Types of problems most likely to show up on the final Fall 2010

Types of problems most likely to show up on the final Fall 2010

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Types of word problems most likely to show up on the final: 1. Binomial option pricing question (including valuation of equity as an option). 2. Option payoff or profit diagram question (including combinations of options and stocks as in covered call or protective put etc.). Also, make sure you recognize an option when you see one. 3. Dividend question (homemade, residual etc.). Note that there were no related assignment questions so you will need to rely on your lecture and seminar notes (I will post additional sample problems as well). 4. Capital structure question (use of MM proposition II with or without taxes, value of levered vs. unlevered firm, homemade leverage). 5. WACC question (possibly combined with capital structure problem). 6. Risk and return problem (calculating expected return, standard deviation, variance for stock and/or portfolios, using beta and CAPM, interpreting regression output, selecting under- or overvalued securities etc.). 7.
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This note was uploaded on 11/01/2011 for the course BUSINESS FIN301 taught by Professor Andrew during the Fall '10 term at University of Alberta.

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