Which of the following possible values of alpha would cause exponential smoothing to respond the most slowly to sudden changes in forecast errors?
A) .01
B) .50
C) .90
D) 3.14
Answer: A
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An investment strategy restricts the portfolio to a mix of two stocks A and B with the following price/share and annual returns:
Stock Price/Share Annual Return A $35 5% B $45 7% Assume that the maximum amount available for investment is $100,000 with the following 2 prioritized investment goals: Rank R1: Obtain an annual return of at least 6%. Rank R2: Limit the investment in stock B to no more than 55% of the total investment. Assume X1 = dollar amount allocated to stock A, and X2 = dollar amount allocated to stock B. What is the objective function? A) Min d1+ + d2- B) Min R2(d1+) + R1(d2-) C) Min R1(d1-) - R2(d2+) D) Min R1(d1+) + R2(d2-) E) Min R1(d1-) + R2(d2+)
A comparison of a firm's current financial ratios to those of prior years allows one to
A) accurately predict the future performance of a firm. B) see how a firm's performance compares to that of a competitor. C) see trends that are developing. D) determine if the firm is performing better than the overall industry.