What type of audit report would be issued
in each of these cases?
Situation no. 1
Subsequent to the date of the financial statements as part
of post-balance sheet date audit procedures, a CPA
learned that a recent fire caused heavy
Chapter 1: Four Economic Questions About Global Warming
What are the four questions?
B. How much pollution is too much?
- What standard?
C. Is government up to the job?
D. How can we do better?
E. Can we resolve global issues?
Chapter 2: E
EMH is efficient market hypothesis which basically states that there is no way to beat the
market which means there is no way to underpay for stock or to make a profit on a stock more
than the index, because they are always traded at fair
Assignment on Bonds due on November 3, 2016
Do all three questions. BUT only Q1 needs to be submitted. This will
count patially towards your assignment score (in lieu of Quiz 2).
I will call randomly on a couple of students to explain Q2 and Q3.
Q1. A cou
= 1.2 Recent Stock Price = $24.81
Dvnd/Share = $1.00 in 2015 ROE = 16% Dvnd Payout Ratio =
Dvnd Forecast in 17- 19 = $1.40
Assume rf = 3% and Market Risk Premium = 8%
It is also given that dividends will grow after 2018 at a constant growth when
Test # 3 is on Ch.10, Ch.13 and Ch.15. You should know the concepts of these chapters as well as the
techniques to solve computational problems.
Not limited to the following items, but it will help knowing the following.
Types of Bonds like Callable
HOW TO CALCULATE ACCRUED INTEREST AND INVOICE AMOUNT
Generally coupon bonds make semiannual payments of interest, called coupon
payments, for the term of the bond. Let us assume these coupon payments are
made on March 15 and September 15. You are a
Solution to Q.4 , Ch. 13, Page 437 This is one of the CFA problems.
Same steps as in GE problem from Value Line
a) Calculate the required rate of return for Smile White
December 2013 data
= 1.15 , Market Price = $30 , Intrinsic Value = ?
rf = 4.5%
Following concepts were discussed in class from Chapter 1. If you have any questions, please
let me know either in the class or during office hours or by calling me.
1, Real/Financial Assets
2, Types of Financial Assets
3. Portfolio, Portfolio b
Treasury bill Listing SLIDE # 14
I discussed in the class the meaning of various columns. BID and ASKED columns
mean yields if you sell or buy respectively. Let me show step by step how one
uses this information. If you are selling, use BID column. If buy
Gross Income: Inclusion
Paid holidays are taxable.
The value of the stock, $1,000, is taxable.
The issuance of the old computers does appear to be intended as compensation.
there is a question of what val
An Introduction to Taxation
Example :Margin, Maintenance Margin, and Margin Call
You are bullish on Coca Cola (KO) stock. The current market price is $50/share. You want to buy 200
shares but you have only $5000 in cash. You borrow $5000 from broker at an interest rate of 8%.
Ch. 5 Mutual Funds and Other investment Companies
1. What are the costs and benefits to small investors of investing via mutual
2. Per Investment Company Act of 1940, there are two types of investment
companies in the US. What are those two types?
Q 26. Data in the question:
Tax bracket (t) = 28%
Taxable bond return (r)= 6%
Tax free return ( rm) = 4%
Part a) To decide which one is preferrable , compute the net return on taxable . It means compute the
after tax return.
r x (1 t) = .06 x ( 1 0
Review Topics for TEST 1
The Test is expected to be predominantly but not limited to the following topics.
You are responsible for Ch. 1 thru 4. There are8 questions including 23 points
worth of computational problems and 27 points of descriptive material
Ch. 3 Concepts
Primary versus Secondary Markets
Private versus Publicly held companies
What is an IPO? Who handles it on behalf of the company?
What is the responsibility of Investment Banker? Underwriter
What is shelf registration?
How and where securiti
Chapter 2 Concepts
Asset Allocation/Security Selection
Money Market/Capital Market
Difference between T-Bill, T-Notes, and T-Bond
Ask/Bid yield (meaning of ask and bid)
How to calculate price of T-bill given ask/bid yield
These are statistical models designed to estimate the two components of risk for a security or a portfolio.
The index models simplify the analysis effort drastically. The risk associated with a security has two
components, namely Mark