summer 09 - Family name comma personal names Your student...

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ACT245H1F Test July 31, 2006 Privacy Code A for web v11.doc Page 1 out of 8 Family name, comma, personal names:_______________________________ Your student ID:_________________________________________________ UNIVERSITY OF TORONTO Faculty of Arts and Science ACT245H1F SUMMER 2006 TEST 2 Duration – 50 Minutes Aids: All calculators allowed Instructor: Keith Sharp PhD FSA NOTES: 1. Calculators allowed 2. Scrap paper is to be handed in with this book. It’s OK to write on book. 3. This is a closed book exam. 4. Multiple choice: only your letter answer mark sense sheet will be graded. 5. Each question: 10 points correct, two if blank, zero points if wrong 6. So expectation if you guess is the same as leaving a blank. 7. Timing: 50 minutes 8. Make sure you’ve indicated your letter answers on the mark sense sheet before time’s up 9. Please stay in your seats and don’t talk till all question papers and mark sense sheets have been collected. 10. Photo ID on desk during exam. 11. Name and student ID on this question paper and on mark sense sheet please. 12. Good luck!
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UNIVERSITY OF TORONTO: ACT245H1F TEST 2, JULY 31, 2006 ACT245H1F Test July 31, 2006 Privacy Code A for web v11.doc Page 2 out of 8 0. If not already done, please identifying your Privacy ID in the page footer (A, B, C or D) and code it as the answer for question 11. 1. (McDonald 1.7, Jul 24, 2006 Assignment, Modified) You short-sell 1,000 shares of CN Tower stock and cover the position 180 days later. Ignoring interest, calculate your profit. Data six months ago : Bid $25.12 Ask $25.31 Data now: Bid $22.87 Ask $23.23 Commission rate on buying and selling 0.3% (A) $1,745 (B) $1,750 (C) $1,755 (D) $1,760 (E) $1,765 (A) Solution 1,000 * [25.12*(1-0.003) – 23.23*(1+0.003)] = $1,744.95 2. (McDonald 2 nd . Ed. 2.7b Jul 26, 2006 Assignment, Modified) You are given the following data at a time when the market has become temporarily chaotic: Current ABC stock price $200.00 Forward price for delivery in 1 year $211.05 Dividends Zero Interest rate effective per annum 5% Calculate the current value by which buying the stock is a cheaper alternative than buying the forward. Give the answer to the nearest cent: (A) -$2.00 (B) -$1.00 (C) $0.00 (D) $1.00 (E) The correct answer is not given by (A), (B), (C) or (D)
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summer 09 - Family name comma personal names Your student...

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