Exam 2_2014 Fall
MGMT 471 - Investment Analysis and Management
9:30 AM to 10:45 AM, October 16, 2014 (Thursday)
Name (print): _
Instructions
1. Please read the problems carefully and make sure you provide answers to all parts
of problems. For calculation
1. (VA Linux IPO and Internet bubble)
VA Linux Systems went public on December 9, 1999. Credit Suisse First Boston (CSFB) and some other
investment banks formed an underwriting syndicate to underwrite the deal for a gross spread (also called
underwriting
Exam 2 (100 pts.)
Stat 145 Spring 2013
Name: _
Section:
For credit show work or explain all answers.
1. A researcher designs a one-year study to examine the effect of physical activity and nutrition classes on
weight loss in obese adolescents aged 14-17.
Andrea Felipe
MGMT 471.002
Chapter 1 Homework
7. a. Toyota takes out a bank loan to finance the construction of a new factory
Real Assets
Financial Assets
Factory this asset is created by the
Loan this asset is created by the transaction
transaction
b. To
Chapter 13
Quantitative Problems Worksheet
1. A firm pays a current dividend of $1.00 which is expected to grow at a rate of 5%
indefinitely. If the current value of the firms shares is $35.00, what is the required rate of
return applicable to investment
Andrea Felipe
MGMT 471.002
Chapter 2 Homework
14. Suppose that short-term municipal bonds currently offer yields of 4%, while comparable
taxable bonds pay 5%. Which gives you the higher after-tax yield if your tax bracket is:
After tax yield: r = r_m/(1-t
1. (Return and risk; portfolio weights) There are three stocks (A, B, and C) with
E(rA)=0.04, E(rB)=0.12, E(rC)=0.09, and the
following variance-covariance matrix:
0.25 -0.15 0
-0.15 0.09 0
0
0
0.09
As an investor, you want to create a risky portfolio tha
1. (Expected utility and investment) Mary figures that she can earn $80 now and $40 in the
future. She likes to spend all her income within the two periods. Her utility function is
U(x,y)=xy, where x = money spent on current consumption, and y = money spe
1. (Expected utility and investment) Mary figures that she can earn $80 now and $40 in the
future. She likes to spend all her income within the two periods. Her utility function is
U(x,y)=xy, where x = money spent on current consumption, and y = money spe
Chapter 1 and 2
r (1t) = r m
or r =
rm
( 1t )
rm
r
where: t denote the investor's combined federal plus local marginal tax rate
r denote the total before-tax rate of return available on taxable on taxable bonds
r m is the rate on municipal bonds
r ( 1t )
Chapter 4 Mutual Funds and Other Investment Companies
1. Advantages of Investment Companies
a. Record keeping and administration
b. Diversification and divisibility
c. Professional management
d. Lower transaction costs
e. Calculation of Net Asset Value
2.
Chapter 3 Securities Markets
1. Primary Market
a. IPOs Bonds and Equities
b. Seasoned Equity Offerings
c. Private placements
1.1 Investment Banking
a.
Underwriters lead underwriter and underwriting syndicate
i.
Firm commitment or best efforts
b.
Prospectu
Chapter 2 Asset Classes and Financial Instruments
1. Money Market
a. Treasury Bills
i. Discounted Security
ii. Issued in multiples of $100 or $10,000
iii. Maturity 4, 13, 26, or 52 weeks
iv. Purchased at Auction or Secondary market
v. Bid-Ask Spread
vi. B
MGT 471 Investments
Chapter 1 The Investment Environment
Investment is the sacrifice of something now for expected better prospects to be
derived later.
An investment in knowledge pays the best interest Benjamin Franklin one of
the Founding Fathers of USA
Chapter 17 Macroeconomic and Industry Analysis
1. The Global Economy
A top-down analysis of firms prospects must start with the analysis of the global
economy.
Countries are different in their legal systems, investor protection laws, trade policies,
custo
Mid}? l
Quantitative Problems Worksheet
1. A ﬁrm pays a current dividend of $1.00 which is expected to grow at a rate of 5%
’ indeﬁnitely. If the current value of the ﬁrm’s shares is $35.00, what is the required rate of
return applicable to investment ba
1. You are considering an investment in a mutual fund (class A) with a front-end load of 3% and an
expense ratio of 1.0%. You can invest instead in a bank CD with an interest rate of 1% per annum.
(a) If you plan to invest for 3 years, what annual gross r
1. You are considering an investment in a mutual fund (class A) with a front-end load of 3% and an
expense ratio of 1.0%. You can invest instead in a bank CD with an interest rate of 1% per annum.
(a) If you plan to invest for 3 years, what annual gross r
R
A
B
rf
sigma
25%
12%
9%
tho
50% -100.0000%
30%
MVP condition
numerator
denominat
Wa
Wb
R risk port
-1.8900%
-0.0504
37.500%
62.500%
16.875%
Wa
Wb
0.375
0.625
61.905%
R
A
B
rf
sigma
10%
14%
3%
tho
40%
20.0000%
50%
MVP condition
numerator
denominat
Wa
Wb
Date
Trade Type
10/7/2015 9:57:00 Stock: Sell at Market Open
10/7/2015 9:57:00 Stock: Sell at Market Open
10/7/2015 9:57:00 Stock: Sell at Market Open
10/7/2015 9:57:00 Stock: Sell at Market Open
9/29/2015 12:48:00 Stock: Buy at Market
9/24/2015 12:33:00
We should chose the portfolio named 471Chen to open to retail investors as of 09/30/2014 (the
first half simulation period) based on the idea in the paper, the mutual fund incubation.
It is chosen because it has the best performance during the incubation
Exam 4_2014 Fall
MGMT 471 - Investment Analysis and Management
7:30 AM to 9:30 AM, December 9, 2014 (Tuesday)
Name (print): _
Instructions
1. Please read the problems carefully and make sure you provide answers to all parts
of problems. You have an option
Exam 3_2014 Fall
MGMT 471 - Investment Analysis and Management
9:30 AM to 10:45 AM, November 13, 2014 (Thursday)
Name (print): _
Instructions
1. Please read the problems carefully and make sure you provide answers to all parts
of problems. You have an opt