RISK MANAGEMENT AND INSURANCE
3/16
Keowns 7th Principle Protect Yourself Against Major Castrophe
Basic Terms and Concepts of Risk in Insurance
Risk is the uncertainty of economic loss
Pure Risk loss o
Stocks, Bonds & Derivatives
Final Exam
Fall 2014
prof. P. Lee
1. (25 points)
(1) You will be paying 7 million won a year in tuition expenses at the end of the next
3 years. You are considering a portf
Stocks, Bonds and Derivatives 1 Final Exam
Prof. P. Lee, Fall 2012
1. (35 points)
A 3-year maturity bond makes annual coupon payments with a coupon rate of 10% and face value of
1000. The yield to mat
Stocks, Bonds & Derivatives
Homework #2 Solution
Fall 2015
1. (p.360 #1) How can perpetuity, which has an infinite maturity have a duration as short as 10
or 20 years?
Duration can be thought of as a
Stocks, Bonds, and Derivatives
Homework #2 /due Dec. 10, 2014
Fall 2014
Prof. P, Lee
1. (p. 360 #4) A bond currently sells for $1,200, which gives it a yield to maturity of 8%. Suppose that
if the yie
Lecture Note
Stocks, Bonds & Derivatives
Prof. Phil Sang Lee
Fall 2016
What to Learn?
I. Securities Markets
II. Portfolio Theory
III. Bond Prices and Yields
IV. Derivative Markets
V. Financial Analysi
RISK and DIVERSIFICATION
10/17
All economic models are wrong; some economic models are useful - Sam Savage
Components of Risk Affecting Stocks
1
Market Risk fluctuations of the broad market not divers
Investment Companies and Mutual Funds
10/17
The miracle of compounding returns is overwhelmed by the tyranny of compounding costs.
Jack Bogle Little Book of Common Sense Investing
An Investment Compan
INVESTING AND THE MARKET
9/17
Financial markets do only one thing, but they do that one thing extremely well. They set the optimum
price. - Milton Friedman
When you have strong managers, weak director
Chapter 04. Case Problem : Susan Wongs personal budgeting model
(a)
Let
x ij = amount invested for i months in month j where i = 1, 3, 7 and j =1, 2, 3, .,
12
Objective function
12
12
12
j=1
j=1
j=1
Chapter 04. Case Problem : Susan Wongs personal budgeting model
(a)
Let
x ij = amount invested for i months in month j where i = 1, 3, 7 and j =1, 2, 3, .,
12
Objective function
12
12
12
j=1
j=1
j=1
HEALTH AND DISABILITY
3/16
Health Insurance provides financial protection from a potentially devastating burden
Costs rising because everyone wants state of the art medicine when their own health, or
PROPERTY and LIABILITY AUTOMOBILE
3/16
The Personal Automobile Policy one of the major costs of operating an automobile
Perils Associated with Automobile Ownership/Operation
Tort liability lawsuits ma
PROPERTY and LIABILITY HOMEOWNER
3/16
Perils of Homeownership
Section I - Loss to your property
Section II Harm to others (either property damage or bodily injury to them)
Types of Policy
HO 1 Basic c
Point estimator= sample statistic such as x, s, or p that provides the point estimate of the population parameter
Statistical Inference= obtain information about a population rom information contained
LIFE INSURANCE
I cant die it would ruin my image.
fitness guru Jack LaLane 1914-2011
Until the mid-Nineteenth Century, life
insurance was considered a profanation
which transformed the sacred event of
Millionaire Mind Book Report
Will Ernst
Personal Finance 260
Jeff Johnson
April 7, 2016
Ernst
2
1. Some of my money scripts come from lessons learned from my parents. At a young age, my
father taught
The Five Financial Foundations
6.2 percent to social security
1.45 percent to Medicare
7.65 total FICA if you are an employee
Save 10 percent of your earning
Have 6 months of savings built up
Savings
Stocks, Bonds & Derivatives
Final Exam
Fall 2015
Prof. P. Lee
1. (35 points)
(1) Prove that the duration is a measure of interest rate elasticity. (10 points)
=
(1+)
,
=
(1+)+1
=
(1+)
1+
,
=
1+
, =
Team Number: 5
Score
(0~10)
8
10
10
10
10
10
Name
Reason
Participated in all team appointments.
She participated a lot in solving the problems.
He participated a lot and did a good presentation.
Did w
BONDS & STOCKS
9/17
MARKETABLE SECURITIES
Price is determined by Supply (sellers) and Demand (buyers)
Real and Financial Assets To own or to loan
DEBT SECURITIES - Loaned money - Bonds, Notes, Debentu