Midterm Exam Info

Midterm Exam Info - Midterm Examination Information Winter...

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Unformatted text preview: Midterm Examination Information Winter 2011 ARE 171A A. Havenner The midterm examination is Thursday, February 10, 2011. Answers will be written on the examinations themselves, so no bluebook or other paper is necessary. The backs of the examinations can be used for scratch paper -- no separate scratch paper or other materials are permitted, apart from a calculator. I will hold a review session Tuesday February 8, 2011 from 1:40—3:00 in 1227 Haring Hall during which I will answer questions in a group forum. (This will require shortening my regular Tuesday office hour to 1100-1 :30.) The review session is strictly to answer your questions; I will not prepare material to present. It is expected that some may come late, or leave early during this review. Other office hours and discussion sections will be held preceding the midterm as scheduled, in addition to the review session. The examination will cover the material listed on the syllabus through Chapter 10 sections 10.1-10.6 and identified again below, as well as any supplemental material in the class notes through notes page 56. The notes on the class web page are the first place to begin studying. Be sure that you understand everything in these. These notes tend to be slightly more conceptual, while the text is problem oriented. I expect you to have read all the assigned sections in the text, whether or not they were covered in class. Text Topics and Sections: Chapter 4. Net Present Value (all sections) Chapter 5. How to Value Bonds and Stocks Skip Sections 5.6, 5.7, and 5.8 Appendix 5A. The Term Structure of Interest Rates, Spot Rates, and Yield to Maturity (on the class website, are171a.ucdavis.edu) Chapter 7. Net Present Value and Capital Budgeting, Section 7.3 only Chapter 9. Risk and Return: Lessons from Market History (In editions 6 and 7 chapter 9 is titled Capital Market Theory: An Overview) Appendix 9A. The Historical Market Risk Premium: The Very Long Run (on the class website, are171a.ucdavis.edu) Chapter 10. Return and Risk, sections 10.1 through 10.6 Representative Formulas to be Provided on the Examination: (1+5)’”—1 PV=§ PV=§g PV=CA,T=C[1-(l:r),]/r PV:C[r:g—r-l—g(ll+Ti)T] PVzufrF PV=CA’T+(1+F-r)’ r Div(1+ )‘—I 1 Div, PV= 2————g‘ + 7 ‘ i=1 (1+r)‘ (1+r) Other Information Be prepared to answer both descriptive and numerical term structure questions from the Appendix 5A ideas. Be prepared to answer descriptive questions from Chapter 9 and its Appendix 9A. Be prepared to answer descriptive and conceptual questions from the Addendum developing the Random Walk model for cash—cow stocks beginning on page 35 of the notes -- but you need not be able to derive it algebraically. Representative Problems: Not all of the exercises in the text are equally informative: the following problems have been selected as particularly useful. It is not expected that you will do all of these problems, I simply offer a selection from which to choose -- you will prepare best by combining study of the notes and book with selected problems in any ares in which you feel weak. Note that the problems do not cover all of the concepts we have discussed. You will want to review the timing discussion and "Four Tricks" in Chapter 4, and stated to effective and effective to effective rates, for instance. These problems are heavier on the basic concepts of chapter 4 which are applied in chapter 5. Problems Edition 6 Edition 7 Edition 8 Chapter 4 4.1 4.1 2 4.2 4.2 3 similar 4.4 4.4 7 similar 4.12 4.11 12 similar 4.17 4.18 15 similar 4.19 4.20 14 similar 4.26 4.25 26 4.28 4.29 25 similar 4.32 4.33 28 similar 4.35 4.46 58 similar 4.41 4.38 33 Chapter 5 5.1 5.1 1 5.4 5.4 2 (book answer wrong) 5.17 5.17 13 similar 5.19 5.18 18 similar 5.21 5.19 21 Chapter 7 7.13 7.21 15 Chapter 9 9.17 9.17 — 9.8 9.8 12 similar Chapter 10 10.5 10.5 1-41 and Concept Questions: 1, 10.6 10.6 4, 7, 9 1 Unmatched 8'h edition problems that look ok. ...
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Midterm Exam Info - Midterm Examination Information Winter...

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