Corporate Finance and Investment Managers - Math Problem Example

The Balance Sheet presents its financial position through the identification of agency assets, liabilities, and net position. The total assets increased from $71.5 billion in 2008 to $83.5 billion. The increase in total assets primarily was accounted for by the investments. The invests in non-marketable, special-issue Treasury securities balances held in the Unemployment Trust Fund. It did not experience major changes in liabilities during 2008. Liabilities totaled $20 billion at the end of 2008. Beginning in 2008, agencies were required to report earmarked non-exchange revenue and other financing sources, including appropriations. This was also required to report the portions of cumulative results of operations and unexpended appropriations on the face of the Balance Sheet. If it looked at normally distributed data on a graph, it would look something like this:

The x-axis (the horizontal one) is the value in question. And the y-axis (the vertical one) is the number of data points for each value on the x-axis.

Now, not all sets of data will have graphs that look this perfect. Some will have relatively flat curves, others will be pretty steep. Sometimes the mean will lean a little bit to one side or the other. But all normally distributed data will have something like this same "bell curve" shape.

The standard deviation is a statistic that tells how tightly all the various examples are clustered around the mean in a set of data. When the examples are pretty tightly bunched together and the bell-shaped curve is steep, the standard deviation is small. When the examples are spread apart and the bell curve is relatively flat, that tells a relatively large standard deviation.

It is for the annual interest rate for the investment. The actual rate of return is largely dependent on the type of investments you select. From January 1970 to December 2007, the average compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 11.4% per year (source: www.standardandpoors.com). During this period, the highest 12-month return was 61%, and the lowest was -39%. Savings accounts at a bank can pay as little as 1% or less.