Finance

1. Discuss the performance of the composite index of leading indicators as a barometer of business activity in recent years

2. What is the present position of the business cycle? Is it expanding or contracting? When will the next turning point occur?

AT&T (American Telegraph and Telephone) earnings in billions of dollars are estimated using GNP (gross national product). The regression equation is where GNP is measured in billions of dollars.

a. Interpret the slope.

b. Interpret the Y-intercept.

A large resort near Portland, Maine, has been tracking its monthly sales for several years but has never analyzed these data. The resort computes the seasonal indexes for its monthly sales.Which of the following statements about the index are correct?

a. The sum of the 12 monthly index numbers, expressed as percentages, should be 1,200.

b. An index of 85 for May indicates that sales are 15% lower than the average monthly sales.

c. An index of 130 for January indicates that sales are 30% above the average monthly sales.

d. The index for any month must be between zero and 200. e. The average percent index for each of the 12 months should be 100.

Solution:

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