Essay on Assignment 1

a. Calculate the expected return over the 4-year period for each of the three alternatives.

a. I = 4%, PV = $74,000, N = 20, FV = $162,143 b. FV = $2 million, N = 25, I = 8%, PMT = $27,357 c. PMT = $160,000, N = 20, I = 4%, PV = $2,174,452 d. FV = $3.5 million, N = 30, I = 7%, PMT = $37,052

Confounding variables were vastly differing, but usually fell within a couple of generalizable groups. Some confounding variables were population based being that the size was too small, too healthy, the population geographical background was not diverse enough for accurate results, and the level of knowledge of the test population was not representative of the public. One big confounding variable that I did see was that in some of these studies the variables were too controlled, the randomization was not double blinded leading to research influenced bias, and the results lacked generalizability. However, for some of these areas studied in this presentation, the research was primary research and there was not a vast amount of previously done studies to contribute to a cohort type of study.

– I estimate that the amount needed upfront to reach 1 million dollars at the retirement age of 60 is $139,000, with a monthly contribution of

d. If you do not earn any return on the investment during that first year, how much will you have saved in total in your 401K account (counting your employer contribution and your contribution)?

The drug corporation place profit above human life while the drug cause complexion of issues relates clinical data on Avandia with a bias report that the medication was safe. Consequently, the Avandia drug many adverse side effects that were generating heart trouble and death to the many of the diabetic patients taking the drug. Therefore, we will learn how the first step in research is essential that there is no bias and that the formulation of the investigation will determine failure or success, the drug companies imply that the study is valid as true, without proof that leads to bias in the pharmaceutical companies that are manufacturing medicinal drugs. The Know bias that I, as a customer how the drug industry money influences over research.

There is much bias in the drug industry’s influence over the research. Further, there is much influence of drugs on research but still some are trying to overcome the bias. Drug companies run the drugs on trial basis which becomes more important in the market and influence the market negatively. Further, those drugs which are sponsored by some advertisements, one comes to know that advertisements of the drugs influence the people and does not allow them to carry out the real research on drugs.

Furthermore, the article explores deeply how these pharmaceutical companies abuse power by funding drug trials and their influence to produce an outcome as per their requirements. The writers of this journal, to affirm the credibility of their information

Question 6. Many drug safety research studies are sponsored by pharmaceutical companies that would financially benefit if the results of the study are favorable. Is this an example of a potential confounding factor?

10. (Q. 14 in B) The profitability index for a project costing $40,000 and returning

Comparing the 80/20 ratio with the 65/35 ratio, the initial investment with the 65/35 ratio will be higher with 3.2 million dollars. Under the same interest rate and amortization terms of 6.95% over 25 years, the investment with the 65/35 ratio will yield a positive income on the fourth year. The financial analysis shows that with the 65/35 ratio it will yield positive income a year before the 80/20 ratio. The cash flow and present value under the 65/35 ratio are generally better than the 80/20 ratio. However, the net present value of 80/20 has $2 million dollars more than the 65/35 ratio after 5 years of operation. The 65/35 ratio is recommended based on the five year financial analysis, because it will have a better net present value and also have positive income in year four of operation.

The other expected return cannot be determined unless one is looking at other markets and how much return one can achieve in those markets. I liken this to someone owning a home. It is very typical for a homeowner to want to buy a house when the market is low and then make a profit. Most individuals do take out mortgages in order to carry out such a large investment. During the

Sharon Smith, the financial manager for Barnett Corporation, wishes to evaluate three prospective investments: X, Y, and Z. Sharon will evaluate each of these investments to decide whether they are superior to investments that her company already has in place, which have an expected return of 12% and a standard deviation of 6%. The expected returns and standard deviations of the investments are as follows:

In the article “Research Accountability Is Needed to Counteract Industry Subterfuge”, the author Gretchen Goldman claims that studies funded by corporations creates unreliable research. Goldman shows her audience that the sugar industry paid Harvard researchers to produce research that wouldn’t put the sugar industry in a bad light. Goldman uses this as evidence to make the point that corporations often put pressure on scientists to produce unreliable work. Goldman

b) Given the price and the yield to maturity of the bond, calculate the three components of the (expected) total return of this investment (if you invest 100