(a) Calculate v, the estimated capital:output ratio for 2001 using the savings rate, s, and growth rate, g, using data for 2001. Assume that d, (the rate of depreciation of existing capital) is 5% and constant over all the years.
(b) Using this estimated ratio and the savings data for each of the following years: 2002 to 2005, calculate the predicted growth rate of GDP for each year from 2002 to 2005. Keep assuming that d = 5%. How well do the predicted growth rates match the actual growth rates?
(c) Now calculate v = the estimated capital: output ratio for each of the years 2002 to 2004. Then using the estimated value of v for 2002, and savings data for 2003, calculate the predicted growth rate of GDP for 2003; then using the estimated value of v for 2003, and savings data for 2004 calculate the predicted growth rate for 2004 and so on.
This Question: 1 pt 1 of 30 (12 complete) + This Test: 30 pts possibl Question Help Use the given table, which lists six possible assignments of probabilities for tossing a coin Assignments HH HT TH TT twice, to determine which of the assignments of probabilities are consistent with the definition of probability model. A Ware consistent with the definition of a probability model. 1 (Uve a comma to separate answers as needed.) 10 10 D - 4- F 19QUESTION 22 Which of the following is not a property of the normal distribution? The normal distribution is a bell-shaped, symmetric, and continuous curve. As the S.D. of a normal distribution decreases, it becomes wider and more spread out. The center of the normal distribution is the mean. The normal distribution curve never touches the x-axis.(similar to) Question Help (CAPM and expected returns) a. Given the following holding-period returns, . compute the average returns and the standard deviations for the Zemin Corporation and for the market b. If Zemin's beta is 1.32 and the risk-free rate is 7 percent, what would be an expected return for an investor owning Zemin? (Note: Because the preceding returns are based on monthly data, you will need to annualize the returns to make them comparable with the risk-free rate. For simplicity, you can convert from monthly to yearly returns by multiplying the average monthly returns by 12.) C. How does Zemin's historical average return compare with the return you believe you should expect based on the capital asset pricing model and the firm's systematic risk? a. Given the holding-period returns shown in the table. the average monthly return for the Zemin Corporation is 5% (Bound to two decimal places. ) i Data Table X Month Zemin Corp Market 7% GUAUNE Print Done Enter your answer in the answer box and then click Check Answer. Check Anniver Clear All 6 parts remaining W e DELLQUESTION 1 All risk that stockholders bear should be compensated with higher expectations for returns True False. Only firm risk compensates through higher expected returns )False, Only market risk compensates through higher expected returns False. Only interest rate risk compensates through higher expected returns QUESTION 2 For the majority of stocks, what percentage of their returns fall between 1 and 2 standard deviations away from their average return? About equal to 27% Greater than 279% Less than 2796 About 13.5%A continuous-time Markov chain with the transition rate matrix is given as follows: 1 2 -4 2 2 0=2 3 31 -5 (a) The expected amount of time spent in each state is, S = (1-9)' 0 0 2 = 0 1 0 3 0 5 0 'O = =
