BS1707 Corporate Finance
Tutorial 3
February 10
Problem 1
The equity of a levered firm has a returns standard deviation of 0.5 (this is equivalent to
the example firm in Lecture Package 4 with a 50% debt ratio). An investor wants to
invest in the firms eq

BS1707 Corporate Finance
Tutorial 2
February 3
Problem 1
According to economists, there are 3 possible future states of economy, each presented
in the table below with the expected return of stock A in each state.
State
Boom
Stable
Recession
Probability
3

BS1709 Risk Management and Corporate Governance
Tutorial 2
March 14
Problem 1
The Argenta mining company foresees to extract 70,000 kg of silver next year from its
current mine. Next year, Argenta wants to start exploring for new silver mines only if
the

BS1709 Risk Management
Ghassan Yacoub
Tutorial 1
PROBLEM 1
S_o
r_f
30.0
0.03
a). What is the one-year forward price?
Using the formula for the forward price:
F0 = 30 (1 + 0.03)^1
So F0 =
30.9
b). What if the one-year forward price is 33? Is there a way to

BS1709 Risk Management and Corporate Governance
Tutorial 1
February 29
Problem 1
Assume that the current share price of SABMiller is 30 and the one-year interest rate is
3%.
a) What is the one-year forward price of SABMiller?
b) What if the one-year forwa