Question:

Please help me answer the following. Choose the correct answer and include explanations.

1. Mr. A purchased a 9-day treasury bill. It was issued 2 days before the national election. Suppose that after the election, people went to EDSA to protest the results of the election, will this render his investment to become a speculative investment?

A. Yes because there is so much political instability

B. No because he voted wisely

C. Yes because the economy will be severely affected by the political instability

D. No because the return of investment is risk-free

2. Ms. Y purchased 100 million worth of common stocks issued by Company X, a family owned corporation; not-publicly listed. One day, Ms. Y learned from a national newspaper that the children of the corporate patriarch quarreled about their shares of the corporation. The father sued the erring child, causing divisions in the family. Will this render the investment of Ms. Y a speculative investment?

A.No because the issuer is not publicly listed

B. Yes because the issuing company is a family corporation

C. No because the father will later on forgive the erring child

D. Yes because this is an example of a risky corporation so vulnerable to the whims of the owners

3. Mr. Z browsed the web and saw this ad from a publicly listed corporation in the Philippine Stock Exchange "invest in our stocks, it will double in just 3 days". He invested 50 million. Will you consider his investment an example of a speculative investment?

A. No because there was no speculation at all

B. Yes because the ad was so speculative

C. No the terms of speculation should not come from the seller but from a buyer

D. Yes because he just saw it without fully thinking about it

4. Ms. H purchased 30 million worth of stocks from AAA Corporation which offered its shares thru private placement. Realizing that the corporation has a goodwill, she bought all the remaining shares. This created panic among prospective buyers of the said shares causing the stock price to hike too high the next day. Seeing this as an opportunity to earn, Ms. H sold all her shares. The trading price was 5 times higher than the purchase price. Is this an example of speculative investment?

A. Yes because her act of buying all the shares created so much speculations in the market

B. No because it was thru private placement

C. Yes because she is a businesswoman

D. No because her motive was not speculative

5. Mr. Y purchased 20 million worth of common shares (thru private placement) issued by Way Klaro Corporation. This company is the producer of miracle juice named MJ which promised to restore the youth of any user, and will prolong his/her life up to 200 years. Will you consider Y's investment a speculative investment?

A. Yes because the issuer is a dignified corporation

B. No because his shares is only 5% of the total shares issued thru initial public offering

C. Yes because his profit is vulnerable to the ups and downs of the company

D. No because the issuer is not a publicly listed corporation

6. Two friends A and B quarreled over this matter. Mr. A insisted that speculative investments can only occur when buying common shares issued by neophyte corporations. Mr. B on the other hand argued that speculative investments take place either by buying shares from a new corporation or from an established firm for as long as the intention of buying is to gain thru short span of time. Who is correct?

A. Mr. A

B. Mr. B

C. Both of them

D. None of them

7. Ms. L purchased bonds issued by Alaya Land Incorporated. The bond matures in 10 years, it has a 10% coupon and was sold at a discount (5%). Will you consider her choice a speculative investment?

A. Yes because buying the bonds at a 5% discount indicates that the issuer is desperate for a sale

B. No because the return is certain

C. Yes because Alaya Land Incorporated is the great rival of Ayala Land Incorporated

D. No because bonds are convertible to stocks

8. ML purchased 10 million worth of common shares issued by Counter Strike Corporation. He was prompted to buy because he learned that the company will soon diversify and will produce VCO vaccine which was proven to cure AIDS and Ebola. Series of test proved this claim to be true and WHO certified the company. Is this an example of speculative investment?

A. No because Ebola and AIDS have no known cure

B. Yes because the company heads towards prosperity

C. No because the claim of the company was a mere speculation

D. Yes because when the company earns so much profit, it will donate money to charitable institutions

9. President Rod Du40 publicly announced his indifference about ASB NBC, a giant television network. Because of his satire words, the price of the shares of stocks of this corporation dropped from 100 pesos per share to 2 pesos per share. Mr. Q consider the plunge of the stock price as an opportunity, hence he purchased 30 million worth of stocks. Is this an example of a speculative investment?

A. No because Du40 is a very powerful president

B. Yes because Mr. Q predicted that Du40 will soon be impeached, thus the network will regain its fame

C. No because the intention of Q is to help the network which aired his famous teleserye "Ang Taga Province No?"

D. Yes because Q anticipated that the stock price will continue to drop up to 50 cents per share

10. Ms. M deposited all her earnings to IPB Bank thru a time deposit which matures in 5 years. The lock-in interest is 5% per annum. Is this an example of speculative investment?

A. Yes because 5 years is too long, many things can happen along the way

B. No because there is no uncertainty as to the return

C. Yes because inflation may be higher in 5 years time

D. No because IPB is a charitable institution

11. Ms. N is a political analyst. She predicted that in 2022, Mr. Money Inadlaw will become the next president. This will also cause economic commotion and turmoil thus making Philippine peso weaker than the US dollar. Based on that forecast, how will you speculate if you wish to hold US dollar then later exchange it to peso?

A. Exchange your US dollar to peso while the exchange rate is favorable

B. Buy more US dollar then exchange it to peso during the term of President Inadlaw

C. Buy more peso now and exchange it to dollar during the term of President Inadlaw

D. Do not do anything because Ms. N is not a prophet

12. Through intensive research, you learned that next month, US will declare war against Palestine because USA is a loyal friend of Israel. The forecast of financial experts also made you realized that when USA declares war against Palestine, US dollar will become weaker against the Philippine peso. If you wish to speculate out of this scenario, what will you do?

A. Buy more dollars now and exchange it to peso next month

B. Pray that Israel and Palestine will enter into peace treaty

C. Rush to money changer and exchange your US dollar to peso

D. Stop watching TV especially CNN and BBC because these networks keep on broadcasting the present hostility in Gaza strip

13. You learned from a government website that the Philippines is doing well in export and few traders engaged into importations. Government authorities claimed that if this trend will continue, peso will become stronger than the US dollar. Based on this information, how will you apply currency speculation?

A. Buy more US dollar now then exchange it to peso next month

B. Buy more US dollar now then exchange it to peso 10 days from now

C. Exchange my US dollar to peso while it is still favorable

D. Exchange my US dollar to peso while the peso is still stronger than the US dollar

14. Based on the information in number 13, what if Mr. U, the child of an OFW working in the USA wanted to speculate, what must be done?

A. Ask his parent to come home because COVID 19 cases is rampant in the United States of America

B. Tell his parent to send more US dollar now while the exchange rate to peso is still beneficial to Mr. U

C. Tell his parent to hold more dollars, then send it to the Philippines when peso becomes stronger than the dollar

D. Ask his parent to stop sending Nike shoes and textile because his friends in school became so envious

15. Based on the correct answer in number 14, Mr. U should be branded as ______ kind of speculator.

A. Bullish

B. Bearish

16. What is the main tool employed by speculators?

A. Prophecy

B. Faith

C. TV and newspaper

D. Information

17. Mr. T speculates about the price movements of the shares of stocks of GMA 9. Mr. W is also speculating on the same stocks. Will they arrive at the same amount of price forecast?

A. Yes

B. No

C. The information in this problem is incomplete that is why it is hard to provide an accurate answer

D. None of the above

18. All speculator gain profit because they hold privilege information. True or False?

10) The profit from the expenditure of x thousand dollars on advertising is given by P(x) =700 + 15x - 2x2. Find the marginal profit when the expenditure is x = 9. P(x)= What is the marginal profit when $9,000 is spent on advertising? Will the company make money or loose money from this expenditure?-rana Salamova PART Ill - Problems ABC health currently uses zero debt financing. Its operating profit is $2 million and its tax rate is 30%. If it has $10 million in assets which are financed entirely by equity. Suppose the form is considering replacing half if its equity financing with debt financing that bears an interest rate of 10%. a. What is the impact of the new capital structure on the firm's profit, total dollar return to investors and the return on equity? Show both cases with all equity and financing and half equity financing. Consider the following net cash flows: Cash Flow Year O 400 OHN 400 600The following graph shows the demand (), marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves of a monopolistic competitor. Place the grey point (star symbol) on the graph to indicate the profit-maximizing price and quantity for this monopolistic competitor. If the monopolistic competitor is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if the monopolistic competitor is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. 100 90 Monopolistic Competition Outcome 80 70 Profit 60 50 PRICE (Dollars) ATC 40 Loss 30 D 20 MC MR 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Units)