42GitmanPrinciplesofFinance,EleventhEdition
Chapter 7
Stock Valuation
.1
True/False
1.
Holders of equity have claims on both income and assets that are secondary to the claims of creditors.
Answer: TR
Chapter10RiskandRefinementsInCapitalBudgeting157
Chapter 10
Risk and Refinements In Capital Budgeting
.1
True/False
1.
The breakeven cash inflow is the minimum level of cash inflow necessary for a pro
252GitmanPrinciplesofFinance,EleventhEdition
Chapter 6
True/False
1.
Real rate of interest is the actual rate of interest charged by the suppliers of funds and paid by the demanders.
Answer: FALSE
Le
14GitmanPrinciplesofFinance,EleventhEdition
Chapter 13
Dividend Policy
.1
True/False
1.
Holders of record are stockholders whose names are recorded on the date of record.
Answer: TRUE
Level of Difficu
Credit
Management
Credit managementis the process of grantng credit, the terms it's
granted on and recovering this credit when it's due.
Why credit management is
important?
One of the most, if not t
Bond Options, Caps and Floors
Blacks Model (1/2)
Consider a European call option on a variable whose
value is V. Define
T : Time to maturity of the option
F : Forward price of V for a contract with ma
Interest Rate Markets
Types of Rates
Treasury rates
interest rates applicable to borrowing by a government
in its own currency
LIBOR (London Interbank Offer Rate) rates
rate that most creditworthy
01. A Brief Introduction to Linear Programming
Linear programming is not a programming language like C+, Java, or Visual Basic. Linear
programming can be defined as:
"A method to allocate scarce resou
Skills Development Case 1 Cost Behavior
Go to www.youtube.com and search for How Its Made, a television show produced by the Discovery Channel
that shows how thousands of products and services are cre
Collection
Policies &
Procedures
Finance 4
Presented by:
Mr.
Huey M. Quiambao
What is
Delinquent?
failinginorneglectfulof
adutyorobligation;guilt
yofamisdeedor
offense.
DEFINITION of 'Delinquent
Accou
198. You have been offered the opportunity to invest in a project which will pay $1,000 per year at the end of
years one through 10 and $2,000 per year at the end of years 21 through 30. If the approp
Philippine School of Business Administration
826 R. Papa St. Sampaloc, Manila
Members:
Cuevas, Anthony
Dalisay, John Vincent
Igot, Kristelle
Laguerta, Marvin
Tiempo, John Gabriel
Vergara, Jana
Villa,
SECURITIZATION
Securitization pooling loans for various purposes into
standardized securities backed by those loans, which
can be traded like any other security.
Is the process of restructuring and re
Option Sensitivites
Option prices can change due to directional
price shifts in the underlying asset, changes in
the implied volatility, time decay, and even
changes in interest rates. Each of these c
Money Market
1. Suppose that the current Tbill rates are as follows:
91-days - 4.25%
182-days - 4.75%
364-days - 5.50%
Assume 364-day base year
a.If you will buy a 6-mo. Tbill right now, what would be
FINANCIAL ENGINEERING
Financial engineering - bundling or unbundling of existing
assets or securities to create new ones with tailored or
different characteristics
Examples of financial engineering pr
MANAGED, POOLED FUNDS
A mutual fund is a form of collective investment that pools money from many
investors and invests the money in stocks, bonds, short-term money market
instruments, and/or other se
Linear Regression and Correlation
We study the relationship between two variables, develop an equation linking the two and
help us estimate one variable from the other.
We often hear of questions like
Review of Econometrics 1
Lecture Notes
June 14, 2009
1
Linear Regression as a Descriptive Tool
Given a set of n joint observations on k + 1 variables y, x1 , . . . , xk in tabular form:
y1
.
.
x11
.
.
Basic Probability Concepts
Random trial
An activity that has at least two outcomes and it is not known in advance which outcome
will occur
Basic outcome
The different possible outcomes of a random tri
HUMAN RESOURCE MANAGEMENT
Art and Science
HRM is both the art of managing people by recourse to creative and innovative approaches;
it is science as well because of the precision and rigorous applicat
Black-Scholes Pricing
The Black Scholes Pricing formula for call
options are given as
c S 0 N d1 Xe N d 2
rt
where,
d1
ln
S0
X
r t
2
t
2
ln S0 X r
d2
t
2
2
t d
1
t
Black-Scholes Pricing
Now