Tutorial 10
Textbook: Principles of Investments (2013 edition) by Bodie, Drew, Basu, Kane and
Marcus, McGrawHill.
Note: Questions with * must be covered in the tutorial class.
Chapter 18
1. a. Possibly. Alpha alone does not determine which portfolio has a
Tutorial 5
Textbook: Principles of Investments (2013 edition) by Bodie, Drew, Basu, Kane and Marcus,
McGrawHill.
Note: Questions with * must be covered in the tutorial class.
Chapter 8:
4.* No. Random walk theory naturally expects there to be some people
Tutorial 8
Textbook: Principles of Investments (2013 edition) by Bodie, Drew, Basu, Kane and
Marcus, McGrawHill.
Note: Questions with * must be covered in the tutorial class.
Chapter 14
9.* Lets assume the stock price in future is either $130 or $80.
Then
Tutorial 9
Textbook: Principles of Investments (2013 edition) by Bodie, Drew, Basu, Kane and
Marcus, McGrawHill.
Note: Questions with * must be covered in the tutorial class.
Chapter 15
5.* a. The required margin is 1419.40 x 250 x 0.10 = $35 485
b. Total
Tutorial 7
Textbook: Principles of Investments (2013 edition) by Bodie, Drew, Basu, Kane and Marcus,
McGrawHill.
Note: Questions with * must be covered in the tutorial class.
Chapter 11
16. * a.
k = rf + (kM rf) = 6% + 1.25(14% 6%) = 16%
g = (2/3) 9% = 6%
Theoretical Foundations
Dr. Kurt Smith
Finance (Derivative Securities)
Overview
Introduction
Definition
Relative value
Replication (Redundancy)
No-arbitrage
Risk neutrality
Theoretical Foundations; Dr. Kurt Smith
Key Ideas
Finance (Derivative Securities)
Laboratory 1
Dr. Kurt Smith
Finance (Derivative Securities)
Overview
Introduction
Theoretical Foundations
Forwards / Futures
FRAs / IR Swaps
Model-Independent Option Valuation
Conclusion
Laboratory 1; Dr. Kurt Smith
Finance (Derivative Securities)
Introdu
Laboratory 2
Dr. Kurt Smith
Finance (Derivative Securities)
Overview
Theoretical Foundations
Model-Independent Valuation
GBM & BSM
Binomial
Greeks
Model Risk
Laboratory 2; Dr. Kurt Smith
Finance (Derivative Securities)
IMPORTANT!
The content of this lectu
Chapter 05 - Net Present Value and other Investment Criteria
CHAPTER 5
Net Present Value and Other Investment Criteria
Answers to Problem Sets
1.
a.
A = 3 years, B = 2 years, C = 3 years
b.
B
c.
A, B, and C
d.
B and C (NPVB = $3,378; NPVC = $2,405)
e.
Tru
Chapter 06 - Making Investment Decisions with the Net Present Value Rule
CHAPTER 6
Making Investment Decisions with
The Net Present Value Rule
Answers to Problem Sets
1.
a, b, d, g, h.
2.
Real cash flow = 100,000/1.04 = $96,154; real discount rate = 1.08/
Tutorial 3
Textbook: Principles of Investments (2013 edition) by Bodie, Drew, Basu, Kane and Marcus,
McGrawHill.
Note: Questions with * must be covered in the tutorial class.
Chapter 6
Q: 8 to 14- all contains *
8. The parameters of the opportunity set ar
Tutorial 4
Textbook: Principles of Investments (2013 edition) by Bodie, Drew, Basu, Kane and Marcus,
McGrawHill.
Note: Questions with * must be covered in the tutorial class.
Chapter 7 Please note Q 6 and Q7 are additional practice questions
6. The cash f
Tutorial 6
Textbook: Principles of Investments (2013 edition) by Bodie, Drew, Basu, Kane and Marcus,
McGrawHill.
Note: Questions with * must be covered in the tutorial class.
Chapter 10
3. * The percentage bond price change is:
duration
y
0.0075
7.194
Chapter 5
Business finance
1. Business finance identifies four stages of financial management.
(a) List each of the four financial management stages.
1. The investment decision or capital budgeting.
2. The financing decision or capital structure.
3. The l
Chapter 2
Interest rates, monetary policy and the economy
_1. (a) Define the term yield and explain the construction of a yield curve.
Yield the total return on an investment; comprising interest receipts and any capital gain
or loss.
Yield curve a grap
TUTE CHP 3 FIN226-Financial Markets Essentials
2. Within the context of a commercial bank funding its balance sheet, explain the funding
strategy known as liability management. Provide an example of how a bank uses liability
management when determining th
Im Curtin University
FNCE3000 Corporate Finance
2016
1.0
Overview
Table 1.1 Assessment Schedule
Task
Participants
Case study
Group
(Pairs)
Literature Review
Final Exam
Value (%)
20
Date due
Week 6
Individual
35
Week 10
open book
45
Exam
week
The aim of th
Problem 7.1 Australian futures
Ian Smith, the currency speculator we met earlier in the chapter, sells eight June 2007 futures contracts for 800,000 Australian dollars
at the closing price quoted in Table 7.1. Assume that the June settlement price is 0.77
Problem 6.3 Argentine Peso and PPP
The Argentine peso was fixed through a currency board at Ps1.00/US$ throughout the 1990s. In
January 2002 the Argentine peso was floated. On January 29, 2003 it was trading at Ps3.20/US$.
During that one year period Arge
Problem 8.1 Andina, S.A.
Andina SA, a Chilean company, wishes to borrow US$8,000,000 for eight weeks. A
rate of 4.00% per annum is quoted by potential lenders in New York, Great Britain,
and Switzerland using, respectively, international, British, and the
Tutorial 1
Textbook: Principles of Investments (2013 edition) by Bodie, Drew, Basu, Kane and
Marcus, McGrawHill.
Note: Questions with * must be covered in the tutorial class.
Chapter 1:
1:
Equity is a lower priority claim and represents an ownership share
Tutorial 2
Textbook: Principles of Investments (2013 edition) by Bodie, Drew, Basu, Kane and Marcus,
McGrawHill.
Note: Questions with * must be covered in the tutorial class.
Chapter 5
Q: 2
The geometric return represents a compounding growth number and w
1. A highly developed and efficient financial system is essential to ongoing economic growth and
prosperity. Discuss the component parts that form a financial system and the relevance of the
above statement.
Component parts of a financial system:
Financia