Practice 1 Solution
ACTSC 372
Fall 2014
1. You bought a stock one year ago at a price of $30 per share and it just paid a dividend
of $2.25 per share. The stocks price today is $35 per share.
(a) What
2
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1
1
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N
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i
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2
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R i RF i ( R M RF )
degreeofoperatingleverage:
Change in EBIT
Sales
DOL
EBIT
Ch
ACTSC 372 Assignment 3 Solutions
1. [10 points] You own 100 shares of Remko Inc., which will pay a dividend of $2.50 per share at
the end of each year for the next two years. Three years from now, Rem
ACTSC 372 Midterm 2(A) Spring 2011 Solutions
1. [11 points] XYZ, a natural gas provider, is considering a project in the solar panel industry requiring
a $12 million initial outlay. The project is exp
ACTSC 372 Spring 2011
Part III Investment Decision Making under Uncertainty and
Utility Maximization
Outline
1
Introduction (EV principle; St. Petersburg Paradox)
2
Axioms of Cardinal Utility and von
TFow
c
(was GA in'Pmk paper)
1. [12 points] Stock A has a mean return of 12% and standard deviation 0.3, While Stock B has a
mean return of 20% and standard deviation 0.35. The returns of Stock A
Assignment 1
ACTSC 372
Fall 2014
Due on Thursday October 2, 2014 by the end of the class.
Note: You will have to use Excel in this assignment. You will not be required to submit
your le online; instea
Assignment 3
ACTSC 372
Fall 2014
Due on Thursday December 4, 2014, in the drop box outside MC 4066.
1. Suppose you are an expected utility maximizer with utility of wealth u(w) = log(w),
w > 0. What i
Final Review
ACTSC 372
Fall 2014
Instructor: Fan Yang
Return Statistics
The history of capital market returns can be summarized by
describing the
average return
( R1 + + RT )
R=
T
the standard devi
Final Review
ACTSC 372
Fall 2014
Instructor: Fan Yang
Return Statistics
The history of capital market returns can be summarized by
describing the
average return
R=
( R1 +
+ RT )
T
the standard devi
Chapter 11
Determining Portfolio Weights
11.1 What are the portfolio weights for a portfolio that has 95 shares of stock A that sell for $53 per
share and 120 shares of stock B that sell for $29 per s
Chapter 10
10.1 Suppose a stock had an initial price of $92 per share, paid a dividend of $1.45 per share during the
year, and had an ending share price of $104. Compute the percentage total return.
1
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Nﬁdterrn 2
ACTSC 372 Fall 2014
Department of Statistics and Actuarial Science, University of Waterloo
Last Name: First Name:
I.D. #:
Instructions:
0 There are 4 questions on this exam.
Midterm Review
ACTSC 372
Fall 2014
Chapter 16
Management is appointed by the shareholders and
hence should attempt to maximize shareholders
interests.
Financial leverage increases the risk of equity
ACTSC 372 Assignment 1 Due on May 27th at 2:30pm
1- Shape of the ecient set [8 points] In the case of N = 2 assets:
(a) Prove that when = 1 the relationship between R and R is linear.
(b) Prove that w
ACTSC 372 Assignment 3 due on July 25, 2011
1. [10 points] You own 100 shares of Remko Inc., which will pay a dividend of $2.50 per share at
the end of each year for the next two years. Three years fr
ACTSC 372
Corporate Finance II
NPV Part 2 (Ch 7):
NPV and Other Investment Rules
Module Outline
NPV Rule Reviewed
Using the NPV rule in capital budgeting
Making sense of the NPV rule in corporate f
ACTSC 372
Corporate Finance II
Capital Budgeting Part 2 (Ch. 9):
Financial Analysis Tools for Capital Budgeting
C a p i t a l B u d g e t i n g wi t h U n c e r t a i n t y
In the real world, we cann
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ACTSC 372
Corporate Finance II
Capital Budgeting Part 1 (Ch. 8):
Identify the Correct Discounted Cash Flows
Incremental Cash Fl ows
When assessing a project, we only consider the net
incremental cash
Some Useful Formulas
1
Present Value
The discounted value of T future cash flows
PV
2
T
Ct
C1
C2
CT
.
2
T
t
1 r (1 r )
(1 r )
t 1 (1 r )
Net Present Value
Present value minus initial costs
NPV = PV C
University of Waterloo
Department of Statistics and Actuarial Science
ActSc 372 Corporate Finance II
WINTER 2017
Instructor:
Ben Feng, M3 3141, [email protected]
Lectures:
Sec. I 10:30-11:20am, MW
ACTSC 372
Corporate Finance 2
Course Workbook
By Peter Wood & Ben Feng
January 2017
1
Table of Contents
Contents
1
Chapter 7: NPV and other investment rules.3
2
Chapter 8: NPV and Capital Budgeting.5
ACTSC 372
Corporate Finance II
CAPM Part 3
R eview
Inclusion of risk-free asset in portfolio optimization
Capital Allocation Line (CAL)
Capital Market Line (CML)
With : CML is the efficient fronti
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