Chapter 1
P1.
A) real
B) financial
C) financial
D) real
E) real
F)financial
P2.
APR=20%, quarterly compounding, EAR=(1+(.2/4)4-1=21.55%
APR=19.5%, daily compounding, EAR=(1+(.195/365)365-1=21.52%
A credit card with 19.5% APR with daily compounding is bett
Homework #4
Course: Finance 441
Term: Spring 2014
Instructions: Please complete the assignment on another piece of paper and show your work wherever
possible. You may handwrite or type your response, but if you choose to handwrite it make sure it is
legib
Homework #0
Course: Finance 3303
Term: Fall 2014
DAmore-McKim School of Business
Instructions: The purpose of this homework is to help me have a better assessment of your quantitative
background. This homework will NOT count towards your final grade. You
Chapter 13
P1) Remarkable Deals Co. has been performing above average and its price is at $55. RD paid
dividends of $2.50 last year. RDs beta is 1.5, the expected rate on the market is 12% and the
risk free rate is 1.5%.
a)You expect the companys dividend
WASHINGTON UNIVERSITY IN ST. LOUIS
OLIN BUSINESS SCHOOL
Course: Finance 441
Term: Spring 2014
Professor: Felipe Cortes
Exam Grade
Section 1:_
Section 2:_
Section 3:_
Section 4:_
FINAL EXAM
Time: 120 minutes
of 20
of 30
of 30
of 20
Total:_of 100
INSTRUCTIO
Assignment 1: Mutual Funds. Complete and submit on due date.
Identify and research a mutual fund, or an exchange traded fund, that focuses on
equities. You may want to go directly to an investment company website such as
Fidelity, PIMCO, Vanguard, Pioneer
Homework #1
Course: Finance 3303
Term: Fall 2014
Instructions: Please complete the assignment on another piece of paper and show your work wherever
possible. You may handwrite or type your response, but if you choose to handwrite it make sure it is
legibl
Homework #2
Course: Finance 3303
Term: Fall 2014
Instructions: Please complete the assignment on another piece of paper and show your work wherever
possible. You may handwrite or type your response, but if you choose to handwrite it make sure it is
legibl
Practice problems with solutions
Chapter 13
1. A company pays D1=$3, D2=$2, D3=$0, and D4=$1.5. Starting the 5th year the
companys dividend is expected to grow by 2% each year, indefinitely (e.g. D5=1.5*1.02
= $1.53, etc.). If the cost of equity capital f
Page 1 of 5 Homework #1 Course: Finance 3303 Term: Spring 2016 Instructions: Please complete the
assignment on another piece of paper and show your work wherever possible. You may handwrite or
type your response, but if you choose to handwrite it make sur
For todays Exam, your ultimate goal is to advise Gerard, the owner of Bobs Bike Shop, whether he should invest in new,
high-tech, tungsten inert gas (TIG) frame welding machinery for his mountain bike building business. You must also answer
several questi
Homework #3
Course: Finance 3303
Term: Fall 2014
Instructions: Please complete the assignment on another piece of paper and show your work wherever
possible. You may handwrite or type your response, but if you choose to handwrite it make sure it is
legibl
Northeastern University
Stock Valuation Exercise Problems (1)
Dr. Paul Chiou
1) In general, the retention ratio is higher, the future growth rate of the company will be _.
2) Chiou's Inc. is expected to pay annual dividends of $2.50 a share for the next t
WASHINGTON UNIVERSITY IN ST. LOUIS
OLIN BUSINESS SCHOOL
Course: Finance 441
Term: Spring 2014
Professor: Felipe Cortes
MIDTERM EXAM
Exam Grade
Section 1:_
Section 2:_
Section 3:_
Section 4:_
Time: 80 minutes
of 35
of 20
of 25
of 25
Total:_of 100
INSTRUCTI
Formula sheet, midterm
Statistics from scenario analysis
E (r ) = P( s)r ( s)
s
= P( s)[r ( s ) E (r )]
s
2
2
cov(r1 , r2 ) = P ( s )[r1 ( s ) E (r1 )][r2 ( s ) E (r2 )]
s
Corr1,2 = 1,2 = cov( r1 , r2 )
1 2
Risky portfolio
n
E ( rp ) = wi E ( ri )
i =1
FIN 3301 Final Exam
Sec. _
Name:_
Greetings!
For todays consultative banker project, your ultimate goal is to advise Gerard, the CEO of Bobs Bike
Shop, on the intrinsic value of his company. You must also answer several questions relating to finance and
y
FINA 3303
Exercise Questions 2
1. Josh purchased 100 shares of XOM for $76.63 per share at the beginning of 2007. He received dividends
per share of $1.37 (2007), $1.55 (2008), $1.66 (2009), $1.74 (2010), $1.85 (2011). At the end of 2011, just
after recei
NORTHESATERN UNIVERSITY
DAMORE-MCKIM SCHOOL OF BUSINESS
Course: Finance 3303
Term: Fall 2014
Professor: Felipe Cortes
MIDTERM EXAM
Exam Grade
Section 1:_
Section 2:_
Section 3:_
Section 4:_
Time: 100 minutes
of 30
of 25
of 25
of 20
Total:_of 100
INSTRUCTI
CASH BUDGET for HAMPTON MACHINE TOOL(000 $) extended Repayment with dividends
September
October
November
December
January
Receipts:
A/R Collection(assumes 30-day;Oct& Nov.
less advances of $840 and $726, respectively)
Bank Loan
Total Cash Inflow
$684.00
$
Homework 2
Due: Friday, November 4, in class
Homework from Chapter 5
P1) The stock of Buyer Behold Inc. sells for $40 a share. Its likely dividend payout and end-ofyear price depend on the state of the economy by the end of the year as follows:
Economic c
Homework 2 solutions
Homework from Chapter 5
P1) The stock of Buyer Behold Inc. sells for 40$ a share. Its likely dividend payout and end of
year price depends on the state of the economy by the end of the year as follows:
Economic condition
Dividend
Stoc
Lecture 8
Outline
Portfolio of Two Risky Assets
Benefits of Diversification
Systematic and Idiosyncratic Risk
Covariance Calculations
Markowitz Optimization
The Sharpe Ratio
We want to maximize the slope of the CAL for
any possible portfolio, P
The
Lecture 9
122
Outline
Portfolio of Two Risky Assets
Benefits of Diversification
Review Optimization and Matrix Algebra
Systematic and Idiosyncratic Risk
Covariance Calculations
Markowitz Optimization
123
The Minimum-Variance Frontier of Risky Assets
Lecture 15
FIN 3303
1
Fundamental Analysis
Fundamental Analysis is the analysis of the
determinants of value such as earnings
prospects.
It is important to identify the factors that may
influence firms earnings.
2
Fundamental Analysis
A firms value com
Lecture 3
Creating knowledgeInspiring individualsTransforming business
Outline
Institutional Details (continued)
Types of Investment Companies
Review of Risk and Return
Bond Trading
Most equities are traded on exchanges
In contrast, most bond trading
Inputs:
3 stocks
A
B
C
Return
Std. Dev Variance
8.90%
0.1
0.01
12.70%
0.16
0.0256
5.90%
0.14
0.0196
Covariances
A and B
A and C
B and C
Compute the optimal portfolio when the portfolio return is:
In other words, we will minimize the variance subject to th
Lecture 5
FIN 3303
Outline
History of Risk and Return
Portfolio Evaluation
Adjusting Returns for Risk
The simplest and most popular way to adjust
returns for risk is to compare the portfolios
return with the returns on a comparison universe
The compar
Lecture 4
How do we calculate returns in the first place?
If you make an investment at t=0, what is your return at
t+1?
The holding period return is defined as:
P1 P0 D1
HPR
P0
where P0 is the initial price, P1 is the ending price, and
D1 is the divide
News Presentation
FIN 3303
Guidelines
Very short presentation:
No more than 5 minutes
Each presentation should include at least two relevant financial
news.
Each presentation should:
Provide a brief description of the news
Explain the implications i
Equity Valuation
Chapter 13
Questions
How can I value a stock based on expected dividend payments? (review)
What if the firms growth is not constant?
How can I value a stock if the firm doesnt pay dividends, but does stock repurchases
instead? What if i
Securities Markets
Chapter 3
Questions
How do firms issue securities?
What are different markets for trading securities, and how do they work?
What are the different ways in which I can trade? What are the costs?
What does it mean to buy on margin? Ho
Options
Chapters 15 and 16
Reading: All of Chapter 15; Section 1 of Chapter 16
Questions
What is a derivative? What are futures? What are options?
How can options be used? How is it that an option can be used to eliminate risk (hedge),
or to increase ri
Risk and Return
Chapter 5
Questions
How do I determine returns for a stock that pays dividends?
What is the difference between arithmetic and geometric average returns?
How do I annualize a return? What is the difference between EAR and APR?
How do I
Efficient Diversification
Chapter 6
Questions
How do I measure the benefit of diversifying?
How do I determine the expected return and standard deviation of return for a portfolio?
What are the different types of risk?
What is the investment opportuni