Capital Asset Pricing
Model
FIN 261
Lecture Notes Ch. 6, 7
1
Risk-Return Plane
Risk and return are the only characteristics of the
portfolios that matter
Risk-return combinations on a plane
Two asset example:
Stock Portfolio:
E[R] = 10%
SD = 25%
Bond Port
Index Model and APT
FIN 261
Lecture Notes Ch. 7
1
Single Index (Factor) Model
Index Model: a model of security returns
using an index such as the S&P 500 to
represent common or systematic risk
(factor)
Each stock js return fluctuates with the single
fac
Finance 261 Tutorial
Week 2
1. Assuming an investor is in the 15% tax bracket, what taxable equivalent must be
earned on a security to equal a tax exempt municipal bond yield of 5.5%?
2. (2013SC Test) A 90-day $1000 par Treasury bill was just issued at $9
Finance 261 Tutorial
Week 6
1. You are given the following return probability distribution for Stock X and Y:
Probability
Stock X
Stock Y
Bear market
0.2
-20%
-15%
Normal market
0.5
18%
20%
a. What are the expected rates of return for stocks X and Y?
R
E(
THE UNIVERSITY OF AUCKLAND
Department of Accounting and Finance
FINANCE 261 Introduction to Investments
Assignment 2
Semester 2 2016
Due Date: Friday, October 21st, 4pm
0
1.
Suppose that a two-factor model, where the factors are the market return (Factor
Finance 261 Tutorial
Week 6
1. You are given the following return probability distribution for Stock X and Y:
Probability
Stock X
Stock Y
Bear market
0.2
-20%
-15%
Normal market
0.5
18%
20%
Bull market
0.3
50%
10%
a. What are the expected rates of return
Finance 261 Tutorial
Week 2
Consider the following return distributions for Stock A.
Economic State
Deep Recession
Mild Recession
Mild Expansion
Boom
Probability
0.2
0.3
0.3
0.2
Return on Stock A
-20%
0%
20%
30%
1. What is the expected return on Stock A?
Finance 261 Tutorial
Week 5
1.
Assume you purchased a share in Company Z for $5.40 on 1 January 2007 intending
to hold it for 180 days. A dividend of 50 cents per share was paid 10 days later. At the
end of your holding period you sold the share for $6.40
Finance 261 Tutorial
Week 4
1. Assume an initial margin requirement of 50% and a maintenance
margin of 30%. An investor buys 100 shares of stock on margin at
$60 per share. The price of the stock subsequently drops to $50.
a. What is the actual margin at
Returns and Risks
FIN 261
Lecture Notes Ch. 5
1
Two Components of Return
Yield
Periodic cash flow
Interest
Dividend
Capital gain / loss
Appreciation / depreciation in the price
Holding Period Return = Yield + Price Change
Yield Price change CFt (PE PB )
Final Examination
April 26, 2010
9AM to 12 Noon
PART I (multiple choice)
Each of the following questions is worth 3 % There is only one correct answer in each case.
1. Let R[x] be the vector space of all polynomials over R. Which of the following is NOT a
McGill University
Faculty of Science
April 17, 2013
Final examination
Advanced Calculus for Engineers
Math 264
April 17, 2013
Time: 9AM-12PM
Examiner: Prof. R. Choksi
Associate Examiner: Prof. N. Sancho
Student name (last, first)
Student number (McGill ID
Math 264 Fall 2014 - Written Assignment 4
Due date: Wednesday Nov. 19 by 5:25pm. All students must hand in this assignment at the
room of Tutorial Section 4.
Instructions: Aii students in the course should hand in this assignment as in-
structed above, re
ResponseWare (Turning Technologies)
ResponseWare turns a students web-enabled device (e.g. smartphone, tablet, laptop,
etc.) into a virtual clicker. Students are able to respond to interactive questions in class
through the ResponseWare app or via any web
MATHEMATICS 133 ASSIGNMENT
Due in tutorials during the week November 10 - November 14
Instructions: Show all work and justify answers (even where not explicitly requested).
Marks may be deducted for lack of neatness (print if necessary). The assignment ma
Case Study 5: Muskrat Falls and HVDC
Panel Discussion
1. Briefly describe what development of the Muskrat Falls project entails
2. Which provinces and parties are involved in the Muskrat Falls project? Which ones
are the proponents and which are
Fall 2014
MECH 261/262
Statistics Problem Set 1
Monday 26 March 2012
PART I: Probability
1. Coin toss. Imagine that you have a box that contains 1000 coins. At the beginning,
they are all showing heads.
(a) You give the box a little shake, what happens?
(
Last Name (PRINT) :
Student Number :
Other name(s) :
FACULTY OF ENGINEERING FINAL EXAMINATION, FALL TERM 2012
MATHEMATICS 264 Advanced Calculus for Engineers
VERSION 1
Examiner: Professor I. Klemes
Associate Examiner: Professor W. Jonsson
Date: Monday, 10
Fall 2014
MECH 261/262
Problem Set 3
11 November 2014
1. Venturi tube. A venturi tube is to be used to measure fluid velocity. The ratio of inlet pipe
diameter to throat diameter is D/d = 2.
(a) By the conservation of mass, find a relationship between the
Last Name (PRINT) :
Student Number :
Other name(s) :
FACULTY OF SCIENCE FINAL EXAMINATION, WINTER TERM 2012
MATHEMATICS 314 Advanced Calculus
VERSION 1
Examiner: Professor I. Klemes
Associate Examiner: Professor N. Sancho
Date: 25 April, 2012.
Time: 2:00
MATH 314, Final Examination 12 December 2013 Version 1
Part 1: There are 7 (seven) multiple choice questions, each worth 5 points. Answer
on the computer card. Only the answer on the computer card will be considered.
For each question there is only one co
GEOG 302- Environmental Mgmt and Analysis
The Environment
1. What is the environment?
2. How do we know what it is?
3. How can we change it?
4. What are we trying to achieve?
The human relationship with the envr has changed dramatically over the last coup
MATH 264
Solution to Question 11
Solve the heat equation
ut = uxx
0 x , t 0
ux (0, t) = 0, u(, t) = 10
u(x, 0) = x2
t>0
0 x .
Your answer will be an infinite series. What is happens to the temperature as t gets larger and
larger. Explain your answer based
1. Knowing that the temperature across a 6 x 4 plate is found according to the following:
T( x, y )
xy 2 x 3 y 2 48
Such that:
T
x
48
52
56
60
36
44
52
60
0
12
24
36
y
0
2
4
6
0
2
4
6
0
2
4
6
0
0
0
0
2
2
2
2
4
4
4
4
Find the average temperature across the
Security Markets
FIN 261
Lecture Notes Ch. 3
Financial Markets
Primary market
New securities are issued
Issuer receives proceeds from sale
Public offerings
Registered with SEC
Sale made to investing public
Private offerings
Not registered
Sold only to
Math and Stats Review
FIN 261
1
Random Variable
Variable whose value is subject to
variations due to chance
Examples:
Return from a risky investment
Payoff from a game in which you
choose one case out of two
containing either nothing or 1 million
dollars
Investment Alternatives
FIN 261
Lecture Notes Ch. 1, 2
1
Investments
Nature of Investment
Reduce current consumption for greater future consumption
Investors perspective
Maximizing expected welfare
Return is good
Risk is bad
Ex ante risk-return trade-o