Management Accounting Concepts and Formulas
Management Accounting:
The processes and techniques that focus on the effective and efficient use of organizational resources to support managers in their tasks of enhancing both customer value and shareholder value.Costing Techniques:
Methods of costing and their applications, covered in Weeks 1-8 of the ACCG2000 course.Using Costing for Decision Making:
Applying costing information to make informed business decisions, covered in Weeks 9 and 10 of the ACCG2000 course.Budget Setting and Evaluating
Sampling Methods in Research: A Comprehensive Guide
UNIT 5: Sampling – Concept and Classification
Population and Sample
Population refers to the entire group you want to gather information about (e.g., individuals, families, households). A sample is a subset of the population selected to represent the whole. Information gathered from the sample is used to make inferences about the population.
Sample selection is done through a process called sampling, which depends on the chosen research technique. A sample must be representative, meaning the characteristics
Read MoreBond Risks and Duration Management
Bond Risks
Interest Rate Risk
Interest rate risk (price risk) is the change in the market prices of bonds due to varying interest rates.
- Bond prices and interest rates are inversely related.
Reinvestment Rate Risk
Reinvestment rate risk refers to the uncertainty surrounding the rate at which interim cash flows (e.g., coupon proceeds) can be invested.
- The higher the coupon or holding period, the higher the reinvestment rate risk.
- If interest rates go down, your interest on reinvested interest will decline.
Heteroskedasticity in Linear Regression Models
LM-Stat (for testing join significance of independent variables)
Heteroskedasticity
Other large sample tests: The Lagrange Multiplier Statistics to test join significance of independent variables
Consider the model:
Explain the procedure of LM-test to test the null hypothesis that 
and 
have no effect on 
once the other factors have been controlled for.
The null hypothesis: 
.
Estimate the restricted model: 
. Get the residuals 
.
Regress
on 
. Get the 
.
Compute 
. Reject the null if 
Understanding Investment Returns, Margin, and Portfolio Optimization
Question 2
Consider the three stocks in the following table. Pt represents the price in time t, and Qt represents shares outstanding at time t. Stock C splits two for one in the last period.
P0 | Q0 | P1 | Q1 | P2 | Q2 | |
A | 120 | 400 | 135 | 400 | 135 | 400 |
B | 60 | 800 | 52.5 | 800 | 52.5 | 800 |
C | 135 | 800 | 150 | 800 | 75 | 1600 |
a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t = 1).
b. What must happen to the divisor for the price-weighted index in year 2?
c. Calculate the rate of return for the second period
Read MorePortfolio Management and Investment Analysis
Question 2
Consider the three stocks in the following table. Pt represents the price in time t, and Qt represents shares outstanding at time t. Stock C splits two for one in the last period.
P0 | Q0 | P1 | Q1 | P2 | Q2 | |
A | 120 | 400 | 135 | 400 | 135 | 400 |
B | 60 | 800 | 52.5 | 800 | 52.5 | 800 |
C | 135 | 800 | 150 | 800 | 75 | 1600 |
a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t = 1).
b. What must happen to the divisor for the price-weighted index in year 2?
c. Calculate the rate of return for the second period
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