BUS 422 MIDTERM EXAM 1
DR. JING ZHAO
INSTRUCTIONS: You are allowed to use: 1. Calculator and 2. Formula Sheet
Answer all of the following multiple-choice questions. Only one possible answer is correct.
When finished, please only return both the exam and a
BUS 422 MIDTERM EXAM 1 SPRING 2014
DR. JING ZHAO
INSTRUCTIONS: You are allowed to use: 1. Calculator and 2. Formula Sheet
Answer all of the following multiple-choice questions. Only one possible answer is correct. When
finished, please only return both th
answer
my
Bus 422
Professor Carl Davis
Fall 201 1
Quiz #1
Name:
Date:
TrueIFalse [2 [pints each}
I. E All investment decisions are a tradeoff between return and risk.
2. F“ Secondary markets are where new securities are sold.
3. r ' Limit Orders ensure ex
Exam 2 BUS 422 NAME
Professor Davis
WM
1. The expected return on the market for next period is 16%. The risk free rate of return is 7%,
and Wilson Products Company has a beta of 1.1. In using this information to estimate the
required rate of return for Wi
Review Problems for Quiz #1
Margin
Federal Reserves sets the initial margin at 50%
Maintenance Margin is 25%
If an investor has a margin account and desires to purchase 100 shares selling at $50
How much does the investor have to put up to buy the stock?
BUS 422
Formula Sheet FINAL EXAM
1.
rBD =
D 360
F
n
Pr ice =FaceValue (1 - rBD
n
)
360
365/ n
D
rEAR =+
1
P
rEAR =( 1 +HPR )
HPR =
2.
-1
365/ n
-1
Pt - Pt - 1 +Dividendt
Pt - 1
Trading on Margin:
Margin =
(number of shares bought)*price-(loan +interes
(ifseacf
rig/sag
Exam 4 BUS 422 NAME
Professor Davis
Multipie Choice (3 pts. Each)
1. Select the INCORRECT statement:
a. Diversication can reduce the total risk for a portfolio.
@ Proper diversication can eliminate market risk.
0. The primary factor aff
First Exam BUS 422 Dr. Jones NAME_
Fill in the Blanks: (3 points each)
Use 4 decimal places to the right of decimal to calculate the first 3 problems.
_ 1. The geometric mean for inflation for 1920-2003 was 2.57%, and for the S&P 500 stocks
was 10.23%. Th
BUS 422
SPRING 2013 EXAM 2
DR. JING ZHAO
INSTRUCTIONS: You are allowed to use: 1. Calculator and 2. Formula Sheet
Answer all of the following multiple-choice questions. Only one possible answer is correct.
When finished, please return both the answer shee
BUS 422
Formula Sheet EXAM 3
1.
Prob(r ) * r
E(Return)
i
i
i
Prob(r ) * (r E (r )
Var(Return)
i
2
i
i
Prob(r
Cov(rA , rB )
Ai
, rBi ) * (rAi E (rA ) * (rBi E (rB )
i
Corr (rA , rB ) A, B
2.
Cov(rA , rB )
(rA ) (rB )
Cov(rA , rB ) A, B (rA ) (rB )
BUS 422 EXAM 2:
DR. JING ZHAO
INSTRUCTIONS: You are allowed to use: 1. Calculator and 2. Formula Sheet
Answer all of the following multiple-choice questions. Only one answer is correct. When finished, please
return the answer sheet and the exam with your
BUS 422 EXAM 3:
DR. JING ZHAO
INSTRUCTIONS: You are allowed to use: 1. Calculator and 2. Formula Sheet
Answer all of the following multiple-choice questions. Only one answer is correct. When finished, please
return the answer sheet and the exam with your
Financial Statement Analysis (Ratio Analysis) involves looking at things in two ways:
o Examining the trends in the firms performance over time
o Comparing the Firms performance to other firms in the same industry.
Major Types of Ratios
o Liquidity Ratio
Chapter 6 The Returns and Risk from Investing
Investors need a good understanding of the returns and risk that have been experienced to date
before attempting to estimate returns and risk, which they must do as they build and hold
portfolios for the futur
Chapter 15- Company Analysis
Fundamental Analysis
o Involves analyzing basic financial variables in order to estimate the companys intrinsic
value.
Includes Sales, profit margins, depreciation, tax rate, sources of financing and
asset utilization.
o Addi
Chapter 1
First must understanding investments & the investment process
o Need to be able to develop reasonable expectations
Helps investors say no
Helps investors judge success
Helps investors plan strategies
o What is an investment?
Commitment of fu
Common Stock Valuation
General Concepts
o The valuation process is an art not an exact science.
o The process requires inputs based on estimates of the future which is
uncertain and most likely will be wrong.
o When an investor calculates an intrinsic val
Chapter 2
ASSET CLASSES AND FINANCIAL
INSTRUMENTS
1
The Money Market
Money
market: Short-term debt instruments
Treasury
bills (T-bills): Short-term federal government
borrowing
Certificate
of Deposit (CD): Time Deposit with bank
Commercial
Repos:
pap
. Answer
My
Bag 422
Professor Cari Davis
Fall 2011
' Quiz #1
Name:
M
Date:
Ernie/False (2 going each
I. E All investment decisions are a tradeo between cfw_china and risk.
2. I Secondary markets are where new securities are sold.
3. E ' Limit Orders ensur
Common Stock Investing
Strategies
Passive Strategies
Natural Outcome of belief in efficient markets
Investor does not seek to outperform simply in line with market
Emphasis is on minimizing cost and time spent on mgmt.
Buy & Hold
Indexing
Active Strategie
Chapter 3
Must understand indirect investing as an investment alternative
o What is it?
The buying and selling of the shares of investment companies
which in turn hold portfolios of securities.
o What is an Investment Company
A company that engages in t
Chapter 7 Notes
Investors attempt to reduce risk to the extent possible without affecting returns by building
diversified portfolios
Realized returns are important because:
o Need to know how their portfolios have performed
o Help investors form expectati
Chapter 8 Notes-Portfolio Selection and Asset Allocation
Risky assets should be evaluated on the basis of their expected returns and risk as measured by the
standard deviation and that portfolio expected return and risk can be calculated based on these in
Study Guide for Quiz 1
Professor Davis 5 Steps to Wealth Accumulation
1.
Spend Less Than You Make
2.
Use Credit Wisely
3.
Establish an Emergency Fund
4.
Protect yourself from financial peril
5.
Invest for the Long Term
Investing is a Process
All investmen
Quiz 2 Study Guide
This is to help not replace studying the notes and examples on moodle that will be
covered for quiz 2.
Passive Investing Vs. Active Investing-Know what they are and how they are
different
Top Down Common Stock Analysis
Dividend Discount
Chapter 17
Investors must understand bond yields and prices
o Bond yields and interest rates are the same concept
o For short-term risk free securities, the nominal interest rate is a function of
the real rate of interest and the expected inflationary pre
Chapter 22 Notes-Evaluation of Investment Performance
Must consider how well you are doing as investor over time.
Everyone wants to know how they are doing either in managing their own
portfolios or entrusting their money to others to manage for them.
Fra
1
Chapter 5
RISK AND RETURN:
PAST AND PROLOGUE
Single-Period Rate of Return
Holding-period return (HPR): Rate of growth over an
investment period, i.e. dollars earned per dollar invested
End Beg CF
HPR
Beg
Annual
percentage
Effective
APR
HPR
* n n rate
EFFICIENT DIVERSIFICATION
Chapter 6
1
Diversification: Roulette
Wheel
Fair roulette wheel
40 slots, 20 black, 20 red (no house slots)
probability of red = 50%
Bet $10,000 on red, one spin. Is it risky?
50% prob of 100% loss
Bet $1 per spin on 10,000 sp
Chapter 3
SECURITIES MARKETS
1
Issuing Securities
Secondary market: Market for already-existing securities , i.e., the stock
market. Where do stocks come from?
Primary market: Market for new issues of securities (e.g. IPOs, SEOs)
An issue can be either a
Investment Management Process
I.
Determine investors tolerance for risk
a. Questionairre
i. Objective Issues (Time horizon, age, investment objective)
ii. Subjective Issues (Emotional ability to handle volatility)
II.
Determine appropriate asset classes t
Mutual Fund Evaluation
Fundamental Evaluation
Review Investment Objective-Match with Funds Objective.
Examine Investing Style-Style Box-Has style been consistently
applied?
Managers Experience
o Years Managing mutual funds
o Years Managing this particu
ESTATE PLANNING:
PROBLEMS ANSWERS
1.
a.
b.
c.
2.
a.
b.
c.
3.
a.
b.
4.
Because everything is jointly owned, Kayla does not need a will (and therefore does not
need a codicil). She should, however, have a letter of last instructions and a living will
to dir
NCSU
BUS 422
Performance Homework
Calculate the Arithmetic; Mean Return for the 5 years
)8 + (g m 5. 73.3.1: .233" 9% . Lna
w. . v x. I! aw-a._'L-
M. 5:33,
6 Ifyou would have invested $10,000 in this mutual fund at the beginning of 2012
how much would
Large Cap Value Stock Fund
Monthly Report: October 31, 2016
Strategies
Invest in stocks that are trading at a value less than their intrinsic value
Sector and industry analysis plays an important role in identifying
equities that are expected to increas