University of Toronto
ECO333Urban Economics
Problem Set 2
Due: 7 October 2016
Submit by 10am on the due date by submitting a PDF on Blackboard.
1. Innovation and Market Areas. Consider the example shown in Figure 2-1.
Depict graphically the effects of the
Instructor: Katya Malinova Assignment: Suggested Questions from
Course: ECO358 Chapter 5
Book: Berk/DeMarzo/Stangeland:
Corporate Finance, Third Canadian
Edition
You have found three investment choices for a one-year deposit: 10% APR compounded
monthly,
Professor Malinova, ECO358H1F: Risk and Risk Aversion
Risk and Risk Aversion:
Expected Utility
Professor Malinova, ECO358H1F
October 20-27, 2015
Professor Malinova, ECO358H1F: Risk and Risk Aversion
Choices Under Uncertainty I
!
We would like to have a fr
Professor Malinova, ECO358H1F: Risk and Risk Aversion
Professor Malinova, ECO358H1F: Risk and Risk Aversion
Choices Under Uncertainty I
Risk and Risk Aversion:
Expected Utility
!
We would like to have a framework to describe individual
optimal choices, an
Professor Malinova, ECO358H1F: Mean-Variance Portfolio Theory
Mean-Variance Framework:
Portfolio Theory with Two Risky Assets
Professor Malinova, ECO358H1F
October 27 and/or November 02, 2015
]
Professor Malinova, ECO358H1F: Mean-Variance Portfolio Theory
15-12-08
Learning Objectives
1. Define the following terms: call option, put option, exercise
price, strike price, exercising the option, expiration date,
American option, European option, in-the-money, and out-ofthe-money.
Financial Options
2. Use put-ca
15-10-20
Objectives
Use the dividend-discount model to compute the
value of a dividend-paying company s stock.
Compute the stock value of a firm that pays
ECO 358: Valuing Stocks
October 20, 2015
Based on Berk, DeMarzo, and Stangeland C
What is This Set of Slides About?
Bond Valuation
We will rst discuss how to price bonds and the related
terminology (loosely, Ch. 6):
Professor Malinova, ECO358
A bond promised a xed stream of income need to compute
the present value.
To compute presen
15-09-28
Learning Objectives
ECO358: Lecture 3
Introduction to Financial
Statement Analysis
Explain what each of the financial statements is, what
you can learn from them, and what you need to bear in
mind when analyzing them.
September 29,
Professor Malinova, ECO358H1F: Mean-Variance Portfolio Theory
Professor Malinova, ECO358H1F: Mean-Variance Portfolio Theory
Whats the Plan?
Mean-Variance Framework:
Portfolio Theory with Multiple Risky Assets
We have discussed the optimal asset allocation
15-09-14
Welcome to ECO358!
Financial Economics I
Lecture 1.1: Introduction
September 15, 2015
Course Resources
Instructors:
Professor Katya Malinova
[email protected]; Max Gluskin House 211.
TA support:
Eciency, CAPM: Empirics, Professor Malinova, ECO358
Eciency, CAPM: Empirics, Professor Malinova, ECO358
Plan
Market Eciency.
Empirical Tests of CAPM.
Related to Berk et al Ch. 13.
Professor Malinova, ECO358
Discuss Market Eciency
Discuss Fama-French 3-fac
Professor Malinova, ECO358H1F: Expected Return and Variance of a Portfolio; Diversication.
Professor Malinova, ECO358H1F: Expected Return and Variance of a Portfolio; Diversication.
Why portfolios?
Expected Return and Variance of a Portfolio.
The Benets o
ECO358H1F
Example Problems
University of Toronto
Department of Economics
ECO358 Sample Problems V
Please note that as in the real world, some questions may include information that is not
required to solve the problem. You have to gure out what it is that
ECO358H1F
Practice Problems, Fall 2015
University of Toronto
Department of Economics
Practice Problems VI: CAPM & Market Eciency
1. To construct the size factor (SMB) for the Fama French model, researchers commonly
form a number (typically, three or ten)
Practice Problems VII (on Chapter 14: Financial Options).
1. Do the following questions from your textbook: 14.1-14.10; 14.15-14.18;
14.20; 14.22 (a and b only).
2. Repeat question 14.3 (a-f) for the table of January
Professor Malinova, ECO358H1F: Mean-Variance Portfolio Theory
Professor Malinova, ECO358H1F: Mean-Variance Portfolio Theory
Whats the Plan?
Mean-Variance Framework:
Portfolio Theory with Multiple Risky Assets
Professor Malinova, ECO358H1F
Based on Bodie e
ECO 358: Valuing Stocks
October 20, 2015
Based on Berk, DeMarzo, and Stangeland Chapter 7.
Objectives
Use the dividend-discount model to compute the
value of a dividend-paying company s stock.
Compute the stock value of a firm that
F a i r
D e a l i n g
( S h o r t
E x c e r p t )
Title: Chapter 2
Author: O'Sullivan, Arthur
Course: Urban Economics
Course Code: LEC0201
Term:
Department: ECO
Thank you for using the University of Toronto Libraries Syllabus Service. We are pleased to be
ECO358H1F
Sample Problems II
University of Toronto
Department of Economics
ECO358 Sample Problems II: Suggested Answers
1-4. See a separate le for answers to the textbook questions.
5. Determine the price of a Canadian government bond as of January 1, 200
Instructor: Katya Malinova Assignment: Suggested Questions from
Course: ECO358 Chapter 4
Book: Berk/DeMarzo/Stangeland:
Corporate Finance, Third Canadian
Edition
You are 25 years old and decide to start saving for your retirement. You plan to save $5,00
Table of Contents
Topic-1: Valuation: World without Uncertainty. 4
Introduction . 4
Financia Economics1
F
al
The First Principal of Valuation . 4
Bonds . 10
Stocks . 27
Topic-2: Risk, Return & the Portfolio Theory . 32
Introduction . 32
Expected Utility
15-09-14
Welcome to ECO358!
Financial Economics I
Lecture 1.1: Introduction
September 15, 2015
Course Resources
Instructors:
Professor Katya Malinova
[email protected]; Max Gluskin House 211.
TA support:
ECO358H1F
Sample Problems IV
University of Toronto
Department of Economics
ECO358 Sample Problems IV
A. Risk Aversion and Capital Allocation
1. Do the following problems from Bodie
(a) 5.1.
Hint: requiring a risk premium of 8% over the 6% return means tha
ECO358H1F
Example Problems
University of Toronto
Department of Economics
ECO358 Sample Problems V
Please note that as in the real world, some question may include information that is not
required to solve the problem. You have to gure out what it is that
ECO358H1F
Example Problems
University of Toronto
Department of Economics
ECO358 Sample Problems VI: (Mostly) CAPM and Portfolio Choice
Please note that as in the real world, some question may include information that is not
required to solve the problem.
ECO358H1F
Sample Problems II
University of Toronto
Department of Economics
ECO358 Sample Problems II
Note: some questions in Part A and all in Part D require material that we will discuss
in Lecture 4. I indicate Chapter numbers in brackets for these ques
ECO358H1F
Sample Problems I
University of Toronto
Department of Economics
ECO358 Sample Problems I
A. Intro and the Basics of Financial Markets
In case you need to classify cash in any of the questions below, please note that cash is a
nancial asset (it i
ECO358H1F
Sample Problems III
University of Toronto
Department of Economics
ECO358 Sample Problems III
Problems in Part A are taken from 2009-2010 UTM ECO358 Midterm; courtesy of Professor
Park. Some were slightly modied to exclude concepts not taught thi
ECO358H1F
Sample Problems 3
University of Toronto
Department of Economics
ECO358 Sample Problems III: Suggested Answers
A. Questions on Bond Terminology and the Basics of Bond Valuation
1. Determine the price of a Canadian government bond as of January 1,
ECO358H1F
Sample Problems I
University of Toronto
Department of Economics
ECO358 Sample Problems I
The following questions are suggested as practice, pick and choose, please dont feel that
you have to do them all.
A. Basics
1. What is (are) the difference