GOODMAN SCHOOL OF BUSINESS
Department of Finance, Operations, and Information
Systems (FOIS)
Course Number: FNCE 3P96
Course Title: Financial Theory
Times and Locations:
Lectures, discussion, 3 hours
1. Finance and Analytical Tools
Objectives: After reading this chapter, you will be able to
1. Get an overview of finance and basic algebra.
2. Use geometric series in financial calculations.
3. Under
2. TIME VALUE OF MONEY
Objectives: After reading this chapter, you should be able to
1. Understand the concept of compounding and discounting.
2. Calculate the present value, or the future value of a
4. CAPITAL BUDGETING UNDER CERTAINTY
Objectives: After reading this chapter, you will
1. Understand the concept of net present value.
2. Use NPV approach in decision-making.
3. Understand the meaning
CHAPTER 12
Introduction to Binomial Trees
Practice Questions
Problem 12.8.
Consider the situation in which stock price movements during the life of a European option
are governed by a two-step binomia
Binomial trees and risk neutral valuation
Moty Katzman
September 19, 2014
Derivatives in a simple world
A derivative is an asset whose value depends on the value of
another asset.
Call/Put European/Am
3. VALUATION OF Bonds AND Stock
Objectives: After reading this chapter, you will
1. Understand the role of bonds in financial markets.
2. Distinguish between different types of bonds, such as zero-cou
3. BASICS OF CAPITAL BUDGETING
Objectives: After reading this chapter, you should be able to
1. Apply the Net Present Value rule to determine acceptable projects for a corporation.
2. Calculate the im
2. VALUATION OF Debt and Equity
Objectives: After reading this chapter, you should be able to:
1. Understand the role of stocks and bonds in the financial markets.
2. Calculate value of a bond and a s
4. CAPITAL ASSET PRICING MODEL
Objectives: After reading this chapter, you should
1. Understand the use of beta as a measure of risk for a stock.
2. Understand and be able to apply the capital asset p
1. Analytical Tools
Objectives: After reading this chapter, you will be able to
1. Solve linear and quadratic equations, system of linear equations
2. Use geometric series in financial calculations
3.
5. CAPITAL BUDGETING UNDER UNCERTAINTY
Objectives: After reading this chapter, you should
1. Understand the basic ideas of discrete and continuous probability distributions.
2. Apply the concepts of p
FNCE 3P96 Midterm 1 of 3
Prof: Walid Ben Obreme
Oct 7, 2017
a) Graphically demonstrate the Fisher separation theorem for the case where an individual ends
up borrowing in the financial markets. Label
FNCE 3P96: Financial Theory
1. Capital Markets, Consumption, and
Investment
Text book: Chapter 1
Dr. Walid Ben Omrane
1
1-B-Consumption and Investment without
Capital Markets
Assumptions
Certainty
No
FNCE 3P96: Financial Theory
3. Investment Decisions Under Certainty
Class notes
Dr. Walid Ben Omrane
1
Present Value
2
Present value of an ordinary annuity
The present value of an ordinary annuity (P
FNCE 3P96: Financial Theory
2. State preference theory and arbitrage
principle
Text book: Chapter 2
Dr. Walid Ben Omrane
1
7-B-Definition of pure security: Arrow-Debreu Security
A pure or primitive (a
Problem Set 69
The information in both frames is exactly the same, yet when presented with the survival frame,
18 percent preferred radiation, and when presented with the mortality frame, 44 percent p
Chapter 23 Mergers and Acquisitions Key
1.
In a typical merger, only the target firm retains its individual identity.
FALSE
Difficulty: Basic
Learning Objective: 23-01 The different types of mergers a
Thursday February 2nd Chapter 3
First order stochastic dominance:
F first order stochastic dominance (FOSD) G.
Probability
Gx(w)
Fx(w)
Xo
W
F(x)G(x) this is how FOSD is shown. It means that CDF of F i
FNCE 3P96
Financial Theory
Spring 2016
Brock University
Faculty of Business
Department of Finance, Operations and Information Systems
Instructor:
Office:
Phone:
Email:
Class Time:
Office Hours:
Onem O
FNCE 3P96: Financial Theory
6. Security market line (SML) and the
capital asset pricing model (CAPM)
Text book: Chapter 6
Dr. Walid Ben Omrane
1
6-A-Introduction
The aim of this chapter is to extend t
Decision making under Uncertainty
Our Main Question
How do individuals behave when they are dealing with uncertainty?
2
Why care about uncertainty?
Simple answer: Because in real life, almost every de
Brock University
Faculty of Business
FNCE 3P96 Financial Theory
Mid-term examination 2, Winter 2012
Friday March 16,2012
7cl
This examination booklet contains 12 pages including one spare page. Show a
Chapter 3
The Theory of Choice: Utility
Theory Given Uncertainty
1. The minimum set of conditions includes
(a)
The five axioms of cardinal utility
complete ordering and comparability
transitivity
stro
Problem 1:
Figure S1.1 Fisher separation for the lender case
W0 y0
y1
1 rf
The individual will take on investment up to the point where the marginal rate of return on investment
equals the market rat