Homework #1 Solutions
FIN 301, Fall 2015
Problem 1
(Details are given on page 3 of the Cardmember agreement.)
ADB: Average Daily Balance; DPR: Daily Periodic Rate (round to 0.0001%)
= 11.99%
= 365 = 0.0328%
= $1,000
a. = 30 = $1,000 0.9840% = $9.84
b.
FIN 301
Fall 2015
Solutions to Homework 4
Problem 1
Payback period:
Year
A
B
D
0
-$75,000
-$75,000
Never
1
75,000-52,000=23,000
75,000-500=74,500
2
23,000-22,000=1,000
74,500-9,000=65,500
3
1,000-15,000=-14,000
65,500-15,000=50,500
4
50,500-45,000=5,500
5
Homework #3 Solutions
FIN 301, Fall 2015
Professor Egor Matveyev
Problem 1.
The answer is this:
FV
PV
DIV(t)
Price(t)
DIV(t)
Sum DIV(t)
Price(t)
Price(0)
100 $62,639.15 $1,378,061.23
$0.05
$98.83
$1.17
$100.00
Hence, the fraction of todays firm value that
Homework #6
FIN 301
Fall 2015
Professor Egor Matveyev
SOLUTIONS
Problem 1
IKEA gave the option to customers to return merchandise for an exchange or refund IKEA
wrote a Put option to customers (alternatively customers are long the put option)
Within 45 da
Homework #3
FIN 301, Fall 2015
Professor Egor Matveyev
Due by 4:00 pm on October 9
New due date: 12:00 noon on October 14
Problem 1
Use Excel to reproduce the table on slide 22 of Equity Valuation lecture. What is the value in column 5 on line 100?
100
I.
Homework #1
FIN 301, Fall 2015
Professor Egor Matveyev
Due by 4pm on September 18
Problem 1
This question is based on American Express Banks card member agreement. This agreement is a contract
between a credit card holder and American Express Bank. In wha
Homework #5
FIN 301, Fall 2015
Professor Egor Matveyev
Due by 4:00pm on Friday, November 20
Problem 1
Consider the following information about three stocks:
State of Economy
Boom
Average
Recession
Rate of Return if State Occurs
Stock A
Stock B
Stock C
Pro
FIN 301
Fall 2015
Solutions to Homework 5
Problem 1
a. Expected Return of Portfolio
E(RA)= 0.3050%+0.4515%+0.25(8%)=19.75%
E(RB)= 0.3012%+0.45(5%)+0.252%=1.85%
E(RC)= 0.3020%+0.456%+0.25(3.2%)=7.9%
E(Rp)= 0.3019.75%+0.501.85%+0.207.9%=8.43%
b. Standard d
Homework #2
FIN 301, Fall 2015
Professor Egor Matveyev
Due by 4:00pm on September 28
Note: If not otherwise stated, assume that:
Yield-to-maturity (YTM) is an APR, semi-annually compounded
Bonds have a face value of $1,000
Coupon bonds make semi-annual co
Homework #4
FIN 301, Fall 2015
Professor Egor Matveyev
Due by 12:00pm (NOON) on October 27
Problem 1
You have the following projects available.
Project Cash Flows
Project B
Project C
-$75,000
-$15,000
$500
$40,000
$9,000
$15,000
$15,000
-$45,000
$45,000
$
FIN 412
Bodie et al. Chapter 4
RISK AND RETURN
A quick review of
Time Value of Money (TVM)
r: discount rate per period
n: number of periods
FV: value of a cash flow n periods into the
future, known today
PV: present value of the future cash flow
PV FV
Bodie et al. Ch. 6 and its appendices
DIVERSIFICATION AND RISKY
PORTFOLIOS
1
Dont put all your eggs in one basket
Examples from the Corporate World
Apples plans for a low-end iPhone
Lack of diversification for U.S. global giants
2
From last topic
Utili
Bodie et al. Ch. 8
FACTOR MODELS
(INDEX MODELS) AND APT
Dimensionality:
Data requirements of mean-variance analysis
Suppose you want to construct an efficient portfolio
from the universe of S&P/TSX Composite members
(n=220).
You must estimate:
220 expect
Bodie et al. Ch. 5
RISK AVERSION, UTILITY,
AND ASSET ALLOCATION
1
A simple primer on utility theory
Starts from the notion that people prefer more to
less (buy low sell high)
As one gets more of a good, utility always
increases, but it increases at a de
Bodie et al. Ch. 11
TOPIC 9: EMPIRICAL EVIDENCE
Testing the CAPM: motivation
Expected
return-beta relationship
where M is an observable ex-ante efficient market index, and
The most commonly tested implication of the CAPM:
It applies on every asset j, i
Bodie et al. Ch. 12
TOPIC 10: BOND BASICS
Quote of the day
The fixed income world dwarfs the equity
world. The equity world is like a [] zit
compared to the bond market.
Steve Eisman, quoted in The Big Short: Inside
the Doomsday Machine, by Michael Lewis
Bodie et al. Ch 9
TOPIC 7: MARKET EFFICIENCY
1
Defining the concept of efficiency
In this context we mean informational efficiency.
An efficient capital market is one in which the prices fully
and instantaneously reflect all available relevant
informati
Bodie et. al Ch. 7
CAPITAL ASSET PRICING MODEL
1
What do we know so far?
Step 1: Investors will formulate the optimal risky
portfolio.
Step 2: Investors will use this optimal risky portfolio
in combination with the risk-free asset to find their
own pers
INVESTMENT PRINCIPLES
1
Course Information
Instructor:
Efstathios (Stathi) Avdis
PhD Wharton; MS Columbia
Research interests:
market efficiency
financial econometrics
dynamic incentive theory
Office:
3-30B
Office Hours: M 12:00-1:30pm
TAs: to be announced
16
UA
The core purpose of participating to bible study fellowship for me is to reduce the
disappointment from the failure in exam of a spring course and which I did not approach to my
ideal scores. I started to join in bible study fellowship in U of A
Narrative Project Guidelines
The narrative project is designed to encourage students to see assigned readings as part of
a meshwork that includes their own stories.
Each student will tell a story that reflects upon a text that we have covered in class.
St
Reading Thomas
Pynchons Entropy
The Role of Order and Disorder in the Narrative
Examples of Chaos
The story begins by describing a scene of chaos
Downstairs, Meatball Mulligans lease-breaking party
was moving into its 40th hour (1).
Many details about
Pynchons Entropy
tr. de Julin Rodrguez
Entropy
[1958, 1959, 1984]
ENTROPA*
de
Thomas Pynchon
DESINTEGRACIN IRREVERSIBLE,
CONSUNCIN
by
5
tr. de Julin Rodrguez
Thomas Pynchon
en Las Estaciones de la Imaginacin
Murcia, 1998, Spain
10
Boris has just given me
ENGL 122 B2 Texts and Contexts
Instructor: Dr. W. DeFehr
HC 2-25
TR 3:00pm 5:50pm
July 4, 2016 August 10, 2016
Email: [email protected], [email protected]
COURSE DESCRIPTION
This course introduces students to post-secondary studies in English by
focusin
Education Recourse in Second Life
Web: http:/kwu55.blogspot.ca/
Second Life was popular when it first came out. Many people regarded it as
another virtual world, even many big companies and institutes seek fortune in second
world, hope to have new opportu
Homework #1: Time Value of Money
FIN 301, Winter 2017
Due by 4pm on January 27
Problem 1
Suppose you want to buy a house for $620,000 and you have $80,000 in savings you can use as a down payment.
The rest you finance with a 5-year mortgage (monthly payme
Inuit
child & youth health
Inunnguiniq:
Caring for children the Inuit way
At the heart and soul of Inuit culture are
our values, language, and spirit. These
made up our identity and enabled us to
survive and flourish in the harsh Arctic
environment. In th
Homework #2: Bond Valuation
FIN 301, Winter 2017
Due by 4pm on February 3
Note: If not otherwise stated, assume that:
Yield-to-maturity (YTM) is an APR, semi-annually compounded
Bonds have a face value of $1,000
Coupon bonds make semi-annual coupon pay
Homework #5: Risk and Return, Options
FIN 301, Winter 2016
Due by 4pm on March 30
Problem 1
Consider the following information about three stocks:
State of Economy
Boom
Average
Recession
Probability of
State of Economy
0.3
0.4
0.3
Rate of Return if State