Winter 2011 - Week 10 PRACTICE FINAL

Winter 2011 - Week 10 PRACTICE FINAL - Engineering 111...

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Unformatted text preview: Engineering 111: Practice Final 1. You have a bond with a face value of 2500, a annual coupon rate of 10%, and a 5 year lifespan. Calculate the present value of the bond. Assume YTM is 5% 2. You have a stock with a dividend of $2, with an interest rate of 5% and a growth rate of 3%. What is its value? 3. Define CAPM. What are its components? Suppose the risk free rate of a stock is 5%, the market return is 8%, and a stock has a beta of 1.5. What is the expected return? 4. What is an individual beta? What is an industry beta? 5. Draw the yield curve. What is the normal yield curve? What is the special case of the yield curve? What does this special case indicate? 6. Draw the risk and return graph. What is systematic risk? What is unsystematic risk? What is the optimal point? What is the efficiency frontier? 7. The following are very long term results for various financial measures. Match the results with the The following are very long term results for various financial measures....
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Winter 2011 - Week 10 PRACTICE FINAL - Engineering 111...

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