Economics 372/572
Intermediate Finance
Spring 2015
Problem Set 3: Comparables
Question 1
Todays date is January 2, 2015. You have carried out both a comparable companies and a DCF analysis to
evaluate a niche clothing company for a potential acquisition.

Econ 372/572
MIDTERM EXAM
Spring 2016
Formulas
1. Bond price formula:
P = C/y [1 (1 + y )-n] + 100/(1+y)n
where P = bond price; C = coupon cash flow; y = yield; n = number of periods
For a semi-annual bond:
C = (quoted coupon)/2
y = (quoted yield)/2
n = 2

Econ 372/572
Problem Set 7
Spring 2015
Overview:
The Ontario Teachers Pension Planning Board (OTPPB) was created in 1990 to manage
the Ontario Teachers Pension Fund. The pension fund is the largest fund in Canada; at
the end of 2004, it had net assets of

Economics 372/572
Intermediate Finance
Spring 2015
Problem Set 6: FUTURES
1. A Wheat farmer expects to harvest 60,000 bushels of wheat in September. In order to pay for
the seed and equipment, the farmer had to draw $150,000 from his savings account on
Ja

CAPM & Performance Measurement
Econ 372/572
Spring 2015
1. What is the beta of a portfolio with E[rp] = 18%, if rf = 6% and E[rm] = 14%?
2. Assume that we are in a CAPM economy.
a. If the T-bill (riskless) rate is 6% and the market return is 15%, draw the

Economics 372/572
Intermediate Finance
Spring 2015
Problem Set 4: Risk, Return and Diversification - SOLUTIONS
Problem 1
You can invest in two different securities with the following characteristics:
Investment
Expected Return (E[ri])
Standard Deviation (

Forwards and Futures
1
Forward Rates: no-arbitrage approach
Compare two possible investments with $1 mil
1. Lend $1,000,000 at 7.5% per annum for two years
2. Lend $1,000,000 at 7.2% for one year, and when it matures, reinvest all
proceeds for a further y

Econ 372/572
Intermediate Finance
Spring 2015
MW 11:45 1:00
Emma Rasiel
Email: ebr4@duke.edu
Class office hours: Wednesdays, 1:30 2:30 in Soc Sci 329H
SYLLABUS
COURSE SYNOPSIS
The goal of this course is to provide a framework for understanding the key the

Economics 372/572
Intermediate Finance
Spring 2015
Problem Set 2: Bond Markets
Question 1
You have just purchased $5 million par amount of the 5yr and 30yr US Treasury bonds shown below, at the
prices shown. (Assume all bonds are semi-annual compounding.)

Econ 372/572
PS 1: Bonds
Spring 2015
1. You have been told that the yield on a particular 10yr bond is 6.5%. This bond pays an 8.5% coupon with
semi-annual compounding (i.e., it is a US Treasury bond). What will its price be?
2. What is the yield to matur