StudyGuideMid2.doc - FIN 300(prof Sacks Midterm Study Sheet...

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FIN 300 (prof. Sacks) - Midterm Study Sheet All topics: Study what it is and how it works. If topics contain equations – be sure to be able to apply them. If topics include graphs – be sure you understand them and can reproduce them. Chapter 6: A. Types of Annuities (graph B. Present/Future Value of Annuities (calculation C. Amortization Schedule (calculation and concept The value at the beginning is the ending value of the last year
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Chapter 7: A. Total return (calculation Investment P0 = $100 P1 = $97 Dividend = 0 TR = (P1 – P0 +D) / P0 TR = (97 -100 + 0) / 100 = -3 / 100 = -3% B. Expected return (calculation States of the world P return Good 60% r=15% Bad 40% r =2% Expected return R = 0.6 * 0.15 + 0.4 * 0.02 = 0.098 = 9.8% C. Variance / Standard deviation or returns (calculation 2) Good: 0.15 -0.098 = 0.052 Bad: 0.02 – 0.098 = -0.078 3) (0.052)^2 = 0.0027 (-0.078)^2 = 0.0061 4) Good: 0.6 * 0.0027 = 0.00162 Bad: 0.4 * 0.0061 = 0.00244 5) Variance : 0.00162 + 0.00244 = 0.00402 Standard Deviation : 0.00402 的平方根 = 0.0634 = 6.34%
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D. Geometric average return (calculation R2015 = 13% R2016 = 8% R2017 = 17% Rg = ((1.13 * 1.08 * 1.17)^ (1/3)) - 1 = 1.4278^ (1/3) – 1 = 1.1261 -1 = 0.1261 = 12.61% E. Correlation coefficient (concept Correlation coefficient [-1, +1] +1: positively correlated
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  • Fall '08
  • Olander
  • Par Bond, PVD1

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