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30 Pages

### 722Ch5

Course: FINANCE 722, Winter 2012
School: Ohio State
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Word Count: 1307

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5 Risk Chapter and Return: Past &amp; Prologue Measuring Past Returns One period investment: regardless of the length of the period. Holding period return (HPR): HPR = (PS PB + CF)/PB where PS = Sale price (or P1) PB = Buy price (\$ you put up) (or P0) CF = Cash flow during holding period 5-2 Measuring Past Returns An example: Suppose you buy one share of a stock today for \$45 and you hold it for two...

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Ohio State - FINANCE - 722
Chapter 6Efficient DiversificationTwo-Security Portfolio: ReturnE(rp ) = W1 r1 + W2 r2W1 = Proportion of funds in Security 1W2 = Proportion of funds in Security 2r1 = Expected return on Security 1r2 = Expected return on Security 2nE(r p ) =W r ;
Ohio State - FINANCE - 722
Chapter 7Capital Asset Pricing Model &amp;Arbitrage Pricing TheoryCapital Asset Pricing Model(CAPM)Equilibrium model that underlies all modern financial theoryDerived using principles of diversification, but with othersimplifying assumptionsMarkowitz,
Ohio State - FINANCE - 722
Chapter 8Efficient Market HypothesisEMH and CompetitionCompetition among investors should imply that stockprices fully and accurately reflect publicly availableinformation very quickly. Why?Else there are unexploited profit opportunities.Once infor
Ohio State - FINANCE - 722
Chapter 10Bond Prices &amp; YieldsBond CharacteristicsFace or par valueCoupon rateZero coupon bondCompounding and paymentsAccrued InterestIndenture10-2Treasury Notes and BondsT Note maturities range up to 10 yearsT bond maturities range from 10 to
Ohio State - FINANCE - 722
Chapter 11Managing Bond PortfoliosInterest Rate Sensitivity1. Inverse relationship between bond price andinterest rates (or yields)2. Long-term bonds are more price sensitive thanshort-term bonds3. Sensitivity of bond prices to changes in yieldsin
Ohio State - FINANCE - 722
Chapter 13Equity ValuationFundamental Stock Analysis:Models of Equity ValuationBasic Types of ModelsBalance Sheet ModelsDividend Discount ModelsPrice/Earnings RatiosFree Cash Flow Models13-2Models of Equity ValuationValuation models using compa
Ohio State - FINANCE - 722
Chapter 14inancial Statement AnalysisIncome StatementFour broad types of accounts:Cost of goods soldGeneral and administrative expensesInterest expenseTaxes on earningsCommon Size income statementsDivide each account by net salesEliminates size
Ohio State - FINANCE - 722
Chapter 15Options MarketsOption TerminologyWhat is a listed call option?A contract giving the holder the right to buy 100 sharesof stock at a preset price called the exercise or strikeprice.Expirations of 1,2,3,6,&amp; 9 months and sometimes 1 yearare
Ohio State - FINANCE - 722
Chapter 17Futures Markets and RiskManagementFutures and ForwardsForward - an agreement calling for a futuredelivery of an asset at an agreed-upon priceFutures - similar to forward but has standardizedterms and is traded on an exchange.Key differen
Columbus State Community College - ANTH - 200
Chapter 7The Human SpeciesOverview Humans share many features with the other hominoids, but also exhibit a number of differences. In addition, humans have a growth pattern that differs from other primates in its extended childhood andadolescent growt
Columbus State Community College - ANTH - 200
Jun Ma Section: WEB 22895Part One (TFY)For each the statements below tell me if it is true or false; then explain why based upon the ideas from the book or other source material.Each answer should be about a paragraph.1. Humans will evolve into a be
Columbus State Community College - ANTH - 200
Jun Ma WEB 15326Phase I: Primates Through TimePhase 1: Part One: After the K/T extinctionPaleocene(I am using your answers for this part)What was the time span of this epoch?The Paleocene began 65.5 million years ago. It ended 58.8 million years ago
Columbus State Community College - ANTH - 200
Jun Ma WEB 15326Phase I: Primates Through TimePhase 1: Part One: After the K/T extinctionPaleocene(I am using your answers for this part)What was the time span of this epoch?The Paleocene began 65.5 million years ago. It ended 58.8 million years ago
Columbus State Community College - ANTH - 200
Jun Ma, WEB 15326Introduction and CautionsPhase 1: Our Place in NaturePhase 1: Question 1: Naming AnimalsHumans*Bonobos 1AnimaliaAnimaliaPhylumChordataChordata Chordata Chordata Chordata Chordata Chordata ChordataClassMammalia Mammalia Mammali
Ohio State - FINANCE - 741
Business Finance 741Life and Health Risk ManagementWinter 2012PROBLEM ASSIGNMENT 1DirectionsYou work for Woodruff Products, a large industrial company. You have been tasked bythe companys CFO to prepare a series of short reports (memoranda). Each re
Ohio State - FINANCE - 741
Introduction toAnnuity ContractsAnnuityBusiness Finance 741Winter 2012AnnuitiesAnnuitiesDefinition and Purpose An insurance contract that promises to make aseries of payments: for a fixed time period, or over a persons lifetime. Annuities addr
Ohio State - FINANCE - 741
Business Finance 741PROBLEM ASSIGNMENT 2Winter 2012DirectionsAnswer each of the following questions and organize your answers into a written report.Your report should not exceed two (2) letter-size pages (typewritten on one side of thepage only, sin
Purdue - IE - 336
Homework Set #1 SolutionsIE 336 Spring 20121. Let S denote the sample space. If events Bi partition the sample space, then:S = B1 B2 Bn If A is an event from the sample space, then A can also be expressed as:A= AS = A (B1 B2 Bn ) = (A B1 ) (A B2 ) (A
Purdue - IE - 336
Homework Set #2 SolutionsIE 336 Spring 20121. (a) Let X equal number of good chips that appear. Then, X Binomial(n, p), where n &gt; 1000 and p = 2/5. Since n is sufficiently large, the binomial distribution can be approximated using a normal distribution,
Purdue - IE - 336
Homework Set #3 SolutionsIE 336 Spring 20121. From HW1, we know that fX (x) = 2ex - 2e-2x , 0 x &lt; and fY (y) = 2e-2y , 0 y &lt; . Determine E(Y ): Y exp(2). Therefore, E(Y ) = Determine E(X): E (X) = =0 1 = 1. 2xfX (x)dxx x 2e-x - 2e-2x dx 2xe-x dx -
Purdue - IE - 336
Homework Set #4 SolutionsIE 336 Spring 20121. (a) Let cfw_1, 2, 3 represent the states of the Markov chain.Figure 1: Transition Diagram for Problem 1a (b) Determine p, q, and r. q 32r + 3p += = = =1 1 1 6r3q q +r+ + 2r 8 8 q r + 6p + 6 q2Solving t
Purdue - IE - 336
Homework Set #5 SolutionsIE 336Spring 20121. (a) p, q , and r can be determined by solving the matrix form of the system of equations:121/2 2p14/3 q = 13r124/31Solving yields p = 1/4, q = 1/8, and r = 1/4.(b) Using the values of p, q ,
Purdue - IE - 336
Homework Set #6 SolutionsIE 336 Spring 20111. (a) p = 1/4, q = 1/8, r = 1/4. Transition diagram omitted. 2q P = 3r 6q (b) Given p(4) = 0.6 0.3 rp 2 2p 3 2p 1/4 1/4 q = 3/4 1/8 r 3/4 1/6 3 1/2 1/8 1/120.1 , the vector at time step 8 is:p(8)= p(4) P
Purdue - IE - 336
Homework Set #8 SolutionsIE 336 Spring 20111. (a) To estimate the mean time, let nij be the number of transitions from i to j, and let Tij (k) be the kth observed value of a transition time from i to j: nij E(Tij ) E(T12 ) E(T21 ) k=1Tij (k)nij 3+2+4
Purdue - IE - 336
Homework Set #9 SolutionsIE 336 Fall 20111. (a) Determine the steady-state probabilities. Since each row in a transition probability matrix must equal 1: 7 4 7 1 - e-11t = + e-11t 11 11 11p11 (t) = 1 - p12 (t) = 1 -Using the definition of steady-state
Purdue - IE - 336
Homework Set #10 SolutionsIE 336 Fall 20111. (a) This is the M/M/1 queue. The transition diagram is shown in Figure 1.Figure 1: Transition Diagram for Problem 1a (b) If there are 5 customers in the queue at steady-state, then there must be 6 customers
Purdue - IE - 330
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Purdue - IE - 330
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Name: _ 5 May 2006 IE330 Spring 2006 Final Exam #2 No calculators, closed book, closed notes. Do not tear off any pages.1 of 18Name: _1. (TRUE or FALSE) To estimate the arithmetic mean of a population by taking a sample from that same population, the d
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Purdue - IE - 383
Problem 5Assuming all jobs were released at the same time (rj = 0). Breaking ties rule: select the job with the lower value of job code. a) SPT Dispatching Rule Sequence:Job pj dj D 3 18 B 6 12 A 8 10 E 12 22 C 15 20Jobs Measures Job Cj Lj Tj Ej Uj D 3
Purdue - IE - 383
17-18. Breaking ties rule: select the job with the lower value of job code. As quick as soon as possible: Cmax Objective Machine environment: Flowshop, two machines: F2Cmax Scheduling Problem. Using Johnson's Rule to determinet a SPT(1)-LPT(2) Schedule y
Purdue - IE - 383
Purdue - IE - 383
17-9Assuming all jobs were released at the same time (rj = 5), since now: tNOW = 5. Breaking ties rule: select the job with the lower value of job code. SPT Dispatching Rule Sequence:Job pt dt D 3 20 H 3 50 A 5 10 C 6 15 G 7 45 B 8 15 E 10 25 F 14 40Jo
Purdue - IE - 383
17-6Assuming all jobs were released at the same time (rj = 0).Breaking ties rule: select the job with the lower value of job code.FCFS Dispatching RuleSequence:JobpjdjABCDEF23124123448510Jobs MeasuresJobCjLjTjEjUjABCDE
Purdue - IE - 383
IE 383 Integrated Production Systems Spring 2012HW 10: Scheduling Due: TBAProblem 17-6 As in the textbook. Problem 17-9 As in the textbook. Problem 17-14 a) As in the textbook. b) Evaluate (i) Average Flowtime and (ii) Utilization of the Polishing Depar