midsamp - University of California Berkeley Haas School of...

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1 University of California - Berkeley Haas School of Business UGBA 103 Sample Midterm Instructions: This is a 1.5 hour closed book and closed note exam, though you may refer to notes on one side of a 3” x 5” index card. There are a total of 120 points. You may use a calculator, but no computers are allowed. Show all your work. Write down any equation you are using to allow us to provide as much credit as possible. This test contains 7 pages. The last question is #6 . All answers should be written in the space provided under each question. Jargon section: (6 minutes, 10 points) In the space provided below write a brief (one or two sentence) definition or explanation for each of the following terms: Preferred Stock: Real interest rate: Convertible bond: Dividend yield: Discount factor:
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2 Problem Section: 1. 5 minutes, 10 points ( No partial credit! ) You have the following information Year Cash Flow Spot Rate for the Year (end of year) 1 C 1 r 1 2 C 2 r 2 3 C 3 r 3 Write down an equation giving the present value of these three cash flows. 2. 12 minutes, 15 points If the annual percentage rate (APR, compounded monthly) is 12%, what is the present value today of an instrument paying $10 every 6 months, with the first payment two years from today and tbe last payment 6 years from today? (In other words, the instrument makes no payments during its first 2 years.)
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midsamp - University of California Berkeley Haas School of...

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