Exam 16: Decision Making and Payoff Tables in Investment Scenarios

i. In a time series analysis, the letter "a" in the linear trend equation, is the value of when t = 0. ii. In the linear trend equation, t is any value that corresponds with a time period, i.e., month or Quarter. iii. If the sales, production or other data over a period of time tend to approximate a straight-line Trend, the equation developed by the least squares method cannot be used to forecast sales for a Future period.

Listed below is the net sales in $ million for Home Depot Inc., and its subsidiaries from 1994 to 2003. Using the printout below, what are the estimated sales for 2011?

i. Long-term forecasts are usually from one year to more than 10 years into the future. ii. A forecast is considered necessary in order to have the raw materials, production facilities, and Staff available to meet estimated future demands. iii. Many business and economic time series have a recurring seasonal pattern.

Listed below is the net sales in $ million for Home Depot Inc., and its subsidiaries from 1994 to 2003. Using the printout below, what are the estimated sales for 2010?

For an annual time series extending from 1993 through 2001, how many years would be lost in a five-year moving average?

Which of the following is true for the exponential equation?

If a quarterly seasonal index is 0.56, it implies that:

You are trying to decide in which of the three companies you should invest. Refer to the following Payoff Table. If the probability of the market declining in the next year is 0.4, which of the following statements Are correct? i. The Expected value of stock purchased under conditions of certainty is $1,980. ii. The Expected value of stock purchased under conditions of certainty is $120. iii. The Expected value of stock purchased under conditions of certainty is $440.

For a three-year moving average, how many values will be lost at the beginning and end of the time Series?

Determine the expected value for the following payoff table.

You have a decision to invest $10,000 in any of four different companies. You estimate the Probabilities that the economy will be favorable or unfavorable and you estimate the percent Returns over the next year. What is the expected value for Company 1?

Suppose that the below represents the opportunity loss table for three stocks based on whether The market rises or declines. If there is a 30% chance of the market rising and a 70% chance of it Declining, what is the expected opportunity loss for stock C?

If the exports ($ millions) for the period 1997 through 2001 were $878, $892, $864, $870, and $912 Respectively, what are these values called?

You have a decision to invest $10,000 in any of four different companies. You estimate the Probabilities that the economy will be favorable or unfavorable and you estimate the percent Returns over the next year. What is the expected value for Company 2?

You are trying to decide in which of the three companies you should invest. Refer to the following Payoff Table. If the market declines in the next year, which of the following statements are correct? i. The Opportunity Loss for Company A is $250. ii. The Opportunity Loss for Company B is $150. iii. The Opportunity Loss for Company C is $0.

i. The irregular component of a time series is the easiest to measure. ii. The ratio-to-moving average method removes the time series trend component, resulting in 12 Numbers that are called specific seasonals. iii. For a quarterly time series, the initial step, using the ratio-to-moving average method, is to Remove the seasonal components from the time series using a 3-month centered moving average.

What is variation within a year, such as high sales at Christmas and Easter and low sales in January, Called?

You are trying to decide in which of the three companies you should invest. Refer to the following Payoff Table. If the market rises in the next year, which of the following statements are correct? i. The Opportunity Loss for Company A is $200. ii. The Opportunity Loss for Company B is $0. iii. The Opportunity Loss for Company C is $400.

An investor has a 35% chance of making $1000 and a 65% chance of making $10 000, what is the Expected payoff for this investor?

You are trying to decide in which of the three companies you should invest. Refer to the following Payoff Table. If the market declines in the next year, which of the following statements are correct? i. The Opportunity Loss for Company A is $250. ii. The Opportunity Loss for Company B is $30. iii. The Opportunity Loss for Company C is $500.