Washington Corporation has a $1,000 par value bond outstanding paying annual interest of 8%. The bond matures in 20 years. If the present yield to maturity for this bond is 10%, calculate the current price of the bond. Show calculations.

The Abacus Computer Company has decided to use the Capital Asset Pricing Model to estimate its cost of equity. The firm’s beta was estimated at 1.4. The S&P/TSX Composite-stock index has returned 12.5% to investors over a fairly long period of time, and Abacus has decided to use this value as the market return. Treasury bills are currently providing investors with a 6.5% yield. Calculate Abacus’s cost of equity using the CAPM.

What is linear regression mainly used for?

A company tests whether a new training program improves employee productivity. The test result is statistically significant. This means:

Why must research goals be decided before running tests?

A regression line predicts salary from years of experience. The slope is positive but small. What does this mean?

What is alpha (α) in confidence interval language?

A researcher adds up the total waiting time for groups of customers at a coffee shop. Even though individual waiting times vary a lot, the totals look predictable. Why?

Two groups have averages of 70 and 72. The difference is small compared to how much scores vary inside each group. What is most likely true?

Why are tail risks dangerous?