Score: 120
9.
out of 120 points (100%)
award:
10 out of
10.00
points
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a longterm government and corporate bond fund, and the third is a T-bill money market f
3
1.
Underwriting is one of the services provided by _.
A.
B.
C.
D.
2.
Under firm commitment underwriting the _ assumes the full risk that the shares cannot be sold to the
public at the stipulated offering price.
A.
B.
C.
D.
3.
$90,000
$1,290,000
$2,390,0
Score: 120
6.
out of 120 points (100%)
award:
10 out of
10.00
points
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a longterm government and corporate bond fund, and the third is a T-bill money market f
Score: 150
10.
out of 150 points (100%)
award:
10 out of
10.00
points
I am buying a firm with an expected perpetual cash flow of $850 but am unsure of its risk. If I think the beta
of the firm is zero, when the beta is really 1, how much more will I offer
Score: 120
11.
out of 120 points (100%)
award:
10 out of
10.00
points
A project has a 0.76 chance of doubling your investment in a year and a 0.24 chance of halving your
investment in a year. What is the standard deviation of the rate of return on this in
Score: 150
15.
out of 150 points (100%)
award:
10 out of
10.00
points
Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the
inflation rate, IR. IP is expected to be 3% and IR 7%. A stock with a beta
Score: 150
3.
out of 150 points (100%)
award:
10 out of
10.00
points
A firm has current assets that could be sold for their book value of $22 million. The book value of its fixed
assets is $60 million, but they could be sold for $90 million today. The fir
8/19/14&
Chapter 7. Capital Asset Pricing
Model and Arbitrage Pricing
Theory
Ch7. Capital Asset Pricing Model
and Arbitrage Pricing Theory
Part 1. CAPM model: CAL and SML
Part 2. Index models
Part I. Arbitrage and Multi-factor models
Part3. CAPM model:
Score: 150
12.
out of 150 points (100%)
award:
10 out of
10.00
points
The market consensus is that Analog Electronic Corporation has an ROE = 9% and a beta of 1.95. It plans
to maintain indefinitely its traditional plowback ratio of 2/5. This year's earni
Practice questions: Quiz 3
FIR 3710
1. If the daily returns on the stock market are normally distributed with a mean of 0.05%
and a standard deviation of 1.00%, the probability that the stock market would have a
return of -23.00% or worse on one particula
Score: 120
5.
out of 120 points (100%)
award:
10 out of
10.00
points
Consider the following table:
Scenario
Severe recession
Mild recession
Normal growth
Boom
Stock Fund
Bond Fund
Probability Rate of Return Rate of Return
0.10
32%
10%
0.15
10%
6%
0.35
22%
Chapter 14 - Financial Statement Analysis
CHAPTER 14
FINANCIAL STATEMENT ANALYSIS
1. N
a. Inventory turnover ratio in 2009.
= 2850 / (490 + 480) x .5 = 1.47
b. Debt equity ratio in 2009.
= 3340 / 960 = 3.48
c. Cash flow from operating activities in 2009.
Score: 80
1.
out of 80 points (100%)
award:
10 out of
10.00
points
Suppose that in a wave of pessimism, housing prices fall by 10% across the entire economy.
a. Has the stock of real assets of the economy changed?
No
b. Are individuals less wealthy?
Yes
e
Review for Exam 1
Instructions: Please read carefully
The exam will have 25 multiple choice questions and 5 work problems covering
chapter 1, 2, 3, 4, 14, 16.
Questions in the multiple choice section will be either concept or calculation
questions. The ca
Score: 80
6.
out of 80 points (100%)
award:
10 out of
10.00
points
Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares
outstanding at time t. Stock C splits two-for-one in the last period.
A
B
C
P0
81
Score: 150
5.
out of 150 points (100%)
award:
10 out of
10.00
points
Miltmar Corporation will pay a year-end dividend of $3, and dividends thereafter are expected to grow at the
constant rate of 4% per year. The risk-free rate is 4%, and the expected retu
Score: 120
7.
out of 120 points (100%)
award:
10 out of
10.00
points
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a longterm government and corporate bond fund, and the third is a T-bill money market f
Score: 80
8.
out of 80 points (100%)
award:
10 out of
10.00
points
A T-bill with face value $10,000 and 79 days to maturity is selling at a bank discount ask yield of 2.6%.
a. What is the price of the bill? (Use 360 days a year. Do not round intermediate
Score: 80
7.
out of 80 points (100%)
award:
10 out of
10.00
points
Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares
outstanding at time t. Stock C splits two-for-one in the last period.
A
B
C
P0
95
Risk and Return: Past and Prologue
1. The holding period return is the rate at which the investor's funds have grown
over the _.
a.
last year
b.
last quarter
c.
last month
d.
investment period
2. The _ average ignores compounding.
a.
geometric
b.
arithmet
Score: 120
8.
out of 120 points (100%)
award:
10 out of
10.00
points
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a longterm government and corporate bond fund, and the third is a T-bill money market f
Score: 80
2.
out of 80 points (100%)
award:
10 out of
10.00
points
Lanni Products is a start-up computer software development firm. It currently owns computer equipment
worth $30,000 and has cash on hand of $20,000 contributed by Lanni's owners.
Lanni ta
Score: 150
6.
out of 150 points (100%)
award:
10 out of
10.00
points
Consider the following information:
Portfolio
Risk-free
Market
A
Standard
Deviation
0%
34
23
Expected Return
7.0%
12.8
11.5
a. Calculate the sharpe ratios for the market portfolio and po
Score: 110
2.
out of 110 points (100%)
award:
10 out of
10.00
points
Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $90 per share.
The initial margin requirement was 50%. (The margin account pays no interest.) A yea
Chapter 05 - Risk and Return: Past and Prologue
Chapter 05 Risk and Return: Past and Prologue Answer Key
Multiple Choice Questions
1. You put up $50 at the beginning of the year for an investment. The value of the investment
grows 4% and you earn a divide
Score: 120
3.
out of 120 points (100%)
award:
10 out of
10.00
points
The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 1.75 and a residual
standard deviation of 30%.
a-1. Calculate the total variance for an increase of 0.2
A cost that is obtained in large chunks and that increases or decreases only in response to
fairly wide changes in the activity level is known as a step-variable cost.
TRUE
Fixed cost per unit increases as activity decreases and decreases as activity incr
Chapter 05 - Risk and Return: Past and Prologue
Chapter 05 Risk and Return: Past and Prologue Answer Key
Multiple Choice Questions
1. You put up $50 at the beginning of the year for an investment. The value of the investment
grows 4% and you earn a divide
Score: 110
6.
out of 110 points (100%)
award:
10 out of
10.00
points
On January 1, you sold short one round lot (that is, 100 shares) of Lowe's stock at $29.00 per share. On
March 1, a dividend of $2.10 per share was paid. On April 1, you covered the shor
Score: 120
4.
out of 120 points (100%)
award:
10 out of
10.00
points
Consider the following table:
Scenario
Severe recession
Mild recession
Normal growth
Boom
Stock Fund
Bond Fund
Probability Rate of Return Rate of Return
0.10
46%
16%
0.25
22%
11%
0.40
5%
BARUCH COLLEGE Zicklin School of Business
ECO 3250 SPRING 2016
ASSIGNMENTS & GRADING
MW 7:30PM-8:45PM, VC 7-150, 01/29/2016 - 05/28/2016, QMW 43887
Prof. Jonathan Gold
E-mail: Jonathan.Gold@baruch.cuny.edu
Office Hours: Wednesday 4:30pm 5:30pm
Midterm Exa
HEDGING A/P & A/R WHEN TO DIVIDE, WHEN TO MULTIPLY
APR 2016
Let's say a US-based company has a three month Singapore Dollar accounts receivable
equal to SGD 250,000. Using a money market hedge (MMH), the strategy is to borrow
for 90 days from a local bank
Finance 3710/PTR Spring 2016
Prof. T. Hanan Eytan
Course Outline
Course Description
This course introduces students to the fundamental principles and theories of
financial asset pricing and valuation. It provides students with a rigorous analysis
of moder
BARUCH COLLEGE DEPARTMENT OF ECONOMICS & FINANCE
Professor Chris Droussiotis
LECTURE 7
Bond Prices, Yields and Portfolio Management (Chapters 10 & 11)
Money Terms:
Amount
o Face Value / Par Value ($1,000)
o Market Value quoted as a % of Face Value (price
BARUCH COLLEGE DEPARTMENT OF ECONOMICS & FINANCE
Professor Chris Droussiotis
LECTURE 13
Futures and Forwards An Overview
Example 1
To see how futures and forwards work and how they might be useful, consider the portfolio
diversification problems facing a