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Exercise 1 The he population of Ectenia is 100 people: 40 work full-time, 20 work half-time but would prefer to work full-time, 10 are looking for a job, 10 would like to work but are so discouraged that they have given up looking, 10 are not interested in working because they are full-time students, and 10 are retired. What is the number of unemployed? Using the numbers in the preceding question, what is the size of Ectenia's labor force? (15 marks) (10 marks)

Exercise 2 Carly wants to buy and operate an ice-cream truck but doesn't have the financial resources to start the business. She borrows $20,000 from her friend Freddie, to whom she promises an interest rate of 7 percent, and gets another $30,000 from her friend Sam, to whom she promises a third of her profits. What best describes this situation? A bond tends to pay a high interest rate if it is a. a short-term bond rather than a long-term bond. b. a municipal bond exempt from federal taxation. c. issued by the federal government rather than a corporation. d. issued by a corporation of dubious credit quality. Support your answer using example(s). Discuss and evaluate the main advantage of mutual funds. (10 marks) (8 marks) (7 marks)

2 Heidi Software Corporation provides a variety of share-based compensation plans to its employees. Under its executive stock option plan, the company granted options on January 1, 2024, that permit executives to acquire 7 million of the company's $1 par common shares within the next five years, but not before December 31, 2025 (the vesting date). 1.75 points 02:35:06 eBook Print ច References • The exercise price is the market price of the shares on the date of grant, $58.00 per share. • The fair value of the 7 million options, estimated by an appropriate option pricing model, is $14 per option. . No forfeitures are anticipated. • Ignore taxes. Required: 1. Determine the total compensation cost pertaining to the options. 2. Prepare the appropriate journal entry to record the award of options on January 1, 2024. 3. Prepare the appropriate journal entry to record compensation expense on December 31, 2024. 4. Prepare the appropriate journal entry to record compensation expense on December 31, 2025. Complete this question by entering your answers in the tabs below. Req 1 Reg 2 to 4 Determine the total compensation cost pertaining to the options. Note: Enter your answer in millions (i.e., 10,000,000 should be entered as 10). Total compensation cost $ 98 million < Req 1 Req 2 to 4 >

4 For the year ended December 31, 2024, Norstar Industries reported net income of $960,000. At January 1, 2024, the company had 1,050,000 common shares outstanding. The following changes in the number of shares occurred during 2024: 1.75 points 02:34:10 eBook Print April 30 Sold 80,000 shares in a public offering May 24 Declared and distributed a 5% stock dividend June 1 Issued 90,000 shares as part of the consideration for the purchase of assets from a subsidiary Required: Compute Norstar's earnings per share for the year ended December 31, 2024. Note: Do not round intermediate calculations. Except for per share amounts, enter your answers in thousands (i.e., 10,000 should be entered as 10). Round "Earnings per share" answer to 2 decimal places. Numerator $ 960,000 + Denominator = 1,211,000 = Earnings per Share $ 0.80

Mr Anderson is the Asset Management Vice President. Anderson shows you the table below. Detailed Product Main description asset asset type class Item Ticker # 0 ^DJI 1 TLT 2 NVDA 3 MIGU.SI 4 ZW=F 5 ETH:USD 6 SGD=X Dow Jones Equities Industrial Average X X X X X X X X X X X X US Industrial Index X X X X X X or Money capital? | Cash or future? OTC Exchange- traded? Risk- reward X X X X X X (Low/ or Medium / High) Capital Cash High Exchange- traded Each product is indicated by its Yahoo! finance ticker. The first row (item #0) is a completed illustration for guidance. It need not to be considered in your answers. X X X X X X (a) Describe fully the six (6) products under items #1-6 by completing the yellow-highlighted cells in the table above. (30 marks) The table lists the financial products the firm invested in on 1 July 2021 before selling them on 30 June 2023. Anderson mentions that the firm's policy on investment decisions is to consider only price changes, using the prices at close day. You can disregard the effect of dividends, stock splits, or FX conversion for securities. Currency quotes are closing mid-point. (b) Appraise in less than two hundred and fifty (250) words (including any cited reference)

Exercise 4 The KLM bond has a 8% coupon rate (with interest paid semi-annually), a maturity value of $1,000, and matures in 5 years. If the bond is priced to yield 6%, what is the bond's current price? (25 marks)

Question 2 Well done so far! You are on to your second interview round with Ms Susan, the firm's senior economist. She reminds you of the changes introduced in June 2022 when the US central bank, the Fed, reversed its Quantitative Easing (QE) policy after almost fifteen years of uninterrupted market liquidity support and started a phase of Quantitative Tightening (QT). (a) Examine in less than three hundred (300) words (including any cited reference) two (2) different reasons for the change in US Fed policy in 2022. (10 marks) QT had a significant impact on financial markets and institutions. Consider the mechanisms of QT and how they play out on the activity and the prices in the financial system. (b) Demonstrate in less than four hundred (400) words (including any cited reference) the impact of QT on five (5) areas of the financial system, namely the stock market, government bonds, corporate bonds, bank lending, and the US dollar. (10 marks) The stance of the US Fed as of 1 August 2023 is less certain than a year ago. Fed officials decided to hold off raising interest rates in June, opting for a pause to assess the impact of ten previous hikes. The decision was made despite disagreement among members. Yet, at the end of July, the Fed chose to proceed with a new rate increase. (c) Discuss in less than three hundred (300) words (including any cited reference) what you think are two (2) different possible motives behind the Fed's recent hesitations. (10 marks)

Part 1: Michael F Fall purchased a new $3,200,000 five-year class asset on September 15, 2023. The asset was placed in service for business October 10, 2023. Assume this was the only asset purchased in 2023. Michael elected to take the maximum Section 179 expense deduction allowed but elected NOT to take additional first- year (bonus) depreciation. Michael's taxable income for 2023 before the cost recovery on this asset was $700,000. Be sure to show all of your calculations for each numbered item!! You must complete the assignment on this worksheet! 1. What is the maximum amount of § 179 that Michael can ELECT (not deduct) in 2023?

Problem #2 Preston Company uses nylon as raw materials to manufacture their products. Preston Company is planning to purchase nylon from Tangsun Company on January 30, 2015 with payment on that date of 1.5 million in Chinese yuan. On November 1, 2014, Preston entered into a 90-day forward contract to buy 1.5million yuan for $0.15 per yuan (the spot rate is $0.17). Preston anticipates significant increases in the USD value per yuan. The forward contract is to be settled net. On December 31, 2014, Preston's year-end, the forward rate for delivery on January 30, 2015 is $0.20 per yuan. The spot and forward rates on January 30, 2015 are $0.22 per yuan. Preston uses a 6% discount rate relating to their hedging activity. Preston purchases 1.5 million yuan on January 30 when the forward contract expires. Monthly effective interest rate = 4.08627% Monthly discount (or interest) rate = 6%/12 months = 0.5% Required: Prepare the necessary journal entries to account for this cash flow hedge and related purchase of nylon by follow the steps below: Step 1. calculate contract discount Step 2. prepare amortization schedule for contract discount Step 3. calculate FV of forward contract Step 4. prepare journal entries 1) On 11/1/14 2) On 12/31/14 3) On 1/30/15

Exercise 3 Suppose that a bond has a face value of $1,000, a coupon rate of 4% and a maturity of four years. The bond makes annual coupon payments. If the yield to maturity is 4%, what is the bond's price? (25 marks)