FINA3001 Spring 2017
SAMPLE Exam 3 - KEY
1. FALSE use cash flow, not net income to determine whether or not to accept a project
2. FALSE All incremental cash flows are to be included (this includes erosion as well as synergic
cash flows)
3. FALSE the IRR
This is just a PRACTICE EXAM. The actual exam will differ from this one in the number of
questions, the degree of difficulty, the type of questions, and the order of questions etc.
Marquette University
College of Business Administration
FINA3001 Spring 20
FINA3001
Additional practice problems
Brooks - Chapter 7
Name: _
Section: _
Row: _
1. TRUE / FALSE A typical practice of many companies is to distribute part of the earnings to
shareholders through a coupon payment
2. TRUE / FALSE The payment of cash divi
FINA3001 Exam 3 Ch 9-10-11
Formulas & Calculations
CH 9
Payback: Calculate full and partial years until CF0 is returned.
Discounted Payback:
1. Calculate PV of each years cash flow
2. Calculate payback using the PV form above
NPV: = PV Inflows Cost
NPV(%,
This is just a practice exam. The actual exam will differ from this one in number of questions,
degree of difficulty, type of questions, order of questions etc.
Marquette University
College of Business Administration
FINA3001 Spring 2017
SAMPLE Exam 2
Nam
FINA3001
Additional practice problems
Brooks - Chapter 8
Name: _
Section: _
Row: _
1. TRUE / FALSE The maximum benefits to diversification between securities occurs
when they are perfectly positively correlated.
2. TRUE / FALSE There is some benefit to di
This is just a practice exam. The actual exam will differ from this one in number of questions,
degree of difficulty, type of questions, order of questions etc.
Marquette University
College of Business Administration
FINA3001 Spring 20176
Sample Exam 1
Na
FINA3001
Brooks Ch 17 Dividends
In-Class Exercises
Spring 2017
Name: _
Section: _ Row: _
1. True / False If a stock holder purchases 1000 shares on the payable date, he would
receive the dividend payment. Ex dividend date
2. True / False The stock price o
Single Index
According to Single Index Factor models, why are stock returns related?
Company returns are related because individual company returns are all being driven by a single
underlying risk factor. Because the individual returns are all driven by t
Options
A put is in the money when?
The spot price is below the exercise price
The writer of a put makes money when?
The spot price is above the exercise price
You purchase a call with a strike price of $75, for $5. What is your total payoff & profit if
Cashman Investments
Exam III In-Class Problems
1.
As the average investor becomes less risk averse, what do we expect to happen?
-Risk Premiums will FALL, People are more willing to take on risk
-The SML will FLATTEN, Draw out the SML
-Why
2.
The standard
Zach Budisch
HW#5
Problem Question #2
Transformed Equation:
beer
1
= o
+ 1+ 2
inc
inc
( )
(
u
inc
)
price
educ
female
+ 3
+ 4
+
inc
inc
inc
) ( ) (
)
Problem Question #4 (Part iii)
iii. Ho: season = 0; Ha: season 0
The in-season effect is given by the coe
Pick N Save
By: Chelsea Payant, Zach Cimaglio, Nathan
Digmann, Eric Schleicher
Pickn Save
Owned by Roundys
Metro Market, Copps, Marianos
151 supermarrket locations in Wisconsin and
Illinois
Traded on New York Stock Exchange in Feb 2012 Dec 2015
Own m
Monthly Debt Service years 1-6
PV
$ 200,000.00
I
7.00%
N
25
PMT
($1,413.56)
OLB end of year 6
PMT
($1,413.56)
I
7.00%
N
19
PV
$177,986.90
Lender Yield
PV
PMT
FV
N
I
$ 198,000.00
($1,413.56)
($177,986.90)
72
0.601%
12
7.216%
Borrower Costs of Funds
PV
$ 19
Key Concepts
Property Value = NOI (before cap ex)/cap rate
Debt Coverage Ratio = (Annual NOI cap ex reserve)/Annual Debt Service)
Equity Build Up = (original loan balance OLB end of Yr. 1)/original equity)
Equity = Property Value Loan
Initial Equity Requi
Calculate the Interest on the Loan
Value of the Loan
Interest
Interest on the Loan (per month)
$ 8,500,000.00
6.15%
$
43,562.50
Calculate Interest on similar term with US Treasury
Value of the Loan
US treasury 3 Year Yields
US treasury 5 Year Yields
US tr
Problem Set #3. For the spreadsheet below please replace the numbers in the non-colored cells with equations that
reference the yellow-colored cells. To be clear, any change in the yellow-colored cells should be reflected in equations
embedded in the non-
FINA 3001
Professor Reinholz
Luis Orozco
February 9, 2017
FMA Event Office of the Comptroller of the Currency (OCC)
The FMA event that I attended was conducted by an employee of the Office of the Comptroller
of the Currency, or the OCC. The OCC is an inde
Corporate Governance
1.
What is corporate governance?
2.
a.
Internal governance
Board of directors:
o
Roles of the boards
o
Independent vs. non-independent board
o
How well do they perform?
o
Recent regulations
Managerial Incentives
o
Types of compensatio
TMV
In class Exercises
1. You are comparing two annuities which offer monthly payments for ten years. Both annuities
are identical with the exception of the payment dates. Annuity A pays on the first of each month
while annuity B pays on the last day of e
In class exercise
1. The discount rate that makes the net present value of an investment exactly equal to zero is
called the:
A.
external rate of return.
B.
internal rate of return.
C.
average accounting return.
D.
profitability index.
E.
equalizer.
2. A
Risk
What is the Arithmetic and Geometric Average return? Using Blumes formula what is the expected return over
the next 2 years?
2000
2001
2002
2003
2004
2005
8%
-5%
5%
6%
12%
25%
Arithmetic: (1/6)*0.08)+( (1/6)*-0.05)+( (1/6)*0.05)+( (1/6)*0.06) +( (1/6
Trading and Markets
In order to ensure that you reap the benefits of a significant price increase, while on vacation, what type of price
contingent order should she place?
Limit sell order: This ensures that you only sell your shares at your desired price
Cashman Investments
Exam II In-Class Problems
1.
You invested $150 dollars 5 years ago, and earned a rate of 12% on your investment. If
inflation was 2%, what was your real return?
(1+rn) = (1+rr) * (1+E(i)
1.12 = (1+rr) * 1.02
1.12/1.02 = 1+rr
rr = 1.098
Cashman Investments
Exam I In-Class Problems
1.
2.
Market Orders
a. Define a market order?
i. Executed immediately at the best available price
b. What type of order is only executed at a stated price or better?
i. Limit order
c. What type of order is the
Name: _
Fin 4011 Investments
Diversification Homework
1.
What do you think would happen to the expected return on stocks if investors perceived an increase in the
volatility of stocks?
Assuming no change in risk aversion, investors perceiving higher risk