Econ 73200
Fall 2008
Prof. Daniele CoenPirani
Suggested Solution to Problem Set #1
Exercise #1 [25 pts.]. You have been elected the national accountant of a small country
(Costa Tepper) in Central America. You have the following list of transactions for
Carnegie Mellon University
Tepper School of Business
Production 70371
Midterm Examination
Name:
INSTRUCTIONS
1.
2.
3.
4.
5.
This is a closed book, closed notes exam.
All work must be shown on the exam. The formula sheet will be collected. No
credit will
Carnegie Mellon University
Tepper School of Business
October 8, 2008
Production 70371
Midterm Examination
Name:
Key
INSTRUCTIONS
1.
2.
3.
4.
5.
This is a closed book, closed notes exam.
All work must be shown on the exam. The formula sheet will be collec
1
Exercise 10, page 107
Initially, there are 2000 workers, of which 1900 are employed. Each works 40 hours per week.
The production function is
Y = 10L;
where L is measured in hours of labor.
(a) Total hours worked per week =1900 workers 40 hours per work
1. a) The Sharpe Ratios of the fund and the market portfolio are
SHF T
=
E (RF T )
rF
FT
=
=
SHF T
=
0:19 0:05
0:25
0:56
E (RM )
rF
M
0:10 0:05
=
0:20
= 0:25
The fact that the fund has a higher Sharpe ratio than the market justies
A conclusion.
s
b) To co
CARNEGIE MELLON UNIVERSITY
Tepper School of Business
Finance (70391)
Summer 2009
Practice Problems Topic 10 Solution
1. (a) For projects in the Brandy division
0:12 = 0:04 + (0:10
0:04)
)
B
B
= 1:333;
while for projects in the Wine division
0:10 = 0:04 +
CARNEGIE MELLON UNIVERSITY
Tepper School of Business
Finance (70391)
Summer 2009
Practice Problems Topic 6 Solution
CONCEPT QUESTIONS
1. The solution is in the back of Brealey, Myers and Allen.
2. Consider the following projects:
Project
A
B
C
C0
1000

CARNEGIE MELLON UNIVERSITY
Tepper School of Business
Finance
Summer 2009
Practice Problems Topic 5 Solution
CONCEPT QUESTIONS
1. Quiz from Chapter 6  Brealey, Myers and Allen.
2. See the table given below:
We begin with cash
ows given in the table and u
CARNEGIE MELLON UNIVERSITY
Tepper School of Business
Finance (70 391)
Summer 2009
Practice Problems Topic 4 Solution
CONCEPT QUESTIONS
1. The solution is in the back of Brealey, Myers and Allen.
2. P V = Div1 =(r
3. PA =
PB =
PC =
PC =
Div1
r
Div1
rg
g )
CARNEGIE MELLON UNIVERSITY
Tepper School of Business
Finance  70391
Summer 2009
Practice Problems Topic 3 Solution  Valuing
Riskless Cash Flows
Note:
Since many of the problems involve computations with annuities, let AT denote the present value
r;g
of
CARNEGIE MELLON UNIVERSITY
Tepper School of Business
Finance
Summer 2009
Practice Problems Topic 2 Solution
1. The solution to the quiz is in Brealey, Myers and Allen.
2. The following table summarizes the NPV and return of each project.
INVESTMENT
1
2
3
Econ 73200
Fall 2008
Prof. Daniele CoenPirani
Suggested Solution Problem Set #5
As indicated on Blackboard, this problem set is due on Friday, November 21, at the end of
your recitation session. Please consult the syllabus on the policy for homework ass
Econ 73200
Fall 2008
Prof. Daniele CoenPirani
Suggested Solution to Problem Set #4
As indicated on Blackboard, this problem set is due on Friday, October 31, at the end of
your recitation session. Please consult the syllabus on the policy for homework a
Econ 73200
Fall 2008
Prof. Daniele CoenPirani
Suggested Answers to Problem Set #3
As indicated on Blackboard, this problem set is due on Friday, October 24, at the end of
your recitation session. Please consult the syllabus on the policy for homework as
70492 Investment Analysis
Problem Set 5: Derivatives
1. a) Let ST be the S&P 500 value per dollar invested,
0.95 if ST < 0.95,
Payo from fund = ST
if 0.95 < ST < 1.15,
1.15 if ST > 1.15,
which is depicted in Figure 1.
b) Payo from call = maxcfw_ST x, 0.
Homework #4,
Investment Analysis
Suggested solutions
1. Bond arbitrage.
a. The yields are computed using the formula:
Using a numerical solver (e.g. the Excel one), we have ya = 3.63% and yb =
3.68%.
b. To see if there is an arbitrage, w
Tepper School of Business Finance (70391) Fall 2008
Professor LarsA. Kuehn
Your Name:
Practice Midterm Exam II
Instructions:
1. You have 50 minutes to complete this examination.
2. You are allowed to consult the provided formula sheet only.
3. Laptops a
Tepper School of Business Finance (70391) Fall 2008
Professor LarsA. Kuehn
Your Name:
Student ID:
Practice Midterm Exam I
with Solutions
Instructions:
1. You have 50 minutes to complete this examination.
2. You are allowed to consult the provided formul
Tepper School of Business
Practice Midterm Exam
Instructions
1. You have xxx minutes to complete this examination.
2. You are only allowed to consult the formula sheet provided at the end of the
exam.
3. Laptops are not permitted.
4. There are 4 parts on
70391 Finance
Summer 2009
Tepper School of Business
Final Exam
Instructions
1. You have xxx minutes to complete this examination.
2. You are only allowed to consult the formula sheet provided at the end of the
exam.
3. Laptops are not permitted.
4. There
Carnegie Mellon University
Chris Telmer
Fall 2008
Tepper School of Business
Midterm Exam #2
International Finance, 70398
Time allowed = 60 minutes
The exam is closedbook, but students may bring one 8.5 by 11 inch sheet
of paper with notes written on b
Question 3
Part (a)
0.04797 <= Depreciation rate on CNY, Nov 2006  Nov 2007
0.0361 <= U.S. 1year interest rate, Nov 2007
0.01187 <= UIPimplied CNY interest rate, if expected depreciation is same as realized
UIP, in the simple additive form, is
i_cfw_
Solutions
1. For each of the following statements, indicate whether the statement is true, or
false and justify your answer. Unjustied responses will receive a grade
of zero. Each question is worth 5 points.
(a) Poutine is the quintessential Canadian comf
2. (a) Denote the USDdenominated value of the basket as V and the number
of EUR in the basket, per unit of USD, as n. Then,
V = 1 + n Susd/eur ,
and what it means for the basket to be 40% USD and 60% EUR is
0.4 =
0.6 =
1
V
n Susd/eur
V
Solving these equa
Solutions
1. For each of the following statements, indicate whether the statement is true, or
false and justify your answer. Unjustied responses will receive a grade
of zero. Each question is worth 5 points.
(a) Here is a quote from The Economist, Septemb
Solutions
1. For each of the following statements, indicate whether the statement is true, or
false and justify your answer. Unjustied responses will receive a grade
of zero. Each question is worth 5 points.
(a) You are a swap dealer. You have just signed
MARKETING I (70381)
MIDTERM EXAM A
Name:_
10/17/07
Page 1 of 4
Section:_
There are 30 questions, multiple are answers possible!
A correct answer gives point, the total is 15 points. Good luck!
1. BCG matrix provides a tool for analyzing strategic busine