks require a dividend. B. bond interest rates change with the economy while stock dividends remain constant. C. the after-tax cost of debt is less than the cost of preferred stock. D. none of these. 181. Federally sponsored credit agencies include all but which of the following? A. Securities Investor Protection Corporation (SIPC) B. Federal Home Loan Banks (FHLB) C. Student Loan Marketing Association (Sallie Mae) D. Federal National Mortgage Association (Fannie Mae) 182. Which of the following is an internal source of funds? A. Cash flow from depreciation (tax shield) B. Net loss C. Repurchase of debt securities D. Bank loan 183.The major supplier of funds for investment in the whole economy is   A. businesses. B. hous eholds. C. government. D. financial institutions. 184. Financial intermediaries serve which of the following purposes? A. Financial intermediaries allow for indirect investment in the capital markets by households. B. Aid in the flow of funds through the economy. C. Help provide allocation of funds to the best investments. D. All of these. 185. Which of the following are benefits of financial intermediaries? A. Increase market liquidity B. Provide a direct market for investors C. Act as agents of the government D. Only a and b 186. The purpose of secondary trading is to A. rovide liquidity and competition between investments. B. provide a market to issue securities not handled in primary trading. C. provide jobs for brokers and dealers. D. provide lower commissions than on the organized exchanges. 187. The most important capital markets in the world (in terms of dollar value) are located in   A. New York. B. London. C. Toronto. D. Tokyo. 188. Which Stock Exchange is known as the m ost liquid? A. NASDAQ B. AMEX C. CBOT D. NYSE 189. Middle to small size companies that are centered in one city or state would most likely be found on the   A. NASDAQ National Market. B. NASDAQ Small Cap Market. C. Supplemental list. D. New York Stock Exchange. 190.The emergence of trading via ECNs has A. offer a unique advantage not offered by the NYSE B. lowered the cost of trading. C. made trading more difficult for small investors. D. all of these are true. 191. Which of the following is not a criterion for an efficient market? A. Prices adjust rapidly to new information. B. Large dollar amounts of securities can be absorbed without price destabilization. C. Each successive trade is made at a price close to the previous trade. D. Computerized handling of transactions. 192. Security markets are efficient when each of the following exist except   A. security prices follow the leading indicators such as the DJIA very closely. B. he markets can absorb large dollar amounts of sto ck without destabilizing the price. C. prices adjust rapidly to new information. D. there is a continuous market where each successive trade is made at a price close to the previous trade. 193. The efficient market hypothesis deals primarily with   A. random speculation in securities. B. the degree to which prices adjust to new information. C. degrees to which price movements are the result of past trends. D. how an investor can significantly outperform the market in general. 194. The efficient market hypothesis has several forms. The weak form states that   A. past price data is unrelated to future prices. B. prices reflect all public information. C. ll information both public and private is immediately reflected in stock prices. D. none of these 195. Security markets provide liquidity A. by allowing corporations to raise funds by selling new issues. B. by creating a market in which owners may easily turn an investment into cash through its sale. C. a and b are both correct. D. neither a nor b are correct. 196. The semi-strong form of the efficient market hypothesis states that   A. past price data is unrelated to future prices. B. prices reflect all public information. C. all information both public and private is immediately reflected in stock prices. D. none of these 197. The strong form of the efficient market hypothesis states that   A. ast price data is positively correlated to future prices. B. prices reflect all public information. C. all information both public and private is immediately reflected in stock prices. D. none of these 198. Security markets are affected by all of the following except:   A. interest rates B. global crises C. book values of equity D. emotions 199. Financial intermediaries include all of the following except:   A. commercial banks B. life insurance companies C. corporations D. pension plans 200. The purposes of security legislation include all of the following except:   A. protect against fraud B. ensure market efficiency C. reduce insider trading D. provide a global competitive advantage