Finance Final Study Guide
Lecture 10: Risk and Return
- Empirically, risk securities earn a higher return/trade at lower prices
- CAPM quantifies risk-return relationship, only compensated for holding
FIN 300 Homework Assignment #4
Due by 11.59pm on December 7
This homework assignment is to be submitted electronically via Canvas. If you feel that a question
misses essential information, make a reas
FIN 300 & FIN302 Homework Assignment #3
Due by 11.59pm on November 14
This homework assignment is to be submitted electronically via Canvas. If you feel that a
question misses essential information, m
FIN 300 Homework Assignment #2
Due by 11.59pm on October 12
This homework assignment is to be submitted electronically via Canvas. If you feel that a
question misses essential information, make a reas
FIN 300 Homework Assignment #1
Due by 11.59pm on September 21th
This homework assignment is to be submitted electronically via Canvas. If you feel that a
question misses essential information, make a
Fin 480
Winter 2018
Prof. JP Carmel
Solutions to
Review Problems for Midterm
Exam Format:
Emphasizes problem solving, similar to problem sets and review questions.
Closed Book. Closed Note. A two-side
Fin 480
Winter 2018
Prof. JP Carmel
Solutions to
IN-CLASS Review Problems for Midterm
1.
Forward price should be (40)
(1.08)3
= 43.52746356
(1.05)3
Forward is underpriced: Go long in forward market. S
Fin 480
Winter 2018
Prof. JP Carmel
Review Problems for Midterm
Unless stated otherwise, assume all of the following:
There are no transactions costs.
The underlying asset can be short-sold without
Fin 480
Winter 2018
Prof. JP Carmel
In-Class Review Problems for Midterm
Unless stated otherwise, assume all of the following:
There are no transactions costs.
The underlying asset can be short-sold
THE UNIVERSITY OF MICHIGAN
THE ROSS SCHOOL OF BUSINESS
FINANCE 480-001/321
INTRODUCTION TO FUTURES & OPTIONS MARKETS
WINTER 2018
Purpose of Course
Finance 480 provides students with an introduction to
Fin 480
Winter 2018
Prof. JP Carmel
Problem Set 4
DUE SATURDAY FEB 10 11pm
SUBMIT TO CANVAS WEBSITE!
Throughout this problem set, assume that there are no transactions costs involved in trading the
un
Fin 480
Winter 2018
Prof. JP Carmel
Problem Set 5
DUE MON FEB 12 (11PM)
SUBMIT TO CANVAS WEBSITE!
It is important to read pp.4-5 of Teaching Note 1, the section entitled Method 3: Annual
Percentage Ra
Fin 480
Winter 2018
Prof. JP Carmel
Problem Set 2:
DUE SUNDAY JAN 21 11pm
SUBMIT TO CANVAS WEBSITE!
1. Suppose you went long 5000 bushels of 1-year wheat when the futures price was $3.00 a
bushel. Sup
Fin 480
Winter 2018
Prof. JP Carmel
Problem Set 6
DUE SUNDAY FEB 18 11pm
SUBMIT TO CANVAS WEBSITE!
The first problem is related to material in Class Note 3.
1. Consider the following:
The going price
Welcome to Fin 480!
The course outline is available on Canvas under Files.
Please read through it at your first convenience.
We have a lot to do this term. Please be in your seat and ready to go at th
Fin 480
Winter 2018
Prof. JP Carmel
Problem Set 1:
DUE SUNDAY JAN 14 11pm
SUBMIT TO CANVAS WEBSITE!
Please read Teaching Note 1: Review of Interest Rate Mathematics before answering
Questions 1 to 3.
Abebi, who hasjust celebrated her 29th birthday, will retire on her 55th birhtday, and she hasjust set up a retirement plan to pay her incomme starting on her retirement day,
and to continue paying fo
Rafael owned an apartment building that burned down. The empty lot is worth $70,000 and Rafael has received $350,000 from the insurance company. Rafael plans to build another apartment
building that w
Alpha Inc. has the following two projects that it is considering, and it wants to choose one. Project A has an investment outlay/expense today of $930, and its cash flows over
the next three years are
10
NPV
PV
Collegetuiton has been raising ar a rate of 6% a yea r. Currently the average tuition of a state college is 95000 per yea r. Andreas son trevor will begin college in
9 years. Andreas portfol
Rafael owned an apartment building that burned down. The empty lot is worth $90,000 and Rafael has received $180,000 from the insurance company.
Rafael plans to build another apartment building that w
Last year yourfirm had revenue of $21.0 million, cost of goods sold (COGS) of $13.0 million, Selling, General, 81 Administration costs (SGKLA) of $2.5 million,
Account Receivables (AR) of $6.5 million
This $6 million is the after-tax terminal value that is in year 4 (that is, 2016) dollars and is the PV of all cash flows year 5 and beyond. The capital expenditure of this project is $13 million.
Wha
2. (10 points) You are interested in a new Ford Taurus. After visiting your Ford dealer, doing your research on the best leases available, you have three options.
(i) Purchase the carfor cash and rece
FINANCE
FIN 300
INDRAJIT MITRA
ROSS SCHOOL OF BUSINESS
UNIVERSITY OF MICHIGAN
LECTURE NOTE 16 CAPITAL STRUCTURE
Logistics
2
Recommended Concept Questions in Chapter 16: 2, 3, 4, 5, 7, 9, 10
Recommende
FINANCE
FIN 300
INDRAJIT MITRA
ROSS SCHOOL OF BUSINESS
UNIVERSITY OF MICHIGAN
LECTURE NOTE 12 Capital Asset Pricing Model II
Logistics
2
Recommended exercises (Chapter 11):
Concept Questions: 1, 2, 3
FINANCE
FIN 300
INDRAJIT MITRA
ROSS SCHOOL OF BUSINESS
UNIVERSITY OF MICHIGAN
LECTURE NOTE 2 TIME VALUE OF MONEY
Logistics
2
You will have one mid-term and one final exam
Exams are multiple choice (20
FINANCE
FIN 300
INDRAJIT MITRA
ROSS SCHOOL OF BUSINESS
UNIVERSITY OF MICHIGAN
LECTURE NOTES 18 Payouts/Signaling
Logistics
2
Recommended Concept Questions in Chapter 19: 1, 2, 3, 6, 9, 16, 19, 20
Reco
FINANCE
FIN 300
INDRAJIT MITRA
ROSS SCHOOL OF BUSINESS
UNIVERSITY OF MICHIGAN
LECTURE NOTE 8 BONDS II
Logistics
2
Recommended exercises in Chapter 8: 1, 2, 3*, 5, 16, 17*, 21*, 22*, 23
I have posted P
FINANCE
FIN 300
INDRAJIT MITRA
ROSS SCHOOL OF BUSINESS
UNIVERSITY OF MICHIGAN
Q&A #1
Logistics
2
Exam (in-class March 7)
21 questions, 80 minutes
During class time be on time!
Calculator, cheat she