FIN 3103 HW Set 1 Name: AAZNx/gr \LE,\,
1. An investor is in a 30% combined federal plus state tax bracket. If corporate bonds offer 9.75%
yields, what must municipals offer for the investor to prefer them to corporate bonds?
I737 II- 07.3 lo $3570
2. Con

Name: ie%_
FIN 3103 Investments
Quiz 2
Answer all questions. Do not round intermediate calculations.
' 1. Westbrook Investments just paid a (annual) dividend of $1, which is expected to grow at 20% for
two years and then at 4% thereafter. If the required

FIN 3503 Investments Fall 2016 Exam I Study Guide
Disclaimer: The exam material can be comprised of anything covered in class. This is only a tool to aid studying for the exam.
Chapter 1: Background 8 questions
o Financial vs. Real Assets
o Market Effici

FIN 3503 - Quiz 3 NAME: \LQ 3 I
In the Last 12 months:
0 The market has returned 9% Rm ;: rm" p: :_ 0\ - 3 -: 6'73
0 The 3-month T-bill yielded 3%
0 Small stocks returned 10% _ C _ V m 0 ., \ 2 2 Z .7
,. d O
0 Large stocks returned 12% RM?) 5 25
o Valuerm

Options Markets: Introduction
Problem 1: a. What are the payoffs and net profits to an investor who holds a IBM call
option with exercise price $100? Assume the stock price at expiration is $110? What if
the stock price at expiration is $90? The price of

FIN 3503: INVESTMENTS
Test III
Practice Test
Question 1.
(12 points)
(a) (4 points) You have all your savings in an index fund that tracks the Russell 3000,
however, you are nervous about a potential market crash. Explain how you can
use options to hedge

Homework #3
DUE: The assignment is due at the beginning of class on Wed Dec 2.
The homework will be graded mostly based on completeness (refer to the syllabus for details).
You may work with other students, but you must submit your own work. Please, do no

Solution Key Practice Test for Test III
Question #1
(a) To hedge against a potential market crash you buy a put. Now if that market crashes the
losses on the Russell 3000 are offset by the put you bought on the index. This is a protective
put.
(b) Yum Yum

Question 1.
(a)
You have to draw the profit of the combined strategy (writing both the calls).
There are many ways you can do this. It may be helpful to set it up like this (but you dont have
to do all this for full credit on an exam):
Position
ST<170
170

Test 2 Study Guide
There are three big ideas underlying all tools and techniques that we use in
class:
1. Combining securities reduces the risk of the position. This is the basic idea underlying
diversification and hedging.
Diversification: The correlati

UNIVERSITY OF OKLAHOMA
Price College of Business
INVESTMENTS
MIDTERM II EXAM (Practice 1)
NAME AND
SECTION NUMBER BELOW
Instructions
Answer each of the problems below in the space provided. You will need only your pens/pencils and your
calculator; all oth

Midterm II Practice Exam 2 - Spring 2013
Solution Key
Question 1 - (14 points)
[(a) and (b) are very similar to CAPM practice problems. (c) is straight from the CAPM slides]
(a) Not possible. Both A and B are off the SML.
To show this, use the CAPM equati

Formula(Sheet(
S
2 = p(s)[r (s) E (r )]2 ! Variance of Asset's Return
s =1
1 T
2
2 =
(rt m) !
T 1 t=1
E (r ) = p( s )r ( s ) ! Expected Return (Mean)
1 T
m = rt !
T t =1
cov(rX , rY ) = p(s )(rX (s ) E (rX )(rY (s ) E (rY )!
Sample Variance
S
s =1
Sampl

INVESTMENTS
MIDTERM II EXAM (Practice 2)
WRITE YOUR NAME BELOW
Instructions
Answer each of the problems below in the space provided. You will need only your pens/pencils and your
calculator.
There are 7 questions and 100 points; there is also an extra cre

FIN 3503 - Midterm Exam 2 Study Guide
Guide only Exam will be over all lecture, quiz, and homework material
Chapter 5: Risk and Return (13 questions)
Arithmetic vs. Geometric vs. Dollar Weighted Return
Riskiness of Assets
Risk-Return Tradeoff
Capital

FIN 3503 - Quiz 3
In the Last 12 months:
0 The market has returned 6% 5 ( - r a e h \ 15
o The 3month Tbill yielded 1%
o Small stocks returned 5% Z F3 _ r : 6': 7 ; ,3 Z
0 Large stocks returned 7%
0 Value rms returned 2% cfw_\ _, f ~ U _
8% 3 V 3 Z 3 \

FIN 3103 - Quiz 3
NAME:_
In the Last 12 months:
The market has returned 11%
The 3-month T-bill yielded 1%
Small stocks returned 15%
Large stocks returned 10%
Value firms returned 12%
Growth firms returned 10%
Fake Company Inc. has the following risk profi

Securities Markets
Chapter 3
Key Points
Primary Markets
Secondary Markets
Dealer vs. Auction Markets
Buying on Margin
Short Selling
Regulation
2
Primary Market
Market for new issues of securities
Issuer receives proceeds from sale
Public offerings: R

Statistics Review
1
Holding Period Return
PS = Sale price
PB = Buy price
CF = Cash flow during holding period
Dividends, coupons, etc.
2
Holding Period Return
Since
we dont know what the Cash Flow or
future price will be, r is a random variable
People

Capital Asset Pricing
Model (CAPM)
Chapter 7
Key Points
CAPM
Relates the return of a security to its market risk
Implications
Passive Investing is efficient
Expected excess return will be proportional to
Beta
Multifactor Models
Arbitrage and APT
Fama

Macroeconomic and
Industry Analysis
Chapter 12
Key Points
Macroeconomic Policy
Full employment vs. Inflationary Pressures
Fiscal Policy
Taxation vs. government spending
Monetary Policy
Control of the money supply
Business Cycle
Expansions and Recessio

FIN 3503 Investments Spring 2017 Exam I Study Guide
Disclaimer: The exam material can be comprised of anything covered in class. This is only a tool to aid studying for the exam.
Chapter 1: Background 8 questions
o Financial vs. Real Assets
o Market Effi

Lecture Outline: Portfolio Theory
Disclaimer: This is only a lecture outline. It is not meant to be comprehensive or standalone decipherable. The actual in-class lectures explain the content, results, intuition, more
examples, and the relative importance

Derivatives
I
Keep in mind two big pictures:
1. What they are used for?
I
I
Hedge some underlying risk
Speculate on your beliefs or information
2. How to price derivatives
I
I
application
of
'
'
no
.
arbitrage
Step 1: replicate its payos with a portfolio

Lecture Outline: Overview of Securities Markets
Disclaimer: This is only a lecture outline. It is not meant to be comprehensive or standalone decipherable. The actual in-class lectures explain the content, results, intuition, more
examples, and the relati

Three Key Ideas of This Course, So Far
1. Combining securities reduces the risk of the overall position
I
Diversify
I
Benefits of diversification
I
Depend on how assets co-move together.
2. Risk/return tradeoffs
I
CAPM gives us a solid understanding of tr

Statistics Review
Investments
,
Investments
1
A Random Variable
The holding period return of a security:
rt+1 =
HPR =
I
I
I
I
Pt+1 Pt + Dt+1
Pt
ending price - begining price + (dividend or interest)
beginning price
rt+1 - return realized at t + 1
Pt is th

2/24/2014
Housing and wealth: The perils of not diversifying | The Economist
Free exchange
Economics
Housing and wealth
The perils of not diversifying
Jun 18th 2012, 20:21 by A.C.S | New York
THE financial crisis decimated the wealth of the average Americ