Q uiz #2
Student: _
Class Time: _
1. You purchased a stock five months ago for $40 a share. Today, you sold that stock for $45 a share. The stock pays no dividends. What was your annualized rate of return? A. B. C. D. E. 26.93 percent 28.77 percent 29.32
1. You have $10,000 to in vest into a two stock portfolio. Stock x has an r= 14% and stock y has an r= 9%. You desire a return of 12%.
How do you achieve this? 14(.60)+9(.40)= 12%
2. You know that the beta of stock i is equal to 1.75. You also know that t
Chapter 6 Stock Valuation In-class problem CHECK ANSWER
1. Free Cash Flow Models (LO3, CFA7) You are going to value Lauryns Doll Co. using the FCF
Model. After consulting various sources, you find that Lauryn has a reported equity beta of 1.4, a
debt-to-e
Problem Set #4 Answers
Stock Market Index Problems
Consider the following three stocks.
Today
Company
A
B
C
Stock Price
$15
$63
$192
$270
Number of Shares
1,000,000
200,000
25,000
Market Value
15,000,000
12,600,000
4,800,000
32,400,000
Stock Price
$32
$26
Problem Set #1
HPR, ear, Arithmetic and Geometric Averages
1.
Suppose that you buy a stock for P0 = 28.14. Fifteen days later the stock is selling
for $28.52. What is your HPR and ear?
HPR = .013504
m = 24.3333
ear = .3860
2.
You buy a stock for $72.53. S
P/E Problems Answers
1.
Projected earnings for Tine Corp this year is E1 = $3.60. The price to earnings (i.e. P0/E1) ratio of
Tine is typically in the range of 15 to 20.
a.
Based on the typical price to earnings range what is an expected price range of th
Problem Set #2
Fin 321 Fall 2016
Margin Trading Problems
1.
a.
b.
c.
d.
.526
.46
$54
$36
2.
a.
b.
c.
d.
1300
.567
.48
17.33
3.
a.
b.
c.
d.
68.75
6.67%
10.00%
$66.67
4.
a.
b.
c.
$3600
$48
$380
Answers to Problem Set #3
Margin Purchases and Short Selling
1a $3,800
b. .629
2a .714
b. Lost $400
3a. 70.3%
b. $54
4.a. $13,650
c. $87.69
% margin = .565
c. $38.57
b. 56.9%
5.a. 60.59% b. $1,800
c, $55.38
d. $490
c. 43.7%
d. $105
FIN 321 Winter 2017 Homework 4 (DUE 3/1/2017)
1. What is the price of a U.S. Treasury bill with 93 days to maturity quoted at a discount yield of 1.65
percent? Assume a $1 million face value.
2. A U.S. Treasury bill with 87 days to maturity is quoted at a
Solutions Assignment 1 FIN321 Winter 2015
My ranking for the criteria of expected return, risk, liquidity and ease of management are:
Good
GE Stock
Baseball
Savings
Whitecaps
Bond
E Ris Liquidit E Of
R k
y
Mgt
6
6
6
6
1
4
2
3
3
3
4
4
5
1
1
1
2
5
5
5
4
2
3
FIN321 Winter 2015
Project Assignment
Overview: This project integrates material presented in various segments of the course and is
also designed to benefit your personal financial planning. You are required to identify two
investment goals and detail a p
FIN 321 Chapter 1 in-class problems KEY
1. The rate of return on Starks Inc., stock over the last 5 years was 16%, 11%, -2%, 5%, and 12%. Over the
same period, the return on Wayne Inc.s stock was 16%, 21%, -3%, 5%, and 13%. Calculate the variances
and sta
T-Bill Prices and Rates
1.
You buy a stock for $16. It pays a dividend of $.35. 127 days later you sell it for
16.60. What was your holding period return, APR, and ear?
HPR = 5.9375%
APR = HPR * m
m = 365/127 = 2.87402
APR = 17.06%
Ear = (1+HPR)m -1 = 18.
Assignment 14 Daily Grade 21 FIN321-Fall 2015
Questions on How a Salesman Built Hottest Stock of 1996 Before the Roof Fell In
How hot was Centennial Technologies?
Stock was at 451% last year as the top performer on the New York Stock Exchange.
Where was i
Assignment 15 Daily Grade 22 FIN321-Fall 2015
1. What is fundamental value? What does fundamental value have to do with the nomenclature
fundamentalist? What is a fundamentalist to do with fundamental value? What view does this
require of market efficienc
Assignment 17 Daily Grade 26 FIN321-Fall 2015
Answer the following Questions
Relative to the Waddell & Reed Staff Listing
You will find this document on Blackboard
Members of the research analyst staff, listings started on page 3 of the Waddell & Reed cha
1. If you want to make money, you have to take risks. Find the formula to
eliminate risk and get rich.
2. Leo uses human judgment, he researches and reads newspapers/articles.
Then he asks himself if this new information will make buyers bullish or
bearis
Problem Set #5
Ex Post Mean and Standard Deviation
1. Us the formulas to calculate the mean and standard deviation of the following historical monthly
returns: 8%, 4%, 3%, -4% 9%. Check your answer using the statistical function on your
calculator.
Expect
1. Free Cash Flow Models (LO3, CFA7) You are going to value Lauryns Doll Co. using the FCF
Model. After consulting various sources, you find that Lauryn has a reported equity beta of 1.4, a
debt-to-equity ratio of .3, and a tax rate of 30 percent. Based o
FIN 321 Chapter 15 Options In-Class problems
1. Using the below options quote for AAPL (next earnings date: Oct 27), calculate profit/loss for an
investor who purchases 18 call contracts on Apple, given that the call premium is $1.78 per share (ask
price)
Assignment 11 FIN321 Winter 2016
Exercise with Complex Strategies and Valuation
The option prices are for Exxon collected February 18, 2016. The options have an April 15, 2016
expiration date. At the time the quotes were collected Exxon was trading at $82
Assignment 10 FIN321 Winter 2016
Exercise with Option Returns
The option prices are for Exxon collected February 18, 2016. The options have an April 15, 2016
expiration date. At the time the quotes were collected Exxon was trading at $82.45.
Type
Strike P
Assignment 13 FIN321-Winter 2016
Questions on Trillion Dollar Bet
Due Midnight Saturday April 2
The Nova program starts with a restatement of the risk-return tradeoff
principle. What was this statement?
- If you want to make money, you have to take risks
Assignment 10 FIN321 Winter 2016
Exercise with Option Returns
The option prices are for Exxon collected February 18, 2016. The options have an April 15, 2016
expiration date. At the time the quotes were collected Exxon was trading at $82.45.
Type
Strike P