I am stuck on a question. I cannot answer it. Please give me the solution for this problem. Here is the question. I will also include my homework set #1 in here to so you can help me solve it the right way.

Homework Set #3: Chapters 6, 7, & 8 Due Week 6 and worth 100 points

Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link above.

A. Using the two stocks you selected from Homework #1, identify the Beta for each stock. In your own words, what conclusion can you draw from the stocks current and historical beta? If the stock market went up 10% today, what would be the impact on each of your stocks?

B. Using the 2014 financial statements from your stocks above and the equations from your textbook, prepare the Historical Average and Standard Deviation for each stock.

Homework set #1.

The two different stock exchanges I will compare and contrast are the New York Stock Exchange and also the National Association of Securities Dealer Automated Quotation. Both of these stock exchanges are located in New York City. The NASDAQ launched in 1971 and the NYSE launched in 1972. There are approximately 4700 companies listed companies between the two of these stock exchanges. The two stock exchanges are the two biggest stock exchanges in the world.

The NYSE is known for having more well established companies while the NASDAQ is known more for having more high tech stocks such as Apple Inc.

I will use the Ford Motor Company for this part of the assignment.

Ford Motor Company Free Cash Flow: 2013 (in millions)

Cash Flow from Operations - Capital Expenditures = Free Cash Flow

10,444 6,597 = 3,847(2013annualreport.ford.com, p.70)

Ford Motor Company Free Cash Flow: 2014 (in millions)

14,507 7,463 = 7,044

This is the free cash flow for the Ford Motor Company for years 2013 and 2014.

C. I will also use the Ford Motor Company for this part of the assignment as well.

Liquidity Ratios: Current Ratio = Current Assets / Current Liabilities

2013:42,457 /37,003 = 1.1473

2014:40,442 / 40,108 = 1.0083

The current ratio is mainly for telling us about Fords ability to pay back their debts with their assets.

Quick Ratio = (Current Assets Inventories) / Current Liabilities

2013:(42,457 7,708) / 37,003 = .9390

2014:(40,442 7,866) / 40,108 = .8122

The quick ratio is mainly for telling us about the amount of liquid assets Ford has available for each dollar worth of liabilities that they have.

Management Ratios: Debt Ratio = Total Debt / Total Assets

2013:177,429 / 203,905 = .8701 = 87%

2014:185,269 / 210,443 = .8803 = 88%

The debt ratio tells us about the debt that Ford Motor Company owes to other companies.

Debt-to-Equity Ratio = Total Debt / Total Common Equity

2013:177,429 / 26,112 = 6.7949

2014:185,269 / 24,805 = 7.4690