FINANCE 3000
STOCK PROJECT
GROUP MEMBERS:
AMAZON
SYMBOL: AMZN
Price per share as of 4:00pm
on 2/17/2015: $375.43
Total of shares purchased:332
Total money invested:
$124,642.76
Free Cash Flow
Convert income statement from accrual
basis to cash basis: 178,
Uber Technology Inc. is an online transportation network company which develops,
markets and operates on the Uber mobile app. It allows consumers with smartphones to submit a
trip request, which is then routed to Uber drivers who use their own cars. Name
CHAPTER 15
OPTIONS MARKETS
0 Options provide numerous opportunities to modify the risk prole of a portfolio. The
simplest example of an option strategy that increases risk 1s investing in an all options
portfolio of at-the-money options (as illustrated 1n
Futures market participants
Hedger: want to reduce risk
(a) A consumer of corn who will buy in the future
(b) farmer with corn to harvest and sell in the future
Speculators:
investor who will take risk in to profit from price change(i.e. risk
taker)
Not
Modified Internal Rate of
Return (MIRR)
Avoids multiple IRR
Specifies reinvestment of cash flows
1
Unequal Project Lives:
possible replication
Consider projects with unequal lives
that are mutual exclusive
E.g. Project C = 6yrs
Project F= 3yrs
Project F c
Selling a call option
AKA: writing a call
If E= $100 and you write a call, you may have to sell at $100
regardless of ST . Positive payoff to holder is negative to writer
Say ST = $180
Covered call( you already own the share you sell )
Selling at at $1
Baruch College, The City University of New York
Department of Economics and Finance
Finance 9771
Professor G. Webb
Problems on the Time Value of Money
1. If you deposit $8,000 in a bank account that pays 7.2% interest annually, how much would
be in your a
Problems on the Time Value of Money
Answers and Solutions
$5,000*(1.072)-30 = $621.05
3
$800*1.0752 = $924.50
c
$800*1.075-1 = $744.19
d
$800*1.075-2 = $692.27
a
$200*1.06310 = $368.44
b
$200*1.12610 = $655.26
c
$200*1.063-10 = $108.57
d
$200*1.126-10 = $
Problems on the Time Value of Money
Answers and Solutions
1
$8,000*(1.072)5 = $11,325.67
2
$5,000*(1.072)-30 = $621.05
3
750
200
ln FV
c
$800*1.075-1 = $744.19
d
$800*1.075-2 = $692.27
a
$200*1.06310 = $368.44
b
$200*1.12610 = $655.26
c
$200*1.063-10 = $1
FIN3000 Principles of
Finance
September 19 Class VI
Andrea Golfari
Return and Risk
1.Review the concept of return, its components, the forces that
affect the level of return, and historical returns.
2.Discuss the role of time value of money in measuring r
FIN3000 Principles of
Finance
September 12 Class IV
Andrea Golfari
Chapter 5
Visualizing and Computing Time-Value of
Money
Principles Applied in this Chapter
5.1
5.2
5.3
5.4
Using Timelines to Visualize Cash Flows
Compounding and Future Value
Discount
FIN3000 Principles of
Finance
September 14 Class V
Andrea Golfari
Financial Calculator
Financial Calculator
Financial Calculator
Compound Interest
What does it mean?
1
200
200 x (1.03)
206
2
3
4
206 x (1.03) 212.1 x (1.03) 218.5 x (1.03)
212.1
218.5
225
5
FIN3000 Principles of
Finance
October 17 Class XI
Andrea Golfari
Computing IRR
Risk: The Other Side of the Coin
Risk of a Single Asset
Standard Deviation: An Absolute Measure of Risk
Standard Deviation: An indicator of an assets risk, it measure the dis
FIN3000 Principles of
Finance
November 16
Andrea Golfari
Question from Homework
The Behavior of Market Interest Rates
What Causes Rates to Move?
Inflation is the most important variable to have an
effect on market interest rates.
G,
Expected inflation go
FIN3000 Principles of
Finance
October 6 Class X
Andrea Golfari
Risk: The Other Side of the Coin
Risk: the uncertainty surrounding the actual
return that an investment will generate.
Risk-Return Tradeoff: the relationship
between risk and return in which i
FIN3000 Principles of
Finance
October 6 Class X
Andrea Golfari
Risk: The Other Side of the Coin
Risk: the uncertainty surrounding the actual
return that an investment will generate.
Risk-Return Tradeoff: the relationship
between risk and return in which i
FIN3000 Principles of
Finance
November 14
Andrea Golfari
Specialty Issues
Collateralized Mortgage Obligations
Collateralized Mortgage Obligations (CMOs): mortgage-backed bond pool that
is divided into tranches, or classes of investors, based on whether
HOMEWORK #1
Name:
1. Classify the following examples of investments as
Fixed-Income, equity, or derivative:
Investment:
Classification:
A share of Wall-Mart common stock
A Treasury bond
A call option on IBM stock
An IBM bond
A gold futures contract
A shar
REFRESHER
F I N A N C I A L S TAT E M E N T A N A LY S I S
BALANCE SHEET IDENTITY
The most important relationship you can bring to
this class (from your accounting), is the formula
of the Balance Sheet Identity
A
L
E
BALANCE SHEET
INCOME STATEMENT
CASH F
CHAPTER 4 Questions & Answers
1. A firm has current sales of $6,000 and a profit margin of 6.5 percent. The firm
estimates that sales will increase by 4 percent next year and that all costs will vary in
direct relationship to sales. What is the pro forma
Speculative Markets Class Homework #4 Prof. Joel Rentzler
Test whether the gold and copper futures markets are at full carry (i.e. whether the convenience
value is approximately zero) by examining the relationship on October 12, 1988 between the
December
Fall 2016 Midterm 1
Name_
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) If you put $200 in a savings account at the beginning of each year for 10 years and then allow the
account to compound for
Second Midterm Version 3 - Finance 3000
Name_
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
1) According to the pecking order theory, firms should issue equity before issuing debt because
issuing debt increaes company's
Second Midterm - Finance 3000
Name_
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
1) The preliminary version of a prospectus is called a red herring.
1)
2) Generally, decreases in leverage result in increased return and
Second Midterm - makeup Exam- Version D- Finance 3000
Name_
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) The Convertible Bond A has a par value of $1000, conversion ratio of 40, and market price
Exam
Name_
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) An annuity with an infinite life is called a(n) _.
A) option
B) primia
C) deep discount
D) perpetuity
1)
2) Dan plans to fund his individu