Set 12:
Financial Derivatives
1-2
Financial Derivatives
A financial option is a financial contract between two
parties.
Options have traded publicly on the CBOE since 1973
One of the most actively traded financial assets in global capital
markets
Play
Set 5: Valuing Bonds
1-2
Motivation for Studying Bond Valuation
Bond fact: The US bond
market is larger than the
equity market
At year-end 2012, the
equity market cap was
$26.4 trillion while bond
market outstandings
totaled $38.6 trillion
(Sources: Fed
Set 14:
Capital Structure
Capital Structure
One of the fundamental questions of corporate finance is how a firm
should choose the set of securities it will issue to raise capital from
investors.
This decision determines the firms capital structure. That
Accounting 2610
Final Exam
Professor Xiumin Martin
Fall 2011
Name _
Section _
General Instructions:
Please observe the Olin Schools Code of Conduct requirements.
1. You have 2 hours to complete the exam.
2. This exam is closed book, closed notes. You may
Accounting 2610
Final Exam - Key
Professor Xiumin Martin
Fall 2011
Name _
Section _
General Instructions:
Please observe the Olin Schools Code of Conduct requirements.
1. You have 2 hours to complete the exam.
2. This exam is closed book, closed notes. Yo
Name: _
Date: _
Section Time: _
Mail File Status (circle one): Olin, Non-Olin, No Mail File
Accounting 2610
Fall 2012
Exam 2
You have 1 hour and 20 minutes to complete this exam.
This exam is closed book and closed notes. You may use simple or business ca
OSCM 230
Homework 13 Solutions
HOMEWORK #13 SOLUTIONS
DECISION ANALYSIS
Problem 828.
(a) Conduct survey. If results are favorable, build large shop. If the results are unfavorable, don't build any shop. (b) EVSI = $11,000. EVwPI = $35,400. Best EMV = $19
OSCM 230
Homework #12 Solutions
HOMEWORK #12 SOLUTIONS
PROJECT SCHEDULING
Chapter 7: 17, 22, 29, 36 7-17. See file P7-17.XLS. (a)
F A K I End H
Star
B E
G
J C D
(b & c) Act A B C D E F G H I J K a 3 2 1 6 2 6 1 3 10 14 2 m 6 4 2 7 4 10 2 6 11 16 8 b 8 4
OSCM 230
Homework 9 Solutions
HOMEWORK #9 SOLUTIONS S I MU L A T I O N M O DE L I N G Problem 1030 See file P1030 CB.XLS for the simulation model and calculations using Crystal Ball. Define cell B11 as the Forecast cell. Based on 5,000 trials, average pro
OSCM 230
Homework 08 Solutions
HOMEWORK #8
SIMULATION
MODELING
Problem 1017. See file P1017 CB.XLS for the simulation model and calculation using Crystal Ball. Based on 3,000 trials, the average ending balance at the end of the year is $47. There is also
OSCM 230
Homework 07
HOMEWORK #7
NONLINEAR PROGRAMMING
6-38. Let X1 = number of four-cylinder engines to produce, and X 2 = number of six-cylinder engines to produce. Objective: Maximize profit = X1(1,800 - 50X1) + X2(2,400 - 70X2) = 1,800X1 50X12 + 2,400
OSCM 230
Homework 06
HOMEWORK #6 SOLUTIONS
INTEGER PROGRAMMING
1. A startup problem Define Ai=1 if generator A is on in period i, 0 otherwise, i=1,2. Bi=1 if generator B is on in period i, 0 otherwise, i=1,2. Ci=1 if generator C is on in period i, 0 other
OSCM 230
Homework 05
HOMEWORK #5 SOLUTIONS
INTEGER PROGRAMMING
6-18. There are 8 decision variables (A, H, E, N, S, M, B, and R) corresponding to the eight investment options. Each variable can take only one of two values: = 1 if the investment is chosen,
OSCM 230
Homework 04 Solution
LINEAR PROGRAMMING SENSITIVITY ANALYSIS
Problem 48. In most cases, when the Allowable Increase or Allowable Decrease column for the objective function coefficient of a variable has a value of zero in the Adjustable Cells tab
OSCM 230 Homework #3
HOMEWORK #3(SOLUTIONS)
LINEAR PROGRAMMING (LP) FORMULATION 1. The problem is investing in the four securities so as to achieve maximum total return. Define: TB = amount to invest in Treasury Bonds CS = amount to invest in Common Stock
OSCM 230
Homework 02
HOMEWORK #2
LINEAR PROGRAMMING (LP) FORMULATION
3-2. Let C = number of canvas backpacks produced. P, N, L defined similarly. Objective: Maximize profit = cost)*P + cost)*L = Subject to: 2.25C 2.40P 2.10N 2.60L 1.5C + 1.5P 1.7N C, C, P
OSCM 230
Homework 01 Solution
LINEAR PROGRAMMING (LP) FORMULATION
Problem 240 a. Let: X = number of pounds of stock X purchased per cow each month Y = number of pounds of stock Y purchased per cow each month Z = number of pounds of stock Z purchased per c
FIN340 PRACTICE PROBLEM SET 8 RISK AND RETURN
1. Bearing market efficiency in mind, how do you respond to the following comments? a. "Efficient markets, my eye! I know lots of investors who do crazy things." An individual can do crazy things, but still no
FIN340 PRACTICE PROBLEM SET 7 STOCK VALUATION
1. After graduation, you become an analyst for a boutique investment banking company specializing in the technology industry. For your first assignment, you are on a team that is putting together an acquisitio
FIN340 PRACTICE PROBLEM SET 6 BOND VALUATION
1. Suppose that currently 5-year government bonds are selling at a yield of four percent. Please determine the value a 5-year government bond with a 6 percent coupon rate and a face value of 1,000. a. Start by
FIN340 PRACTICE PROBLEM SET 5 CAPITAL BUDGETING Frequently Asked (Shorter) Questions:
1. In the context of capital budgeting, what is an opportunity cost? An opportunity cost is the most valuable alternative that is foregone if a particular project is und
FIN340 PRACTICE PROBLEMS 3 INFLATION
Background: Movie Titanic is the top movie in the history of the United States (without adjustment for inflation). In 1997, it generated $600.80 million in revenue. Star Wars is the second all time top movie in the his
FIN340 PRACTICE PROBLEM SET 2 TIME VALUE OF MONEY
1. As winner of a breakfast cereal competition, you can choose one of the following prizes: (A) $100,000 now (B) $180,000 at the end of 5 years. (C) $11,400 a year forever. (D) $19,000 for each of 10 years