expeditedreviewguide111

expeditedreviewguide111 - Expedited/Emergency Study Guide...

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There will be 13 pages in this final exam. Exact Questions on Final: At 1.5% monthly rate, compounded per month, approximately what is the effective annual rate? EAR = (1 + 0.015) 12 – 1= 19.5% (Otavio or Michael could change the numbers a little) What are switching costs? (2-3pts) Explain the difference between systematic and unsystematic risks? (2-3pts) What is QE2? Provide one argument for it AND one argument against it. (2-3pts) What are the advantages and disadvantages of a weak dollar? (2-3pts) You need to know the strengths & weaknesses with regards to the Apple case study. Do not waste time looking over charts and graphs, it’s not in the final! Be sure you know how to draw the Yield Curve . Label Normal, Normal-but steep, and Inverted. X-axis label is Time to Maturity, Y-axis is Yield to Maturity, label the y-axis at 4.5%. On the x-axis, label them to be at 1month, 10 year, and 30 year. (4pts) Definition on derivative & what derivatives are consist of, what caused the financial crisis? Match the following: Inflation = 3.1 Treasury-Bills = 3.8, 5.8 =
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expeditedreviewguide111 - Expedited/Emergency Study Guide...

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