WELCOME TO FIN 201
As you enter, tell me your name Pick up
Syllabus Index Card Paper for Name Card
Fold paper so it stands, write 1st name BIG Read syllabus until class starts
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TODAY WE WILL.
Introductions Interest inventory on note card Go over sy
1. Albert Pujols hit 47 home runs in 2009. If his home-run output grew at a rate of 12% per year, what would you expect Albert's home run total to be at the end of 5 years? n=5 i = 12% PV = 47 FV = ? FV = PV (1+r)n 47 (1.12)5 47(1.762) =82.83
2. If you we
1. Set up a yearly amortization schedule for a $25,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 10 compounded annually. PV = 25,000 FV = 0 n=3 i = 10% PMT = ? 10,052.87
Begin bal $25,000.00 $17,4
Answers Chapter 7 h/w
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1. a. $1,000(1 + .05) = x
x = $1,000(1.629) = $1,629
$1,000 grows to $1,629 at 5% for ten years, of which $629 in interest. The 1.629 is the
interest factor for the future value of $1 for ten years at 5%.
b. If the interest is wit
THE COLLEGE OF NEW JERSEY SCHOOL OF BUSINESS DEPARTMENT OF FINANCE & INTERNATIONAL BUSINESS
FIN 201: Fundamental Financial Methods Syllabus, SPRING 2012 Professor: Office: Telephone: Email: Office hours: Required Materials 1. CFIN, 2nd Edition2012, Beasle
CHAPTER 7 Stocks Characteristics and Valuation
Features of common stock Determining common stock values Preferred stock Determining preferred stock values
WSJ Article
Next Class Read "Placing your investing chips in the right countries" Q: What di
Ch. 6 Bonds and Their Valuation
Key Features of Bonds Bond Valuation Measuring Yield Assessing Risk 5 Important Relationships
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What is a bond?
Longterm debt instrument Borrower makes payments of principal and interest on specific dates to bondholder
Solutions
CHAPTER 4
(Most solutions are rounded in the final answers, not in the intermediate computations.) 0 6% -500 1 2 FV = ? FV2 = $500(1.06) 2 = $500(1.1236) = $561.80
4-1
Using a financial calculator, enter N = 2, I/Y= 6, and PV = -500; compute FV
14. Your broker faxed the following information about bonds that you are considering as
potential investments. Unfortunately a fax machine is blurring some of the items. Fill in the
missing data from the information sent. All bonds pay semiannual interest
Measures of Risk:
-Beta Coefficient
-Standard Deviation
Required return:
r(s)=r(f)+(r(m)-r(f)*beta
Current yield:
PMT/PV
Yield to maturity:
You are finding i
A=L+OE (Assets=Liability plus Owners Equity)
Business risk and financial risk make up what kind o