Risk and return
1
.
AAA
BBB
BBB
AAA
BBB
Yield curve
.
Diff: E
Your uncle would like to limit his interest rate risk and his default
risk, but he would still like to invest in corporate bonds. Which of the
possible bonds listed below best satisfies your un
Nave Model
Time period (day)
Volume of garbage collected
(in cubic meters)
t
Xt
July 3 let x = 1
July 4 let x = 2
July 5 let x = 3
July 6 let x = 4
July 7 let x = 5
July 8 let x = 6
July 9 let x = 7
July 10 let x = 8
July 11 let x = 9
July 12 let x = 10
J
Time period (day)
July 3 let x = 1
July 4 let x = 2
July 5 let x = 3
July 6 let x = 4
July 7 let x = 5
July 8 let x = 6
July 9 let x = 7
July 10 let x = 8
July 11 let x = 9
July 12 let x = 10
July 13 let x = 11
July 14 let x = 12
July 15 let x = 13
July 1
Volume of garbage collected
(in cubic meters)
Time period (day)
July 3 let x = 1
July 4 let x = 2
July 5 let x = 3
July 6 let x = 4
July 7 let x = 5
July 8 let x = 6
July 9 let x = 7
July 10 let x = 8
July 11 let x = 9
July 12 let x = 10
July 13 let x = 1
BMATH 3
SPECIFIC REQUIREMENTS FOR GROUP OUTPUT 1:
CONSTANT LEVEL PROFILE:
1. Find the forecast value using each of the following models: Use _.
a. Nave
b. 3 period SMA
c. 3 period WMA (assign your own weights)
d. SES
i. First determine the best-fitting al
Period
(day)
t
July 3 let x = 1
July 4 let x = 2
July 5 let x = 3
July 6 let x = 4
July 7 let x = 5
July 8 let x = 6
July 9 let x = 7
July 10 let x = 8
July 11 let x = 9
July 12 let x = 10
July 13 let x = 11
July 14 let x = 12
July 15 let x = 13
July 16 l
Group Activity in
BMATH3
MWF 12:30-1:30 P.M.
Group 4
Leader: Rodlen P. Bojos
Members:
Patricia Bernadas
Joman M. Cordero
Bianca Angela de Paula
1. Two sets of Time Series Data
A. Constant Level Data: Volume of Garbage Collected Daily
B. Linear Trend Data:
Volu
me of
garba
ge
collec
Date ted
(in
cubic
meter
s)
1
774
Volume
of
garbage
collecte
d
Time
period
(day)
Volume of garbage collected
900
800
700
(in
cubic
meters)
f(x) = - 0.7262125903x + 648.2623529412
600
500
400
July 3
774.29
let x = 1
300
200
2
719
The most accurate forecast model for the constant level data given the Nave model, Simple
Moving Average, Weighted Moving Average and Simple Exponential Smoothing using the Mean
Squared Error as measurement for accuracy is the Simple Exponential Smoothing
Group Activity
in BMATH3
MWF 12:30-1:30 P.M.
Group 4
Leader: Rodlen P. Bojos
Members:
Patricia Bernadas
Joman M. Cordero
Bianca Angela de Paula
Best-fitting Alpha
=0.1
Period (day)
t
July 3 let x = 1
July 4 let x = 2
July 5 let x = 3
July 6 let x = 4
July
.
Required return
Answer: e
Diff: E
.
Required return
Answer: d
Diff: E
.
Required return
Answer: a
Diff: E
The total return is made up of a dividend yield and capital gains yield.
For Stock A, the total required return is 10 percent and its capital
gains
Multiple Choice: Conceptual
Easy:
Interest rates
1
.
longer; smaller.
shorter; larger.
longer; greater.
shorter; smaller.
Statements c and d are correct.
Interest rates and bond prices
.
Diff: E
One of the basic relationships in interest rate theory is th
.
Interest rates
Answer: e
Diff: E
.
Interest rates and bond prices
Answer: c
Diff: E
Statement a is false; just the reverse is true. Statement b is false;
the 15-year bond is selling at a discount because its coupon payment is
less than the YTM.
Statemen
.
Risk concepts
Answer: e
Diff: E
.
Risk measures
Answer: a
Diff: E
Statement a is correct, since the coefficient of variation is equal to
the standard deviation divided by the mean.
The remaining statements
are false.
.
Market risk premium
CAPM equation:
.
Financial markets
Answer: d
Diff: E
.
Financial markets
Answer: c
Diff: E
Statement a is false; this describes the over-the-counter market.
Statement b is false; this is a secondary market transaction. Statement
c is true; therefore, the other statement
Risk and return
.
Answer: d
Diff: E
Yield curve
Answer: a
Diff: E
If the expectations theory holds, the Treasury yield curve must
downward sloping.
Since everyone is expecting inflation to
declining, then the average inflation rate for the next 5 years wi
MAN 303B Quiz 3
Fall 2005
November 29, 2005
Name:
Student No:
Honor Pledge: I have neither given nor received an unauthorized aid on this
assignment.
Signature:.
PART 1: Multiple Choice Questions. (9 pts each)
(1)
The real risk-free rate of interest, k*,