Ch 2 - Risk and Return

Ch 2 - Risk and Return - Chapter 2 Risk and Return Part I...

Info icon This preview shows pages 1–3. Sign up to view the full content.

Chapter 2 Risk and Return: Part I ANSWERS TO BEGINNING-OF-CHAPTER QUESTIONS Our students have had an introductory finance course, and many have also taken a course on investments and/or capital markets. Therefore, they have seen the Chapter 2 material previously. However, we use the Beginning of Chapter (BOC) questions to review the chapter because our students need a refresher. With students who have not had as much background, it is best to go through the chapter on a point-by-point basis, using the PowerPoint slides. With our students, this would involve repeating too much of the intro course. Therefore, we just discuss the questions, including the model for Question 6. Before the class, we tell our students that the chapter is a review and that we will call on them to discuss the BOC questions in class. We expect students to be able to give short, incomplete answers that demonstrate that they have read the chapter, and then we provide more complete answers as necessary to make sure the key points are covered. Our students have mainly taken multiple-choice exams, so they are uncomfortable with essay tests. Also, we cover the chapters they were exposed to in the intro course rather quickly, so our assignments often cover a lot of pages. We explain that much of the material is a review, and that if they can answer the BOC questions (after the class discussion) they will do OK on the exams. We also tell them, partly for motivation and partly to reduce anxiety, that our exams will consist of 5 slightly modified BOC questions, of which they must answer 3. We also tell them that they can use a 4-page “cheat sheet,” two sheets of paper, front and back. They can put anything they want on it—formulas, definitions, outlines of answers to the questions, or complete answers. The better students write out answers to the questions before class, and then extend them after class and before the exams. This helps them focus and get better prepared. Writing out answers is a good way to study, and outlining answers to fit them on the cheat sheet (in really small font!) also helps them learn. We try to get students to think in an integrated manner, relating topics covered in different chapters to one another. Studying all of the BOC questions in a fairly compressed period before the exams helps in this regard. They tell us that they learn a great deal when preparing their cheat sheets. We initially expected really excellent exams, given that the students had the questions and could use cheat sheets. Some of the exams were indeed excellent, but we were surprised and disappointed at the poor quality of many of the midterm exams. Part of the problem is that our students were not used to taking essay exams. Also, they would have done better if they had taken the exam after we covered cases (in the second half of the semester), where we apply the
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

text material to real-world cases. While both points are true, it’s also true that some students are just better than others.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern