CHAPTER
1
What Is an Alternative Investment?
enitions of what constitutes an alternative investment vary substantially. One
reason for these differences lies in the purposes for which the denitions are being
used. But denitions also vary because alternati

Questions for Chap 5, 6, 7 and 8
Chapter 5
1. A year ago, you invested $1,000 in a savings account that pays an annual interest
rate of 7%. What is your approximate annual real rate of return if the rate of inflation
was
3%
over
the
year?
A. 4%.
B. 10%.
C

Applied Econometrics
Applied Econometrics
Second edition
Dimitrios Asteriou and
Stephen G. Hall
Chapter 6:
Heteroskedasticity
Applied Econometrics
Heteroskedasticity
1. What is heteroskedasticity
2. Consequences of heteroskedasticity
3. Detecting heterosk

Applied Econometrics
Applied Econometrics
Second edition
Dimitrios Asteriou and
Stephen G. Hall
Chapter 16:
Non-Stationarity and Unit Root
Tests
Applied Econometrics
Non-stationarity and Unit Root Tests
1. Introduction
2. Unit roots and spurious regressio

ch14
Student: _
1.
The current yield on a bond is equal to _.
A. annual interest divided by the current market price
B. the yield to maturity
C. annual interest divided by the par value
D. the internal rate of return
E. none of the above
2.
If a 7% coupon

ch17
Student: _
1.
A top down analysis of a firm starts with _.
A. the relative value of the firm
B. the absolute value of the firm
C. the domestic economy
D. the global economy
E. the industry outlook
2.
An example of a highly cyclical industry is _.
A.

ch15
Student: _
1.
The term structure of interest rates is:
A. The relationship between the rates of interest on all securities.
B. The relationship between the interest rate on a security and its time to maturity.
C. The relationship between the yield on

Applied Econometrics
Applied Econometrics
Second edition
Dimitrios Asteriou and
Stephen G. Hall
Chapter 15:
VAR Models and Causality Tests
Applied Econometrics
VAR Models and Causality
1. Vector autoregressive (VAR) models
2. Causality tests
Applied Econo

Applied Econometrics
Applied Econometrics
Second edition
Dimitrios Asteriou and
Stephen G. Hall
Applied Econometrics
INTRODUCTION
1. What is Econometrics?
2. The Stages of Econometric Work
2
Applied Econometrics
What is Econometrics?
Econometrics means me

Introduction
Assumptions
Black-Scholes Formula
Working with Black Scholes
Implied Volatility
Application
The Black-Scholes Model (BSM)
University of Johannesburg
April 7, 2016
The Black-Scholes Model (BSM)
Introduction
Assumptions
Black-Scholes Formula
Wo

Applied Econometrics
Applied Econometrics
Second edition
Dimitrios Asteriou and
Stephen G. Hall
Chapter 8:
Misspecification
Applied Econometrics
Misspecification
1. Omitting influential or including non-influential
explanatory variables
2. Various functio

Applied Econometrics
Applied Econometrics
Second edition
Dimitrios Asteriou and
Stephen G. Hall
Chapter 7:
Autocorrelation
Applied Econometrics
Autocorrelation
1. What is autocorrelation
2. What causes autocorrelation
3. First and higher orders
4. Consequ

Applied Econometrics
Applied Econometrics
Second edition
Dimitrios Asteriou and
Stephen G. Hall
Chapter 9:
Dummy Variables
Applied Econometrics
Dummy Variables
1. Nature of qualitative information
2. Use of dummy variables
3. Special cases of dummy variab

Applied Econometrics
Applied Econometrics
Second edition
Dimitrios Asteriou and
Stephen G. Hall
Chapter 3:
Simple Regression
Applied Econometrics
Simple Regression
1. Introduction to the Classical Linear Regression
Model
2. The OLS Method of Estimation
3.

ch13
Student: _
1.
The expected return/beta relationship is used _.
A. by regulatory commissions in determining the costs of capital for regulated firms
B. in court rulings to determine discount rates to evaluate claims of lost future incomes
C. to advise

ch16
Student: _
1.
The duration of a bond is a function of the bond's
A. coupon rate.
B. yield to maturity.
C. time to maturity.
D. all of the above.
E. none of the above.
2.
Ceteris paribus, the duration of a bond is positively correlated with the bond's

c ti
1
(Introdu
Lecture e Investments
ti v
Alterna
on)
Alternative Investments - Introduction
What are common asset classes found in the
financial market?
What are alternative asset classes / alternative
assets / alternative asset strategies examples?
Rea

B
ement 3
ag
ent Man
ice
Investm
d Pract
an
T h eo ry
o
P o rt f o l i
Student Responsibility and Accountability
A no-nonsense approach will be followed by all lectures in the Department
of Finance and Investment Management regarding:
absenteeism from le

B
ement 3
ag
ent Man
Investm
i ce
d P ract
an
T h eo ry
o
Portfoli
Student Responsibility and Accountability
A no-nonsense approach will be followed by all lectures in the Department
of Finance and Investment Management regarding:
absenteeism from lectur

B
ement 3
ag
ent Man
ice
Investm
d Pract
an
T h eo ry
o
P o rt f o l i
Student Responsibility and Accountability
A no-nonsense approach will be followed by all lectures in the Department
of Finance and Investment Management regarding:
absenteeism from le

CASE STUDY 2: SOLUTION
Periodic Income Calculation
Year 1
Potential Gross Income
Year 2
Year 3
Year 4
Year 5
R 9,300,000.00
R 10,416,000.00
R 11,665,920.00
R 13,065,830.40
R 14,633,730.05
R -465,000.00
R -520,800.00
R -583,296.00
R -653,291.52
R -731,686.

B
ement 3
ag
ent Man
ice
Investm
d Pract
an
T h eo ry
o
P o rt f o l i
Student Responsibility and Accountability
A no-nonsense approach will be followed by all lectures in the Department
of Finance and Investment Management regarding:
absenteeism from le

CASE STUDY 1: SOLUTION
Periodic Income Calculation
Year 1
Potential Gross Income
Vacancy Rates
Misc. Income
Effective Gross Income
Operating Costs
Net Operating Income
Debt Service
Before Tax Cash Flows
Taxes From Operations
After Tax Cash Flows
Year 2
Ye

ch5
Student: _
1.
Over the past year you earned a nominal rate of interest of 10 percent on your money. The inflation rate
was 5 percent over the same period. The exact actual growth rate of your purchasing power was
A. 15.5%.
B. 10.0%.
C. 5.0%.
D. 4.8%.