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
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-
Jmm L QWW Raglan;
m (MM "in Edgy 30,000
@SF Obi/903* $0000 6000036761 : 3(00090
(00000 L s: 57ng 070
\
a 63614 g) z, ,02
'2 V017] L/
't cm '10 H n n. \
\-\1
\ 2' \ 7 \j 2:
\ = 2H \ i \ m\ L h '
"2: a?) 3 K L '7) (+01)
E] 'Eooamons 4- 300 am.o4Ur;5) +io
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
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
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
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
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
EXAM FM
CALCULATOR PRACTICE PROBLEMS
= INTEREST THEORY '
For each of the following, determine the value of the required unknown, using_ no
pencillpaper
Solve for 0' :
' 0 0 0 .
1. 1750 = 1520+ 2 0 71:.13611219
82-07%.
3.100+33ﬁ-|.=~100(1.06)5 0': .026
Math 4065 Handout
Lecture 21
McDonald Chapter 3.1, 3.2
Examples:
1. You buy a stock for $100 and at the same time you purchase a European 6-month put with a strike price
of $100. The premium for the put is $6.50 and the effective rate of interest for 6-mo
Math 4065: Theory of Interest
Katherine Kovarik, [email protected]
Office hours M, W 12:15 2:15, and after class or by appointment, Vincent 262
Required texts: The Theory of Interest, Kellison, 3rd edition; Derivatives Markets, McDonald, 3rdedition
Require