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FINM710016: Money Markets and FinanceFoundations of Finance
Tutorial 5 Solutions
Question One
Two investment projects have been identified and the net cash flows for each appear
below. The required rate of return is 10% p.a. for each. Calculate the NPV fo
FINM7006: Foundations of Finance
Tutorial 2 Solutions
Question One
Calculate the future value of $500 invested today for a period of 4 years at an interest
rate of 10% p.a. compounded annually. Show how and discuss why your answer
would change if interest
FINM 7006: Foundations of Finance
Portfolio Theory: Solutions to Practice Questions
Question One
Your portfolio currently consists of only one stock that has an expected return of 9
percent and a standard deviation of twenty five per cent. A friend has ad
FINM7006: Foundations of Finance
Forwards and Futures Contracts (Set 1):
Solutions to Practice Questions
Question One
You sold one SPI futures contract on July 24, when the price was 2,480. Settlement
(closing) prices over the subsequent days are:
Date
In
FINM 7006: Foundations of Finance
Options: Practice Questions
Question One
MIM stock is currently trading at $1.76 per share. European put and call options
struck at $1.65 and maturing three months from today are trading at $0.05 and $0.17
respectively. T
FINM7006: Foundations of Finance
Forwards and Futures Contracts (Set 1): Practice Questions
Question One
You sold one SPI futures contract on July 24, when the price was 2,480. Settlement
(closing) prices over the subsequent days are:
Date
Index Level
Jul
FINM7006: Foundations of Finance
Forwards and Futures Contracts (Set 2):
Solutions to Practice Questions
Question One
Suppose you observe that the ASX 200 Index (S) is at a level of 2,900 and that the SPI
futures contract expiring in exactly three months
FINM7006: Foundations of Finance
CAPM: Solutions to Practice Questions
Question One
Calculate the required rate of return for a risky asset with a of 1.75 given an
expected return on the market of 14% and a risk free rate of 7%.
The required rate of retur
FINM7006: Foundations of Finance
Risk Management: Practice Questions
Question One
Suppose you need to purchase 1,000 barrels of crude oil in December. December crude
oil futures contracts are currently trading at a price of $110/ barrel (one contract is f
FINM7006: Foundations of Finance
Risk Management: Solutions to Practice Questions
Question One
Suppose you need to purchase 1,000 barrels of crude oil in December. December crude
oil futures contracts are currently trading at a price of $110/ barrel (one
FINM 7006: Foundations of Finance
Options: Solutions to Practice Questions
Question One
MIM stock is currently trading at $1.76 per share. European put and call options
struck at $1.65 and maturing three months from today are trading at $0.05 and $0.17
re
FINM7006: Foundations of Finance
Additional Questions Diversification Topic (Weeks 6-8)
Below are some additional practice questions for the diversification topic (covered in
weeks 6-8), taken from the textbook.
Questions:
1. Textbook Question 9-8 (p. 278
FINM7006: Foundations of Finance
Additional Questions Week 11
As I am overseas this week (week 11), and therefore there will be no workshop, I
have added some extra practice questions below, all of which all involve identifying
an arbitrage strategy and t
FINM7006: Foundations of Finance
Tutorial 5 Solutions
Question One
Two investment projects have been identified and the net cash flows for each appear
below. The required rate of return is 10% p.a. for each. Calculate the NPV for each
project and advise w
FINM7006: Foundations of Finance
Tutorial 4 Questions
Question One
Describe the difference between a coupon-paying bond and a discount security.
Question Two
Calculate the price of a 90-day bank accepted bill quoted as having a yield of 10%
p.a.
Question
FINM7006: Foundations of Finance
Tutorial 4 Solutions
Question One
Describe the difference between a coupon-paying bond and a discount security.
A coupon-paying bond is a medium-to-long term fixed interest security that pays a
regular coupon (interest pay
FINM7006: Foundations of Finance
Tutorial 5 Questions
Question One
Two investment projects have been identified and the net cash flows for each appear
below. The required rate of return is 10% p.a. for each. Calculate the NPV for each
project and advise w
FINM7006: Foundations of Finance
Tutorial 3 Questions
Question One
Describe the characteristics of a corporation that differentiate it from other forms of
business organization such as partnerships and sole proprietorships?
Question Two
What is meant if a
FINM7006: Foundations of Finance
Tutorial 2 Solutions
Question One
Calculate the future value of $500 invested today for a period of 4 years at an interest
rate of 10% p.a. compounded annually. Show how and discuss why your answer
would change if interest
FINM 7006: Foundations of Finance
Tutorial 1 Questions
Question One
What are the primary roles of financial markets?
Question Two
Describe the flow of funds within the financial system.
Question Three
What is the difference between a primary market and a
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FINM7006: Foundations of Finance
CAPM: Practice Questions
Question One
Calculate the required rate of return for a risky asset with a of 1.75 given an
expected return on the market of 14% and a risk free rate of 7%.
Question Two
Calculate the required rat
FINM 7006: Foundations of Finance
Portfolio Theory: Practice Questions
Question One
Your portfolio currently consists of only one stock that has an expected return of 9
percent and a standard deviation of twenty five per cent. A friend has advised you tha
FINM 7006: Foundations of Finance
Risk and Return: Solutions to Practice Questions
Question One
You have recently hired a new analyst named Margaret at the investment bank you
have started. Yesterday, you asked Margaret to provide estimates of the expecte
Retirement Plan
Assume I have the salary of 200,000 dollars
per year, I will put some money into 401K for
about 16500, and put some money into IRA
for about 3500. This will be done from my 41
birthday to my 50 birthday. From 50, I will
put all the money i
Situational Analysis of Coca-Cola
Every second around the world there are about 10,450 people are enjoying drinks produced
by the Coca-Cola Company, this is an amazing data that other companies cannot reach. CocaCola implements the brand strategy, continu
THE AUSTRALIAN NATIONAL UNIVERSITY
SCHOOL OF FINANCE AND APPLIED STATISTICS
Second Semester
Mid-Semester Examination 2004
Study period: 15 minutes
Writing period: 90 minutes
Permitted materials:
Calculator - non-programmable
INSTRUCTIONS:
1. This exam pap
THE AUSTRALIAN NATIONAL UNIVERSITY
RESEARCH SCHOOL OF FINANCE, ACTUARIAL STUDIES AND
APPLIED STATISTICS
Mid Semester Examination
Semester 2, 2013
FINM7006 FOUNDATIONS OF FINANCE
Study Time: 15 minutes
Writing Time: 90 minutes
Permitted materials:
Non-Prog
FINM7006 Applied Foundations of Finance
Tutorial 9 Questions
Question One
The spot price of wheat is 600 cents per bushel, the riskless rate of interest is 6% p.a.,
and the cost of storing wheat is 5% p.a. What is the value of a wheat futures contract
wit
Applied Foundations of Finance (FINM7006)
Tutorial 1 Questions
Question One
What is the primary role of financial markets? p20
A financial market is any place where money and credit are exchanged.
Question Two
2-2 (p. 36)
What are the three principal sets
FINM7006 Applied Foundations of Finance
Tutorial 10 Questions
Question One
Given the payoff diagrams you drew in last weeks tutorial for Question Five, now draw
the overall profit diagrams for both a long and short position in a European call option
given
FINM7006 Applied Foundations of Finance
Tutorial 7 Questions
Question One
What is WACC?
Question Two
14-6 (p. 475)
Divisional WACCs are the most popular method used in practice to risk-adjust the
cost of capital. Describe how you might go about estimating
FINM7006 Applied Foundations of Finance
Tutorial 6 Questions
Question One
What is beta?
Question Two
You invest in two stocks. Stock A has a beta of 1.5 and stock B has a beta of 1.2. If you
invest 50% in each stock, what is the beta of your portfolio?
Qu