Michelieu tells a prospective client, "I may not have a long-term track record yet, but I'm sure that you'll be very pleased with my recommendations and service. In the three years that I've been in the business, my equity-oriented clients have averaged a total return of more than 26 percent a year." The statement is true, but Michelieu only has a few clients and one of his clients took a large position in a penny stock (against Michelieu's advice) and realized a huge gain. This large return caused the average of all of Michelieu's clients to exceed 26 percent a year. Without this one investment, the average gain would have been 8 percent a year.
Has Michelieu violated the Standards?

If a consumer purchases a refrigerator (a durable goods) which costs $1,000. The retail store makes a
$ 50 profit out of the transaction. The refrigerator is expected to last for 10 years. The GDP should be added by:

Last year, Company X sold $590,000 on account. The company estimated that 3 percent of sales on account would become uncollectible. During the year the company wrote off $29,000 of uncollectible accounts receivable. What should the bad debt expense be last year?

A discrete uniform distribution is defined over the range, X = 2 to 6. What is the cumulative probability that the observations 4, 5 and 6 will be observed?

A project has the following annual cash flows:
CF = 24,000; CF = 12,700; CF = 15,000; CF = -10,000
1 2 3 4
What is the maximum amount a firm should invest in the project if it requires a risk adjusted, 12% rate of return?