Econ3101 - Section 004
Intermediate Microeconomics
Xavier Vinyals-Mirabent
Due: Monday, September 19th, 2011.
Solutions to Homework 1.
1
1. A consumer has preferences for two goods. Her preferences satisfy Axioms 1 through
4 as discussed in class.
A
v
10
Econ3101 - Section 003
Intermediate Microeconomics
Xavier Vinyals-Mirabent
Department of Economics
University of Minnesota.
Midterm 2 will be on Friday, November 11th, 2011.
Solutions to Practice Midterm 2.
Included are a few practice problems to help you
mrizes the payoff and proﬁt of this
position. Verify that your table matches Figure 3.5.
For the following problems assume the eﬁ‘ective 6-month interest rate is 2%, the 8&1?
6-month forward price is $1020, and use I
hese premiums for $621? options with 6
Econ3101 - Section 004
Intermediate Microeconomics
Xavier Vinyals-Mirabent
Department of Economics
University of Minnesota.
Due: Friday, September 16th, 2011.
Homework 1.
The homework will be due at the beginning of the class. Late homework (within the d
Econ3101 - Section 004
Intermediate Microeconomics
Xavier Vinyals-Mirabent
Department of Economics
University of Minnesota.
Due: Friday, September 30th, 2011.
Solutions to Homework 2.
1
1. Lets get some practice plotting the budget constraint. On the grap
1. Which of the following is not a way to create a 40-45-50 butterfly?
(A) buy 40-strike call, write two 45-strike calls, buy 50-strike call
(B) buy 40-strike put, write two 45-strike puts, buy 50-strike put
(C) buy 40-strike put, write 45-strike call, wr
Derivative Markets Review Problems
Samantha buys 100 shares of stock but changes her mind and immediately sells the stock. The
broker’s commission is $20 on a purchase or sale. Samantha lost $70 on this transaction. What
was the difference between the bid
The Innite Actuarys
Joint Exam 2/FM
Sample Exam 3 Answers
1. E
11. A
21. E
31. B
2. C
12. C
22. D
32. D
3. C
13. D
23. D
33. E
4. B
14. D
24. A
34. A
5. A
15. C
25. B
35. A
6. A
16. A
26. E
7. C
17. C
27. C
8. B
18. B
28. B
9. D
19. A
29. A
10. E
20. D
30
Exam FM/2
Practice Exam 3
Copyright c 2013 Actuarial Investment.
1. An n-year bond has a face amount of 1000 with annual coupons of 5%. The book value of
the bond at the end of the 6th year is 857 and the adjustment to the bond in the 6th year is a
write-
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Exam FM/2
Practice Exam 3
Answer Key
Copyright c 2013 Actuarial Investment.
1
1. An n-year bond has a face amount of 1000 with annual coupons of 5%. The book value of
the bond at the end of the 6th year is 857 and the adjustment to the bond in the 6th yea
The Innite Actuarys
Joint Exam 2/FM
Sample Exam 1
by James Washer, FSA, MAAA
last updated - August 13, 2013
Take this sample exam under strict exam conditions. Start a timer for 3
hours and stop immediately when the timer is done. Do not stop the clock
wh
The Innite Actuarys
Joint Exam 2/FM
Sample Exam 3
by James Washer, FSA, MAAA
last update - June 14, 2013
Take this sample exam under strict exam conditions. Start a timer for 3 hours and stop immediately
when the timer is done. Do not stop the clock when
Homework 5
Theory of Interest
NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR
1. Given NPV=-1000+500v^3+800v^8 and a rate of interest of 4%, what is the NPV?
Should we invest? An alternative investment with similar risks is available an
The Theory of Interest - Solutions Manual
Chapter 8
1. Let X be the total cost. The equation of value is
X X = a12 j where j is the monthly rate of interest or a12 j = 10. 10
The unknown rate j can be found on a financial calculator as 3.503%. The effect
The Theory of Interest - Solutions Manual
Chapter 11
1. A generalized version of formula (11.2) would be
d=
t1v t1 Rt1 + t2 v t2 Rt2 + v t1 Rt1 + v t2 Rt2 +
+ tn v tn Rtn + v tn Rtn
t where 0 < t1 < t2 < < tn . Now multiply numerator and denominator by (1
The Theory of Interest - Solutions Manual
Chapter 10
1. (a) We have
1 2 3 4 5 1000 (1.095 ) + (1.0925 ) + (1.0875 ) + (1.08 ) + (1.07 ) = $3976.61.
(b) The present value is greater than in Example 10.1 (1), since the lower spot rates apply over longer pe
Option
Position
Memory Alert!
(see text for more details)
Combination of Options
Comments
Prot Graph
Straddle
Written Straddle
Strangle
Buttery Spread
Asymmetric Buttery
Spread
To straddle is to take both sides
of an issue at once. In nance,
this means
Derivative Markets Review Problems
1. Samantha buys 100 shares of stock but changes her mind and immediately sells the stock. The
brokers commission is $20 on a purchase or sale. Samantha lost $70 on this transaction. What
was the difference between the b
Math 4065
Lecture 1: Examples and Group Problem Solving
Kellison 1.2, 1.3, 1.4
Accumulation and Amount Functions
Effective Rate of Interest
Simple Interest
Study Note: Determinates of Interest Rates, Section 1
Examples:
1. You invest $100 on January 1
Math 4065
Lecture 4: Examples and Group Problem Solving
In Class Topics:
Kellison Ch. 1.9 Force of Interest and Discount
Kellison Ch. 1.10 Varying Interest
Calculator Skills: Interest Rate Conversion
Study Note: Determinate of Interest Rates; Section
Math 4065
Lecture 3: Examples and Group Problem Solving
Kellison 1.7, 1.8
Effective Rate of Discount
Nominal Rates of Interest and Discount
Examples:
1. If A(0) = 500 and A(1) = 525, find
i 1d 1
. (.05, .04762)
2. Chloe will receive $5,000 in 3 years an