Introduction to Risk and Return
Topics Covered
Over a Century of Capital Market History
Measuring Portfolio Risk
Calculating Portfolio Risk
Beta and Unique Risk
Diversification & Value Additivity
1
Ov
Portfolio Theory and the Capital Asset Pricing Model (CAPM)
Topics Covered
Markowitz Portfolio Theory Variance and Covariance; Efficient Frontier
(Treynor 61, Sharpe 64, Lintner 65, Mossin 66) Risk an
Chapter 3 (Valuing Bonds, Duration, Spot/Forward Rate)
Suggested Homework
1. A six-year government bond makes annual coupon payments of 5% and offers
a yield of 3% annually compounded. Suppose that on
Chapter 3 (Valuing Bonds, Duration, Spot/Forward Rate)
Suggested Homework
1. A six-year government bond makes annual coupon payments of 5% and offers
a yield of 3% annually compounded. Suppose that on
Chapter 2 (How to Calculate Present Values)
1. Siegfried Basset is 65 years of age and has a life expectancy of 12 more years. He wishes to
invest $20,000 in an annuity that will make a level payment
Risk and the Cost of Capital
Topics Covered
Company and Project Costs of Capital
Measuring the Cost of Equity
Setting Discount Rates w/o Beta
Certainty Equivalents
Discount Rates for International Pro
Project Analysis
Topics Covered
How to Handle Uncertainty?
Sensitivity Analysis - the effects of changes in sales, costs, etc. of a project one
variable changes.
Scenario Analysis - the structures o
The Value of Common Stocks
Stock represents ownership of the corporation.
Topics Covered
Stocks and Stock Markets
How Dividends are Paid
Valuing Common Stocks
What Causes the Dividends to Grow? - A Co
Chapter 2 (How to Calculate Present Values)
1. Siegfried Basset is 65 years of age and has a life expectancy of 12 more years. He wishes to
invest $20,000 in an annuity that will make a level payment
Valuing Bonds
Bonds are long-term standardized (securitized) loans issued by governments or
corporations.
Topics Covered:
Treasury and Corporate Bonds, and the Default Risk
Pricing Bonds: Annual and S
How to Calculate Present Values
Topics Covered:
Simple Interest, Compound Interest and Effective Interest Rate
Future Value, Present Value and the Net Present Value Rule
Shortcuts Perpetuities and Ann
Goals and Governance of the Firm
Topics Covered:
Business Forms
Financial Market and the Financial Manager
Decision Making & Opportunity Cost of Capital
Separation of Ownership and Management, Corpora
Exam MFE/3F
Sample Questions and Solutions
April 6, 2010
1
1. Consider a European call option and a European put option on a nondividend-paying
stock. You are given:
(i)
The current price of the stock
Notes 9 ANOVA Homework Answers
(1) According to the leadership literature, there are a number of different leadership styles. Listed below are
scores obtained from an instrument designed to measure a
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B&W CONFIRMINGS
C H A P T E
R
4
Probability and
Counting Rules
Objectives
Outline
After completing this chapter, you should be able to
41
1
Determine sample
0
This exam is open book, open notes, but INDIVIDUAL effort. Please DO NOT consult with ANYONE.
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