Practice Midterm question

Practice Midterm question - Tepper School of Business...

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Tepper School of Business Practice Midterm Exam Instructions 1. You have xxx minutes to complete this examination. 2. You are only allowed to consult the formula sheet provided at the end of the exam. 3. Laptops are not permitted. 4. There are 4 parts on this examination worth xxx points total. 5. Please answer the questions in the space provided. Write your full name legibly at the bottom of this page. 6. Please show all work to ensure full credit. Partial credit is extensive and a function of the work shown. 7. All interest rates are quoted as annual effective rates (an annual rate with annual compounding) unless otherwise stated. 8. Please stop writing when time is called. Failure to stop writing when time is called will result in an immediate loss of 30 points. Do not make me enforce this rule. GOOD LUCK ! Name:__________________________________________________________
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Formula Sheet Net Present Value 0 1 (1 ) T t t t t C NPV C r = =+ + Perpetuity C PV r = Growing Perpetuity C PV rg = T-year annuity 1 1 ) T C PV r r =− + T-year growing annuity 1 1 1 T Cg PV r + ⎛⎞ ⎜⎟ −+ ⎝⎠ Constant growth formula 11 1 0 0 ) * D Dk E g k R O E P Pr g r g = = = −− Bond price 1 ) ) T t tT t tt C F P rr = ++ Bond yield 1 ) ) T t t C F P yy = Forward rate 1 1 1 ) ) t t t t t rD F f DF r + = + Real interest rate ) ) ) t t t t t t r R i + += +
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Part 1 [xxx points]: Multiple Choices. Please CIRCLE the correct answer.
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This note was uploaded on 01/20/2012 for the course INVESTMENT 101 taught by Professor Unknown during the Spring '08 term at Carnegie Mellon.

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Practice Midterm question - Tepper School of Business...

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