Unit One: Reviewing Prerequisite Concepts
Guiding Questions: Chapter 1
1. What three questions does corporate finance seek to answer?
-what long term investments should you take on? (what business and what P.P.E. do you
need for it
-where will you get lon
Assignment 1
Introduction
Assignment 1 has four parts and is worth 30% of your total grade. Assignment 1 should be
completed after Lesson 2.
This assignment is technical in nature and will help you achieve a basic understanding of the
following concepts t
Assignment 2
Assignment 2 has two parts and is worth 40% of your total grade. Assignment 2 should be
completed after Lesson 5.
Part 1: Preparing Financial Statements (50 marks total)
1. Explain the difference between saving and investing. (5 marks)
-The m
Assignment 3
Assignment 3 has three parts and is worth 25% of your total grade. Assignment 3 should be
completed after Lesson 6.
Part 1: Mutual Funds (20 marks)
1. Go to GlobeFund or Morningstar and select six mutual funds, according to the
following requ
Assignment 2/3
I have always been the kind of person who has considered and looked at the outcomes
and benefits of taking risks. I feel like if presented with the right opportunity I would definitely
be willing to invest if there was a good chance of a go
http:/1.droppdf.com/files/TQG08/investment-analysis-and-portfolio-management-2012.pdf
Chapter 1: The Investment Setting
1.1.1 INVESTMENT DEFINED
Pure Rate of Interest the rate of exchange between future consumption and current
consumption
The willingnes
CHAPTER 5 THE BLACK-SCHOLES-MERTON MODEL
Pg.127-176
BLACK-SCHOLES-MERTON MODEL AS THE LIMIT OF THE BINOMIAL MODEL
The binomial option pricing model converges to a specific value in the limit this value is the
Black-Scholes-Merton price
The binomial mode
FNCE403
Risk Management
Sample Final Examination
Part I: Multiple Choice (15 questions, 2 marks each)
1.
If an investor strongly believes that the stock market is going to have a sharp
decline shortly, he or she could maximize profit by
a.
b.
c.
d.
e.
2.
CHAPTER 3 PRINCIPLES OF OPTION PRICING
(Pages 5789)
The risk-free rate, r, is the rate earned on a riskless investment
(Ex.) U.S. T-bill is a security issued by the U.S. government for purchase by investors
o T-bills with maturities of 91 and 182 days are
CHAPTER 7 ADVANCED OPTION STRATEGIES
(Pages 221230, 234237, and 242246)
OPTION SPREADS: BASIC CONCEPTS
Spread: the purchase of one option and the sale of another
There are two general types of spreads:
1. Vertical, strike, or money spread this strategy
Concept
Checks
Q2
The call with a higher exercise price will be far more speculative, because
the stock price must go higher in order to break even; however, the
premium on such a call will be lower. A call with a lower exercise price will
have a greater
CHAPTER 4 OPTION PRICING MODELS: THE BINOMIAL MODEL (pg.95-119 & 122-124)
A model is a simplified representation of reality that uses certain inputs to produce an output, or
result
An option pricing model is a mathematical formula or computational procedu
FNCE403: Risk Management
Sample Final Exam
Solutions
Part I: Multiple Choice
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
A
B
E
C
A
B
D
C
D
E
B
A
C
D
C
Part II: Short-answer Questions
16.
A stock is priced at $50, and the risk-free rate of interest
Part
I
II
III
Total
Assignment 1: Grading Summary
Marks Available
33
35
32
100
Marks Obtained
Part I: Financial Calculator Exercises (33 marks)
The table on the next page contains practice examples as well as the questions for Assignment 1: Part I. (For a
FNCE 370v8: Assignment 5
Assignment 5 is worth 5% of your final mark. Complete and submit Assignment 5 after you
complete Lesson 15.
There are 12 questions in this assignment. The break-down of marks for each question is
presented in the table below. Plea
FNCE 370v8: Assignment 4
Assignment 4 is worth 5% of your final mark. Complete and submit Assignment 4 after you
complete Lesson 12.
There are 12 questions in this assignment. The break-down of marks for each question is
presented in the table below. Plea
FNCE 370v8: Assignment 2
Assignment 2 is worth 5% of your final mark. Complete and submit Assignment 2 after you
complete Lesson 6.
There are 15 questions in this assignment. The break-down of marks for each question is
presented in the table below. Pleas
FNCE 370v8: Assignment 3
Assignment 3 is worth 5% of your final mark. Complete and submit Assignment 3 after you
complete Lesson 9.
There are 12 questions in this assignment. The break-down of marks for each question is
presented in the table below. Pleas
Finance 234 v2 Assignment #1
For questions where you didn't receive full marks, review the attached solution key in comparison to your answer, and you'll see where marks
were deducted.
If you have questions at that point, please feel free to contact me, t
Part
I
II
III
Total
Assignment 1: Grading Summary
Marks Available
33
35
32
100
Marks Obtained
Part I: Financial Calculator Exercises (33 marks)
The table on the next page contains practice examples as well as the questions for Assignment 1: Part I. (For a
Assignment 1
Assignment 1 is due after you complete Lessons 1 to 4. It is worth 20% of your final grade.
Prepare your responses to these assignment problems in a word processing file; put financial
data in a spreadsheet file. As you complete the assignmen
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