Investments
(Assignment 3 - Solutions)
Problem 1
Let Var(rM)=0.05 be the variance of the return on the market. Assume CAPM holds and that the
following assets are correctly priced according to the security market line.
Asset 1: E[r1] = 6%,
Asset 2: E[r2]
Investments
(Assignment 2 - Solutions)
Problem 1
You are considering the choice between investing $50,000 in a conventional 1-year bank CD
offering an interest rate of 5% and a 1-year Inflation-Plus CD offering 1.5% per year plus the
rate of inflation.
a.
Investments
(Assignment 1 - Solutions)
Problem 1
Lanni Products is a start-up computer software development firm. It currently owns computer
equipment worth $30,000 and has cash on hand of $20,000 contributed by Lannis owners. For
each of the following tr
Investments
(Assignment 4 - Solutions)
Problem 1
The State of California has issued a 5-year bond (Bond A) whose coupon rate is linked to the
amount of annual rainfall at the Golden Gate Bridge. Specifically, if there were Q inches of rainfall
in the prev
Investments
(Assignment 2)
Due: October 12 (Mon) 12:30pm
Problem 1
You are considering the choice between investing $50,000 in a conventional 1-year bank CD
offering an interest rate of 5% and a 1-year Inflation-Plus CD offering 1.5% per year plus the
rat
Investments
(Assignment 3)
Due: November 18 (Wed) 12:30pm
Problem 1
Let Var(rM)=0.05 be the variance of the return on the market. Assume CAPM holds and that the
following assets are correctly priced according to the security market line.
1 = 0.5
Asset 2:
Investments
(Assignment 4)
Due: December 9 (Wed) 12:30 pm
Problem 1
The State of California has issued a 5-year bond (Bond A) whose coupon rate is linked to the
amount of annual rainfall at the Golden Gate Bridge. Specifically, if there were Q inches of r
Investments
(Assignment 1)
Due: September 23 (Wed) 12:30 pm
Problem 1
Lanni Products is a start-up computer software development firm. It currently owns computer
equipment worth $30,000 and has cash on hand of $20,000 contributed by Lannis owners. For
eac