Assignment 4
Instructions
Assignment 4 should be submitted after you have completed Unit 7. This assignment is worth
15 percent of your final grade.
Assignment 4 contains six problems. The maximum mark for each problem is noted at the
beginning of the pro
ECON385v3
Quiz 3
May 21, 2013
Quiz 3 - Due: After Unit 7
Credit Weight: 5% of your final course grade
Instructions: Jot down your answers to all the questions below. Your instructor will ask for your
responses to four (4) of these questions. Be prepared t
CHAPTER 21
PORTFOLIO MANAGEMENT TECHNIQUES
1. First of all, your action indicates that you are taking a passive approach to investing.
Your portfolio is only indexed (passive) with respect to Canadian equities, however.
Investing in iUnits is restricting
1
Student: _
1.
The net wealth of the aggregate economy is equal to the sum of _.
A. all financial assets
B. all real assets
C. all financial and real assets
D. all physical assets
E. none of these
2.
The material wealth of a society is a function of _.
A
Assignment 3
Instructions
Assignment 3 should be submitted after you have completed Unit 5. This assignment is worth
15 percent of your final grade.
Assignment 3 contains eight problems. The maximum mark for each problem is noted at the
beginning of the p
ECON385v3
Assignment 1
May 21, 2013
Assignment 1- Due After Unit 4
Credit Weight: 15% of your final course grade. The marks allocated to each question are indicated in parentheses.
Instructions:
Upload your assignment. Keep a copy of your completed assign
Assignment 2
Instructions
Assignment 2 should be submitted after you have completed Unit 3. This assignment is worth
15 percent of your final grade.
Assignment 2 contains four problems. The maximum mark for each problem is noted at the
beginning of the pr
ECON385v3
May 21, 2013
Assignment 2 Due: After Unit 8
Credit Weight: 15% of your final course grade. The marks allocated to each question are indicated in parentheses.
Instructions: Upload your assignment. Keep a copy of your completed assignment for your
Assignment 1
Instructions
Assignment 1 should be submitted after you have completed Unit 2. This assignment is worth
15 percent of your final grade.
Assignment 1 contains five problems. The maximum mark for each problem is noted at the
beginning of the pr
CHAPTER 19
FUTURES, FORWARDS AND SWAP MARKETS
1.
There is little hedging or speculative demand for cement futures, since cement prices
are fairly stable and predictable. The trading activity necessary to support the futures
market would not materialize.
3
CHAPTER20
ACTIVEMANAGEMENTANDPERFORMANCEMEASUREMENT
1.
a. Arithmeticaverage: ABC=10%XYZ=10%
b. Dispersion:ABC=7.07%,XYZ=13.91%.XYZhasgreaterdispersion.
(Weused5degreesoffreedomtocalculatestandarddeviations.)
c. Geometricaverage:
rABC=(1.21.121.141.031.01)
CHAPTER 18
OPTION VALUATION
1.
Put values also must increase as the volatility of the underlying stock increases.
We see this from the parity relation as follows:
P = C + PV(X) S0 + PV(Dividends).
Given a value of S and a risk-free interest rate, if C inc
CHAPTER 22
MANAGED FUNDS
1.
The unit investment trust should have lower operating expenses. Because its
portfolio is fixed once the trust is established, it does not have to pay portfolio
managers to constantly monitor and rebalance the portfolio as perce
Note1.1:Corporate,BusinessUnit,andMarketingStrategies
Formulating a strategy consists of finding a distinctive competency on which an organization
will organize the means to achieve its goals and provide superior value to customers. This
process involves
ECON385v3
Quiz 1
May 21, 2013
Quiz 1 - Due: After Unit 3
Credit Weight: 5% of your final course grade
Instructions: Jot down your answers to all the questions below. Your instructor will ask for your
responses to four (4) of these questions. Be prepared t
ECON385v3
Quiz 2
May 21, 2013
Quiz 2 - Due: After Unit 5
Credit Weight: 5% of your final course grade
Instructions: Jot down your answers to all the questions below. Your instructor will ask for your
responses to four (4) of these questions. Be prepared t
CHAPTER1
THEINVESTMENTENVIRONMENT
1.
a. Cashisafinancialassetbecauseitistheliabilityofthegovernment.
b. No.Thecashdoesnotdirectlyaddtotheproductivecapacityoftheeconomy.
c. Yes.Youcanbuymoregoodsandservicesthanpreviously.
d. Iftheeconomyisalreadyoperatinga
CHAPTER 17
OPTIONS AND OTHER DERIVATIVES: INTRODUCTION
1.
3.
We assume in all cases that the option position is established by buying at the ask
prices.
a.
Option price = $9.55; payoff = 80-74=6; profit = 6-9.55 = -3.55
b.
Option price = $2.99; payoff = 0
CHAPTER 11: EMPIRICAL
EVIDENCE ON SECURITY RETURNS
1.
Even if the single-factor CCAPM (with a consumption-tracking portfolio used as the
index) performs better than the CAPM, it is still quite possible that the consumption
portfolio does not capture the s
Problem 6 (20 marks)
The risk-free rate is 1% and the standard deviation for the Benchmark portfolio is 3.50%, Joes portfolio is 5.00% and Kim
1. Compare Joes and Kims performance relative to the benchmark in terms of portfolio returns.
2. If they are bea
CHAPTER 3
TRADING ON SECURITIES MARKETS
1.
Individual solution - answers to this problem will vary.
a. The stock is purchased for 300 $40 = $12,000. Borrowed funds are $4,000.
Therefore, the investor must put up equity or margin of $8,000.
3.
b. If the sh
CHAPTER 4
RETURN AND RISK: ANALYZING THE HISTORICAL RECORD
1.
Your holding period return for the next year on the money market fund depends on what
30-day interest rates will be each month when it is time to roll over maturing securities.
The one-year sav
CHAPTER 2
FINANCIAL MARKETS AND INSTRUMENTS
1.
Money market securities are called cash equivalents because of their great
liquidity. The prices of money market securities are very stable, and they can be
converted to cash (i.e., sold) on very short notice
CHAPTER 5
RISK AVERSION AND CAPITAL ALLOCATION TO RISKY
ASSETS
1.
a. The expected cash flow is: (0.5 x $70,000) + (0.5 x 200,000) = $135,000
With a risk premium of 8% over the risk-free rate of 6%, the required rate of return is
14%. Therefore, the presen
CHAPTER 1
THE INVESTMENT ENVIRONMENT
1.
a. Cash is a financial asset because it is the liability of the government.
b. No. The cash does not directly add to the productive capacity of the economy.
c. Yes. You can buy more goods and services than previousl
CHAPTER 6
OPTIMAL RISKY PORTFOLIOS
1. (a) for sure.
(b) and (d) are firm-specific.
(c) and (e) can be either firm-specific or due to market-wide factors.
3. (a) is true by definition.
(b) is also true: see for instance the example in Figure 6.15.
(c) is f
Problem 5 (15 marks)
The following data are available relating to the performance of CSFEquity Fund and the market portfolio:
The risk-free return during the sample period was 5%.
1. Calculate the performance measures of each ofhe funds (A, B, and C)using