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Course: MGMT 411, Winter 2011
School: Purdue
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Word Count: 351

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2: Lecture Quantitative Review - Addendum Quantitative Review: Returns on securities and portfolios Stats: means, variances, covariances, correlations, regressions BKM chapter 5 Readings: Part A - Outline: - How to measure returns? - for securities &amp; portfolios random variables, means, variances covariances and correlations - How do returns behave? - - How do returns move together? - Part B -...

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2: Lecture Quantitative Review - Addendum Quantitative Review: Returns on securities and portfolios Stats: means, variances, covariances, correlations, regressions BKM chapter 5 Readings: Part A - Outline: - How to measure returns? - for securities & portfolios random variables, means, variances covariances and correlations - How do returns behave? - - How do returns move together? - Part B - Outline: - How do returns move together? - regressions Correlation measures the association between two random variables. Both variables are treated equally. -> Association Regression is another measurement. It asks what we expect a variable Y to be given another variable X. -> Prediction -> Regression can also be used when there are (Xs) that seem to impact a particular Y variable. many factors Regression Univariate Regression: Yt = + X t + t Yt is the endogenous or left-hand-side variable e is intercept, is the regression slope Xt is the explanatory or right-hand-side variable t e is the regression error, shock, or residual We do not know the true values of or . We may estimate them by running a regression (e.g. in Excel) or the formulas below: = Y X XY = Y X Multivariate Regression than one explanatory Multivariate Regression: There can be more variables, rt = or Yt+1 = + b tX+ Z t + t + 1 1,t + 2 F2,t + 3 F3,t + F t Now there are multiple slope coefficients. There is no obvious graphical representation. Regression estimates must be calculated using a statistical software package or in Excel using the Analysis Toolbox. Regression Example: You are an analyst for a company called World. The chief strategist is predicting rSP500=10% for next year. What would you predict World to do the coming year? S&P500 Regression -> what is and ? Regression Excel regression output: rWORLD_STOCKS,t = + rUS_LCAP_STOCKS,t + t Regression Predicted Y: rWORLD_STOCKS,t = 0.0172+ 0.771rUS_LCAP_STOCKS,t So if rSP500=10%, then prediction rWORLD=
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Purdue - MGMT - 411
Lecture 1: IntroductionCapital Markets and Securities Trading Readings: BKM, Chapter 2 and Chapter 3Review: Financial markets are absolutely vital to the world (as we know it) Financial markets give access to capital Financial markets give opportunity
Purdue - MGMT - 411
MGMT41100 B.-H. Hwang Spring 2010Practice Problems #1 - Solutions 1. Toyota stock has the following probability distribution of expected prices one year from now:a) If you buy Toyota today for \$55 and it will pay a dividend during the year of \$4 per sha
Purdue - MGMT - 411
MGMT41100 B.-H. Hwang Spring 2010Practice Problems #2 - Solutions 1. You invest a total of \$100 in (1) a risky asset with an expected rate of return of 0.11 and a standard deviation of 0.21 and (2) a risk-free asset with a rate of return of 0.045. a) How
Purdue - MGMT - 411
Course Syllabus Krannert School of Management, Purdue University MGMT 41100 Investment Management Spring 2010 Rawls Hall 1057 (classroom) Prof. Byoung-Hyoun Hwang Krannert 540 (office) bhwang@purdue.edu (e-mail) http:/www.bhwang.com (website)This course
Purdue - MGMT - 411
Formula Sheet MGMT41100(Zero Dividend Growth Model)(Capital Allocation Line)(Capital Market Line)(CAPM)(Fama-French-3-Factor-Model)
Purdue - MGMT - 411
Lecture 2: Quantitative ReviewSolution SlidesSlides with problems have white background Slides with solutions have red background4/9/11Portfolio weights can be positive (a long position) or negative (a short position) Equity - pos: you buy/buy on marg
Purdue - MGMT - 411
Lecture 6: Market Efficiency The Efficient Market Hypothesis Empirical Evidence BKM chapter 8Readings:Efficient Market HypothesisPrices are (on average) rightd d Pt = Et t +1 + t + 2 2 + (1 + r ) (1 + r ) Investors use all available information in
Purdue - MGMT - 411
Lecture 4: Testing Asset Pricing Models Testing the Capital Asset Pricing Model (CAPM) Individual Investor BehaviorReadings:BKM chapter 711ReviewIn a world where the CAPM holds, which one of the following is not a true statement regarding the capit
Purdue - MGMT - 411
Lecture 6: Market Efficiency Limits to arbitrage Behavioral Theories BKM chapter 8Readings:Efficient Market HypothesisScenario: Fords fundamental value is \$20. Overly pessimistic investors push down the price to \$15. Our assumption has been that arbi
Purdue - MGMT - 411
Midterm 2 Review Session Course overview Sample problemsMidterm2:Tuesday, March 9 (PHYS114) Logistics: You have 1h 30 min Exam is closed book and closed notes (I will provide the formula sheet) Bring a calculator Others: Write answers on answer page D
Purdue - MGMT - 411
April 2, 2010MGMT411: Checklist for Special Topics I: Fixed Income-Basic concept + terminology + types of bonds How to price a bond (same discount rate for all coupon payments + face value; different discount rates for coupon payments + face value) Con
Purdue - MGMT - 411
Relevant Chapters for Special Topics III: Equity/Common Stock I believe the most relevant sections in BKM (8th edition) are: Section 12.6 12.7 Dont worry about industry life cycles and industry structure and performance 13.3 Just skim 13.4 Just skim Remem
Purdue - MGMT - 411
Purdue - MGMT - 411
Relevant Chapters for Special Topics II: Derivatives I believe the most relevant sections in BKM (8th edition) are: Section 15.1 Dont worry about option clearing corporation, other listed options 15.2 16.2 17.1 Remember that we also covered material that
Purdue - MGMT - 411
Formula Sheet MGMT41100(Stocks) (Spot Rate) (Forward Rate)(Bonds)For small interest rate changes: , where(Binomial)(Risk-neutral)(zero dividend growth model)(constant dividend growth model)(portfolio p consists of two assets: market portfolio + ri
Purdue - MGMT - 411
Special Topics IV-a: Financial Analysts &amp; Portfolio ManagersFinancial Analysts Mutual Fund/Pension Fund Managers Hedge Fund ManagersChapters: 18, 20 (8th edition of BKM) Solutions to examples [discussed in slides] will be posted on Katalyst-OverviewL
Purdue - MGMT - 411
Special Topics III: Equity - ContinuedMacroeconomic/Industry Analysis Equity ValuationChapters: 12-13 (8th edition of BKM) Solutions to examples [discussed in slides] will be posted on Katalyst 11-OverviewLecture Outline:-Macroeconomic and Industry
Purdue - MGMT - 411
Advanced Investment StrategiesClicktoeditMastersubtitlestyle1What is Pairs Trading?Pairs trading is one type of convergence tradeIt identifies two stocks such that the historical prices move together (or, should move together)If the stocks prices di
University of Hawaii, Manoa - POLS - 305
Grassroots Institute of HI Jones Act restrictions competition Interesting to find out Honolulus The Boat (the ferry) was subsidized by 97% Pork report = furlough Fridays Zoo budget 5.3 million How much taxes are taken out of packages? Group Informati
University of Hawaii, Manoa - POLS - 305
Each week review article; in book report talk about all the articles read 1 page outline for presentation (use powerpoint) and print out copy of powerpoint for teacher Know if people are participating in group because each person has a certain role To p
University of Hawaii, Manoa - POLS - 305
The Tale of Two Cities (book) by Dickenson Egypt what do you think? Basic fundamental rights: speech, contract, private property Inflation/hyperinflation Germany = rise of Nazis America life great until stock market crash Movie- The Battle of Ideas Reli
University of Hawaii, Manoa - HWST - 107
1. The name of the Gods in the Cook Islands are (4): Tu, Tane, Tanagroa, Rongo2. One of the of the offerings in the Cook Islands to their Gods are (4): Coconuts from favorite tree, 1st born child, 1st fish caught3. In Hawaii the 3 Gods that the Cook Isl
University of Hawaii, Manoa - HWST - 107
1. Where did the unearthing of 1,000 burial sites take place? Honokahua (Maui) 2. Why was the Honokahua area being dug up? To build a hotel and golf course3. How many islands were involved in the protest? 3:Oahu, Hawaii, Molokai, Maui4. What is the main
University of Hawaii, Manoa - HWST - 107
1. What was the code name of the Hydrogen (H) Bomb? BRAVO2. Half Life is the story of what Pacific Island Group? Marshall Islands3. How many Atomic and Hydrogen Bombs have been exploded in these islands? 664. Where was BRAVO first used and when? Bi
University of Hawaii, Manoa - HWST - 107
1. What is Aikapu? Sacred eating Men and women separated while eating (observed on the kapu nights of the 4 major male Akua) Women cannot eat = coconut and bananas are male sexual organs, red fish (used in sacrifices to the Akua) ; because were the kinola
University of Hawaii, Manoa - HWST - 107
1. What are the 3 regions in the Pacific Rim? Polynesia, Melanesia, Micronesia2. How many islands in the octapaligum? 138 islands3. Questions on board are questions for exam
University of Hawaii, Manoa - HWST - 107
1. What does Mea noeau mean? 2. Word Association A. Ahuula = feathered cloak B. Lei hulu = feathered lei C. Aesthetic = art that is beautiful, precious, human created D. Function = art Hawaiians use like leahili, hooks, tools, weapons E. Mea Noeau = combi
University of Hawaii, Manoa - HWST - 107
1. There are only 9 consonants in the Hawaiian language. 2. When did the first printing of Hawaiian occur? 1822 2 years after missionaries came3. To speak Hawaiian you must think Hawaiian 4. The way to communicate between plantation workers was called Pi
University of Hawaii, Manoa - HWST - 107
Grandparents and Niihu only could speak language Hawaiian schools closed because missionaries said only could teach English as medium language 1984 Kehaka = first school Make sure students ready to enter school Chant beginning chant (schools), chant wel
University of Hawaii, Manoa - HWST - 107
No human sacrifice before Alinui Ohana = family (most important) Mouka = high (mountains) ; kin = sea (get sweet potato, materials to build house) Water is very important Everyone has a spirit guide person that lived your family 2-3 centuries ago Women
University of Hawaii, Manoa - HWST - 107
1. What county is the island of Kahoolawe? Maui2. Name the highest point on Kahoolawe Puu Moaulani3. What is the directional point for navigation on Kahoolawe? Kealaikahiki4. Both Kahoolawe and LanaI was used as a Pinocolony Kahoolawe for men LanaI for
University of Hawaii, Manoa - HWST - 107
1976 canoe set out to Tahiti from HI Guided by Mal Pilon important because navigation by stars and waves; show people what ancestors knew Pacific Ocean largest then Earth combined Satawal 1 mile, feet above sea level Mau learned to navigate from father
University of Hawaii, Manoa - HWST - 107
1. How many islands is in the Hawaiian Archipelago? 138 islands2. Name the regions in the Pacific Rim Polynesia, Micronesia, Melanesia3. Who is the first Hawaiian scholar? David Melo4. Who is the first Hawaiian historian? Samuel Kamakau5. The names of
University of Hawaii, Manoa - HWST - 107
1. In what year did the Dutch voyagers see men catching sharks by hand? 16432. What is the name of the shark callers God? Moroa3. How did the shark caller know when to go shark calling? dreams4. What is the name of the village of the shark callers in t
University of Hawaii, Manoa - HWST - 107
Hawaiian language only in lands of HI Most Hawaiians cannot speak Hawaiian language Language (193-1987) not allowed in schools because US government 1987-could teach Hawaiian in schools before English Hawaiian immersion programs at schools Good to start
University of Hawaii, Manoa - HWST - 107
1. In Peles Appeal, this quote was said by whom? This energy of Geothermal belongs to a deity that has lived for hundreds of years and is very much alive, very much respected. Pualani Kanahele2. What is a native Hawaiians spiritual belief of Pele? Deity=
University of Hawaii, Manoa - HWST - 107
1. What is the name and rank of Umis father? Liloa, ruling chief2. Who was Umis mother? Akahi-a-Kuleana3. What was ka-lei-o-ku to Umi? attendant4. What was the gift from Liloa to Akaiti-Akuleana and her husband or raising Umi? Ahupuaa of Kealakaha5. W
University of Hawaii, Manoa - HWST - 107
1. In the Wayfinder, what is the most important star constellation for timing for landfall? Southern Cross2. Name the 3 course lines for Hokulea Presumed, reference, actual3. What was Maus visualizing lesson to Nainoa mean? Believe in your teacher and y
University of Hawaii, Manoa - HWST - 107
1. What was the Makaha in the Lokoia used for? Help circulate the water in the Lokoia; controlled the flow of water in and out of the Aha2. Why are Au wai systems so important to the LoI, besides watering? Circulate cold water around kalo plant3. What i
University of Hawaii, Manoa - HWST - 107
1. What is an Ahupuaa? Division of land that goes out to the sea2. What kind of water makes up walled Lokoia? Brackish water3. What is the most poplar fish raised in a Lokoia? Gray mullet4. The Department of a Lokoia was no more than 2 to 3 feet to all
University of Hawaii, Manoa - BLAW - 200
4/5 questions from each chapter 50 questions no cases know all terms Know: Sources of law In re estate of piper 4 types of gifts Civil and criminal rights Referendum Procedural vs. substantive Fruit of poisness tree doctrine Benefits rule Default judgemen
University of Hawaii, Manoa - BLAW - 200
Constitution Terms: Preamble Article 1 Article 2 Article 3 Article 4 Bill of rights Commerce clause Due process clause Equal protection clause Establishment clause Free exercise clause Full faith and credit clause Privileges and immunities clause Probabl
University of Hawaii, Manoa - BLAW - 200
Terms: Actionable Assault Battery Defamation Intentional tort Intentional affliction of emotional distress Libel Puffery Punitive damages Tort Tortfeaser
University of Hawaii, Manoa - BLAW - 200
Motion to Supress Exclusionary rule Fruit of the poisonous tree doctrine Tort of negligence 1. Duty of care is owed 2. Duty of care is breached 3. Proximate clause 4. Injury/damage caused Tort duties of landholders 1. Trespassers 2. Licensees 3. Social in
University of Hawaii, Manoa - BLAW - 200
Intellectual intangible personal property 1. Copyright 2. Patents 3. Trademark 4. Trade name 5. Trade dress 6. Trade secrets 7. Service name 8. Service mark Cannot use someone elses intellectual property but exceptions are: Public domain Fair use exemptio
University of Hawaii, Manoa - BLAW - 200
Defenses to criminal law 1. Infancy 2. Intoxication 3. Mistake 4. Consent 5. Duress 6. Justifiable use of force 7. Necessity 8. Entrapment 9. Statute of limitation 10. Immunity Mens Rea Intent Malice Willful and wanton (Gross) recklessness Gross negligenc
University of Hawaii, Manoa - BLAW - 200
Formation Bilateral Unilateral Formal Informal Express Implied in factPerforation Executed Excutory Enforceability Valid Voidable Unenforceable Void Quasi contracts Terms: Bilateral contract Contract Executed contract Express contract Formal contract Im
University of Hawaii, Manoa - BLAW - 200
Requirements of an offer 1. Serious intent 2. Reasonably complete 3. Offer must be communicated Acceptance requirements 1. Absolute 2. Unconditional 3. Communicated Terms: Acceptance Counteroffer Estop Mailbox rule Mirror image rule Offer Promissory estop
University of Hawaii, Manoa - BLAW - 200
Exception to consideration agreement 1. Equity 2. Promises to pay debts barred by a statute of limitations 3. Promise to make charitable contribution 4. Promises to pay debts discharged in bankruptcy 5. Merchants firm offer Terms: Accord and satisfaction
University of Hawaii, Manoa - BLAW - 200
Legal capacity 1. Age capacity 2. Mental capacity 4 exceptions where infant cannot disaffirm their contracts 1. Misrepresentation of age 2. Necessaries 3. If infant enlists in military 4. Marriage Terms: Adhesion contract Age of majority Blue laws Contrac
University of Hawaii, Manoa - BLAW - 200
Exceptions to the statute of frauds Doctrine of part performance Admissions Promissory estoppel/detrimental reliance UCC specialty manufactured goods Main purpose rule Statutes of fraud Interest in land Take more than 1 year to perform Originally Particul
University of Hawaii, Manoa - BLAW - 200
Discharge list 1. Discharge by performance 2. Conditions precedent 3. Conditions subsequent 4. Failure of a concurrent condition 5. Material breach of contract 6. Discharge by recission 7. Discharged by novation 8. Discharged by a substituted agreement 9.
University of Hawaii, Manoa - BLAW - 200
Julias Child Recipe 1. Offer 2. Acceptance 3. Mutual legal consideration 4. Contractual capacity 5. Legal subject matter 6. Signed writing Terms: Choice of law clause Course of dealing Course of performance Merchant firm offer Lease agreement Lessee Lesso
University of Hawaii, Manoa - BLAW - 200
Identification of goods Title vs. risk of loss + insurable interest Contract terms FOB FAS CIF Terms: Destination contact Document of title Fungible goods Good faith purchases Identification Shipment contract Insurable interest
University of Hawaii, Manoa - BLAW - 200
Gifts Testamentary Intestate Gift intervivos Gift causa mortis 3 requirements for the 4 gifts to be binding 1. Donative intent 2. Delivery 3. Acceptance Terms: Abandoned property Bailee Bailment Bailer Chattel Fixture Gift Misland property Real property
University of Hawaii, Manoa - BLAW - 200
Concurrent ownership forms 1. Tenants in common 2. Joint tenants 3. Tenancy by the entirely Ownership interests: Fee simple absolute L ife estate Concurrent issues Types of property Mislaid property Lost property Abandoned property Stolen property Borrowe
University of Hawaii, Manoa - BLAW - 200
T he Sources of Law 1. Constitutions 2. Statutes 3. Treaties 4. Case Law/Precedent/Stare Decisis (same meanings) 5. Executive Orders 6. Administration Rules and Regulations 7. Contracts 8. Ini tiative 9. Referendum 10. Common law 11. Equity 12.Hawaiian cu
University of Hawaii, Manoa - BLAW - 200
Basic differences in the traditional forms of ADR Negotiation Mediation arbitration Jurisdiction Personal jurisdiction Property jurisdiction Subject matter jurisdiction Original jurisdiction Appellate jurisdiction Federal jurisdiction Exclusive jurisdicti