C hapter 4
STRUCTURE OF THE ATOM
bl
is
he
d
From these activities, can we conclude
that on rubbing two objects together, they
become electrically charged? Where does this
charge come from? This question can be
answered by knowing that an atom is divisible

McKinsey Working Papers on Risk, Number 20
Getting to grips with
counterparty risk
Nils Beier, Holger Harreis,
Thomas Poppensieker,
Dirk Sojka, and Mario Thaten
June 2010
Copyright 2010 McKinsey & Company
This report is solely for the use of client perso

Graphs In-Lab Exercise:
Some of the questions below refer to the dataset:
x: 75, 48, 65, 54, 34, 58, 39, 57, 66, 45, 59, 52, 44, 57
1.For a bar chart you can use either frequency or relative frequency, why does it not matter which one you use.
2.Create a

Discrete Random Variables
Section ID:- 7D3
Student ID:1)
Ans: P(H=3) = 0.10cfw_From the table
2)
Ans: P(H<=5) = P(H<=2) + P(H=3) + P(H=4) + P(H=5) = 0 + 0.10 + 0.25 + 0.45 =
0.80
3)
Ans: We want to construct the cumulative distribution for H. Let F be the

Graphs In-Lab
Section:- 7D3
Student ID:1.
Ans: Suppose the height of a bar in frequency chart is x then the height of that bar
in relative frequency chart is x/n where n is the total number. Hence, the height of
each bar reduced by same fraction in relati

Part C
1.
Here is the scatterplot for income ($1000) versus the credit balance ($) with the
best fit line.
credit balance vs. Income
80
70
f(x) = 0.01x - 3.52
R = 0.64
60
50
Income ($1000)
40
30
20
10
0
1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,50

Variable Type Exercises:
For each variable below give the variable type (discrete numeric, continuous numeric or categorical ranked or
categorical unranked).
1.The town where your high school was located.
2. The number of brothers that you have.
3. Your p

Securities Held on
Balance Sheet
Encumbrance
Test
U.S.
Treasury
Level 1
Treasury Control
Test
HQLA-Eligible
Investment Portfolio
Ginnie
Mae
LRM
Test
Issuer
Classification
GSE
Capital Structure
Test
Investment
Grade Test
Level 2A
Risk Weight
x = 0%
Soverei

I think demonetisation is a game changing and a courageous move by the government and its their
crusade against black money and corruption, which is also a huge threat to our national security as there
is a strong suspicion of a deliberate strategy to put

C hapter 8
MOTION
In everyday life, we see some objects at rest
and others in motion. Birds fly, fish swim,
blood flows through veins and arteries and
cars move. Atoms, molecules, planets, stars
and galaxies are all in motion. We often
perceive an object

Chapter 6 - Market Based Valuation
Calculating the forward P/E ratio based on 4 different specifications of forward EPS
Example for Slides 6-8
ASSUMPTIONS
Months from fiscal year end
Stock price
2011:Q1 EPS
2011:Q2 EPS
2011:Q3 EPS
2011:Q4 EPS
2011 Fiscal

Chapter 5 - Residual Income Valuation
Calculation of Residual Income Using a Given EBIT
Example for Slides 4-6
ASSUMPTIONS
Total assets
EBIT
Debt-to-total capital ratio
Cost of debt (before tax)
Cost of equity
Tax rate
$5,000,000
$400,000
0.60
8.0%
12.0%

Chapter 4 - Free Cash Flow Valuation
Using the WACC and single stage FCFF Model to Value the Firm and Common Stock
Example for Slides 6-8
ASSUMPTIONS
Current FCFF
Target debt to capital
Market value of debt
Shares outstanding
Required return on equity
Cos

Chapter 3 - Discounted Dividend Valuation
Using a Multi-Stage Dividend Discount Model to Value Common Stock
Example for Slides 5-6
ASSUMPTIONS
0
D
P
r
1
2
3
$1.00
$1.05
$1.10
$20.00
$0.87
$0.83
$15.03
10.00%
OUTPUT - Valuing Common Stock using a DDM
PV of

Global Role Profile Template (GCB4 8)
Group Entity:
Global Banking and Markets
Role Profile Date:
Role Title
Quantitative Analyst, Fixed Income
GHRS Job Code:
New or Existing Role?
X New
Existing
Role Holders Name ( for more than one, note multiple)
Curr

Variable Type
Section:- 7D3
Student ID:1.
Ans: The variable is the length of time for walk to home and it is continuous numeric
variable.
2.
Ans: The variable is the weight of backpack when coming to class and it is
continuous numeric variable.
3.
Ans: Th

Probability and Probability Laws
Section ID:- 7D3
Student ID:1)
Ans: P(H) = P(a car is Honda) =
Total number of Honda cars 7 1
= = =0.125
Totalcars
56 8
2)
Ans: P(not R). This is opposite of finding probability of R. Hence,
Total
P ( not R )=1P ( R ) =1 c

IC-102 (S4)
Probability - Basics
Some useful Jargons
Experiment: Any process of observation
To see whether a switch is in on or off state
To observe whether a solder joint has failed or
not
To estimate how many house-managers prefer
Surf excel and how

IC 102(S4)
continuous probability distributions
probability density functions
Properties of continuous random
variables
A random variable X is simply a function from a sample
space S that can have values as real numbers. The
random variable is discrete,

IC-102(S4)
Random variables
and distribution
Part 1-discrete random variable
Recall memory
Statistical experiment is a process in which several chance
measurements or observations are made
All outcomes constitute the sample space
Each sample point / ou

IC 102(S4)
continuous probability distributions
probability density functions - part2
Some skewed pdf
Gamma and exponential distributions
Applicable in queuing theory and reliability
Time between arrivals in service stations,
time to failure of componen

Tests of Hypotheses Based on a
Single Sample
IC-102 (S6)
Criminal justice system
A criminal trial is going on. The judge must decide
whether the accused is
innocent or guilty.
In fact, the accused may be guilty and the judge may
give a verdict that he