Name: _ PSU ID #: _
Homework 3 (For Credit)
Due: At the beginning of class Monday, March 13th, 2017
NO LATE WORK WILL BE ACCEPTED!
A hard copy needs to be submitted and you must show work for credits.
NOTE: YOU SHOULD MAKE A COPY OF YOUR HOMEWORK ANSWERS
Name: _ PSU ID #: _
Homework 1 (For Credit)
Due: At the beginning of class Monday, Feb 6th, 2017
NO LATE WORK WILL BE ACCEPTED!
A hard copy needs to be submitted and you must show work for credits.
NOTE: YOU SHOULD MAKE A COPY OF YOUR HOMEWORK ANSWERS BEF
Smeal College of Business
RM 303 Real Estate Fundamentals Spring 2017
Lu Fang
Chapter 7 Real Estate Valuation Using Sales Comparison & Cost Approach (Part 1)
1. Introduction
1.1. Real Estate Appraisal
Unbiased written estimate of the market value of a pro
Name: _ PSU ID #: _
Homework 2 (For Credit)
Due: At the beginning of class Friday, Feb 24th, 2017
NO LATE WORK WILL BE ACCEPTED!
A hard copy needs to be submitted and you must show work for credits.
NOTE: YOU SHOULD MAKE A COPY OF YOUR HOMEWORK ANSWERS BE
Smeal College of Business
RM 303 Real Estate Fundamentals Spring 2017
Market Determinants of Value (Chapter 5) (Part 1)
1
Where cities occur
1.1 When major consideration was defense
Hills: Rome
The Great Wall: Beijing
1.2 When major consideration was tr
Smeal College of Business
RM 303 Real Estate Fundamentals Spring 2017
Lu Fang
Chapter 7 Real Estate Valuation Using Sales Comparison & Cost Approach (Part 2)
2. Sales Comparison Approach
2.1 Basic Idea
The current market value of a property is best indic
RM 303, Exam 1 (Version A)
Name: _
Feb 8th, 2017
PSU ID #: _
100 Points (4 points each)
Please circle the best answer for each question below.
Formulas:
FVFi / m,nm (1 i / m) nm
PVFi / m,nm
1
nm
(1 i / m)
(1 i / m) nm 1
FVAFi / m,nm
i/m
PVAFi / m ,
Lecture Nine
Brownian Motion and It
os Lemma
Heuristic understanding of stochastic processes
Three topics:
Stock and other asset prices are commonly assumed to follow a geometric Brownian motion.
Characterize the stochastic process of an option from
Lecture Eight
Monte Carlo Valuation
Nuclear weapons and casinos
Monte Carlo valuation provides a solution to options/derivatives that cannot be priced with simple,
closed-form formulas.
Monte Carlo valuation is performed using the risk-neutral distrib
Lecture Twelve
Interest Rate and Bond Derivatives
A.k.a. fixed income derivatives
Derivatives with payoffs depending on bond prices or interest rates.
Why study these derivatives separately?
Introduction to Interest Rate Derivatives
Key: Derivatives w
Lecture Five
Market-Making and Delta-Hedging
At least as important as the Black-Scholes formula is the Black-Scholes technique
What do Market-Makers do?
A market-maker stands ready to sell to buyers and to buy from sellers supply immediacy,
permitting
Lecture Seven
The Lognormal Distribution
Probability theory and more
It is common in option pricing to assume the lognormality of asset pricesbut why?
resemblance
tractability
foundation for extension
The Normal Distribution
Normal distribution: tw
Lecture Eleven
Volatility
Historical and implied volatilities
Volatility is a critical input for option price but cannot be directly observed. In the class we focus
on two topics (both mentioned in previous lectures):
Implied volatility information o
Lecture Ten
The Black-Scholes-Merton Equation
Revisit the market-maker problem with Itos Lemma
Differential Equations and Valuing under Certainty
Black and Scholes derive a PDE which describes the price of an optionthe methodology of using
a different
Lecture Six
Exotic Options
Do not let the name deceive you
Introduction
XYZ Corp., a U.S. based corporation with sizable European operations.
Thus has a large monthly inflow of euros that will be converted to dollars at the end of each
month. Assume
DR. CATHER: RM 302 PROBLEM SET 2 ANSWERS
1
Bubba's utility (U) preferences with respect to wealth (w) can be described by the utility function U=W 0.5.
Assume that Bubba's current wealth level equals $256. Also assume that Bubba faces a 20 percent
chance
Notes on Distributions
This section contains notes on expected values and variances, joint, marginal and
conditional distributions, random variables independence, and covariance and
correlation coefficients. It is derived from a handout written by Profess
Probability C H a r t E a
1.1 BASIC CONCEPTS
1.2 FROPERTIES OF PROBABILITY
1.3 METHODSOF ENUMERATION
1.4 CONDITIONAL PROBABILITY
1.5 INDEPENDENT EVENTS
1.6 BAYES'S THEOREM
1.1 BASIC CONCEPTS " "
It is usually difcult to explain to the general publ
PROBABILITY MODELS FOR ECONOMIC DECISIONS
Chapter 1: Simulation and Conditional Probability
The difficulties of decision-making under uncertainty are familiar to everyone. We all
regularly have to make decisions where we lack important information about f
Exam 2 Practice Problems
For questions 1 and 2, use the following game in normal form:
Left
Player 2
Right
Up
25, 55
45, 16
Down
65, 15
55, 90
Player 1
1. What is t
RM 303
Chapter 1:
Rent: the price of the right to possess and use space for a specified temporary
period of time
Segmented: tend to be local rather than national, and specialized around building
usage categories
Law of one price: at a given point in time,
RM 303
Chapter 1:
Rent: the price of the right to possess and use space for a specified temporary
period of time
Segmented: tend to be local rather than national, and specialized around building
usage categories
Law of one price: at a given point in time,
RM 410 Quiz 1 09/22/20:
I. ( IO points) A saving: arrmmt offers a nmninal discount rate of 6% per year payable montle- Find "9
knee of linen-eat at t = 7115 years.
Win. dew/.751 1M 4", 42.: 00 62-
8: Mu-rb c MU 71*)
2. (10 points) A person aged 30 wishes
R M 410: Financial Mathematics
Homework #2
Due Tue, Sep 13, 2016
1. A certain amount of money was invested for four years. If d1 = 10%, i2 = 20%,
A(2) = $1000, d3 = 20%, and i4 = 10%, how much interest was earned over the four
years. (Answer: $625)
2. If
R M 410: Financial Mathematics
Homework #4
Due Tue, Sep 27, 2016
1. If v = 0.8, calculate the present value (at time 0) of the following series of payments
which continue forever:
1
2
1
2
1
2
4
5
1
2
7
8
+ + + + + + + + +
0
3
6
(Answer: 4.2623)
2. Under