SECTlObL _ _
Homework for Experiment 1
Problem 1.1 Use the information in Tables 1.4 and 1.5 to complete Table
1.8. Find the mean (average) price by adding all the prices posted during
the round and dividing by the number of transactions. Find the
Chauncey G. Joyce
Quiz 2 Guidance
Be able to define the following terms.
Money markets (and instruments)
o A money market is the subset of the fixed income market where large institutions
and government manage their short-term cash needs, and it specializ
Different ways of expressing rates of return
Average returns (arithmetic & geometric)
total return =
P1 + DIV P0
capital gains yield =
Portfolio Theory: How should a risk-averse investor optimize their
We made assumptions about investors preferences concerning
risk, and about the nature of the available investments.
Asset Pricing Model: Assume that all investors behav
Six months ago you purchased a $100,000, 2% coupon bond with 7 years to
maturity. The bond makes semi-annual coupon payments, and, at the Bme
of purchase, had a yield-to-maturity of 2.40%.
a) Calculate price (per hundred dollars of face value
a. Time-weighted average returns are based on year-by-year rates of
Return = [(Capital gains + Dividend)/Price]
(110 100 + 4)/100 = 0.14 or 14.00%
(90 110 + 4)/110 = 0.1455 or 14.55%
(95 90 + 4)/90 = 0.10
BC SPCA FARM ANIMAL WELFARE NEWS
FAST FACTS ABOUT EGGS AND EGG-LAYING HENS
A hen can lay about 320 eggs per year at her highest production. This number
decreases as the hen ages.
In the wild, chickens can live for 5-11 years, but thei
CHICKEN FACT SHEET
Chickens form strong family ties. A mother hen
begins bonding with her chicks before they are even
born. She will turn her eggs as many as five times an
hour and softly cluck to her unborn chicks, who will
chirp back to her and to one a
Ohio Chicken Facts
Ohio produced 60 million broiler chickens in 2011.
Ohios annual broiler chicken production is valued at $189.6 million.
In 2012, Ohio produced more than 379 million pounds of chicken.
Ohio ranks 16th nationally for broiler
2405 WEST BIRCHFIELD ROAD
YAKIMA, WA 98901
Facts about Feral Cats
Basic Facts about Feral cats
A feral cat is a wild animal, not to be confused with stray and free-roaming cats that are, or onc
Bonds are LOANS
Issuer receives money now
Issuer promises to pay money back according to a schedule
Treasury Securities (Federal government debt)
T-bills pure discount bonds with original maturity less than one
Stockholders have claim to the residual earnings of the firm,
hence receive any dividends paid.
Stockholders elect directors.
Stated dividend must be paid before dividends can
be paid to common stockholders.
Cost of Goods Sold
Income before taxes
LIBC: Binomial Option
The Binomial Pricing Model
The binomial model prices options by deriving
the price of a portfolio of the underlying stock
and a risk free bond that replicates the payoffs
on the option.
The option and the replicating po
LIBC: The Black-Scholes
Option pricing theory was pioneered by Black and Scholes, thus the BlackScholes formula for options that we are about to see. Myron Scholes earned
the Nobel prize in economics in 1997, together with Bob
LIBC: Introduction to
A call option gives the buyer of the call the right, but not the
obligation, to buy a security or commodity or index from the seller of
the option at some pre-specified price (exercise or strike price,
LIBC: Real Options
Types of Real Options
DCF and Real Options
Option to Abandon
Option to Expand
Option to Wait
A real option exists when a subsequent
decision or reaction affects the future
Example: If you own a pie
Options (Taught by Slezak)
Follow-up or finish Options / Another small topic
Bring in JBs boss (Hedge Fund Manager)
He will likely have 2-3 topics for us to choose from that he will talk to us about
KEY: Hes looking for a summer analyst this
2. Why do most professionals consider the Wilshire 5000 a better index of the performance of
the broad stock market than the Dow Jones Industrial Average? (LO 2-2)
While the DJIA has 30 large corporations in the index, it does not represent the overall ma
Consider a U.S. government bond with as 6 3/8% coupon that
expires in five years.
The Par Value of the bond is $1,000.
Coupon payments are made semi-annually (June 30 and December 31 for this particular
Since the coupon rate is 6 3/8%,
University of Cincinnati
Lindner College of Business
Spring Semester 2017
Instructor: Brian Kluger
Office: Lindner Hall 407
Voice: (513) 556-1688
E-mail: [email protected]
Office hours: by appointment
Section 001 meet
Extra Credit Exercise
In this exercise you are given an initial gift of $500 trading dollars. You can purchase stocks, or hold your
money in cash. More detailed information about the available stocks is provided below. If you hold
some or all of your m
There is a market where economic agents can borrow
or lend money. The interest rate, or discount rate is
the price of loans.
Money now can be exchanged for money later.
Money later can be exchanged for money now.
(1 + k )t