Math 1 portfolio with correl y ou invest in two in a

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13. Math 1: Portfolio with correlYou invest in two in a portfolio with two securities. Security N and M. Security N has a beta equal to the T-bill. You invest 40% is N and 60% in M, if the portfolio beta is 0.6 what is the beta of M?Math 2: MispricingYou wanted to invest in the stock of Dell Inc. The T-bill rate is 3%, market risk premium is 8.25% and thebeta of the stock of Dell Inc. is 1.25. The market is showing an expected rate of return on the stock ofDell to be 13.55%. Comment on your investment.Class 1:1.Corporate finance questions refer to, slide 7: Examples like, TD bank wants to open a branchin Ottawa, this is an example of capital budgeting.2.CFO, slide 9: The role of each finance officer.3.Forms of Business, slide 11, 12: Note: characteristics, advantage and disadvantage4.Goal of a firm, slide 13,14 Note: for trading and non-trading company, maximize the currentprice of the stock.5.Agency problem, slide 16, 17 Note: Examples of the different types of cost6.Financial market, slide 18, : Definition and examples.7.Book value, market value, slide 25: Examples from practice exercise8.Cash flow, slide 28-37: Equations and calculations9.End of chapter exercises, practice exercise, past mid-term.
Class 2: 1.Sources and uses of cash, all examples. Refer to slide 2. a.All examples of sources and uses of cash.b.Note: the only 2 non cash items are A/R and AP. c.A/R decreases and A/P increases = Sourced.A/R increase, AP decrease = Uses.2.Calculation of additional RE and cashflow, slide 6,7. a.Equations like retention ratio, div payout ratio.b.Additional RE = This year’s NI * Retention ratio.c.RE = last year RE + this year RE.3.Standardized Financial Statements, slide 9-12, a.Note: CS balance sheet is based on Total asset and CS income statement is based onSales.b.Calculate the CS, base year and the combined.4.Financial ratios, all. Note: Interpretation and calculation5.Dupont, slide 24. Note: Keep a copy in your equation sheet6.D/E ratio: Note: D/E = TD / TE (Two variations of the TDR)a.Debt/Equity = TD / TEb.Equity Multiplier = TA / TE = 1 + D/E7.Relation between ROA and ROEIf ROA and ROE is the same then the firm is a no debt firm or unleveredfirm. If ROE is less than ROA then the firm has debt. 8.End of chapter exercises, practice exercise, past mid-term, Class 3: 1.Financial Planning Process/Dimension, slide 4-62.Plug variable, example, slide 8-14: 3.EFN, all examples, slide 14-16, and 22-23, use all types of equations., Practice all Example4.Under capacity, slide 18, 19. Examples given.5.Important ratios, slide 20-21, Keep a copy in your equation sheet6.Growth rates, internal and sustainable, slide, 25-30. Practice all Examples7.End of chapter exercises, practice exercise, past mid-term,Class 4:1.Calculation of simple interest rate and compound interest rate, slide 2 and 42.All examples of FV and PV. Slide 2-11.3.All examples of calculating Interest rate and time period, slide 13-16, 4.Uneven cahsflow, slide 17-26 , example given.5.All examples of annuities, slide 29 -38, Examples given. Note: Careful about BEG and ENDannuities. Adjust with (1+R) as applicable.6.End of chapter exercises, practice exercise, past mid-term,

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