5a
arithmetic mean annual rate of return
Stock T =
Stock B=
0.054
0.016
5.40%
1.60%
Stock T would be more desirable based on the arithmetic mea annual rate of return because
It has a higher percentage at 5.4% versus 1.6%
5b
Standard deviation comparison
S
Corporate Investment Analysis: Text BookInvestment Analysis and Portfolio Management
FIN 550

Summer 2016
FIN 550: Corp. Investment Analysis
Week 3 Homework
Chapter 8: Problems 6(ac), 8(ac), and 10(ac)
Chapter 8: Problems
6.
The following are the historic returns for the Chelle Computer Company:
Year
Chelle Computer General Index
1
37
15
2
9
13
3
11
14
4
Problem 4
Income Statement Data
Revenues
Operating Income
Depreciation and Amortization
Interest Expense
Pretax Income
Income Taxes
Net Inome After Tax
2010
542
38
3
3
32
13
19
2014
979
76
9
0
67
37
30
A
Operating Margin
Asset Turnover
Interest Burden
Fin
Danielle Ems
1/10/16
FIN550
Week 1 Homework Assignment
5. a) Arithmetic mean annual rate of return
Stock T = (0.19+0.080.120.03+0.15)/5 = 0.054 = 5.4%
Stock B = (0.08+0.030.09+0.02+0.04)/5 = 0.016 = 1.6%
Stock T would be more desirable based on the ari
Problem 6
Year
Chelle Computer
1
2
3
4
5
6
37
9
11
8
11
4
A.
Correlation Coefficient
B.
Standard Deviation
Chelle Computer
General Index
C.
General Index
15
13
14
9
12
9
0.130546
14.21
8.27
Beta
Chelle Computer
0.2244
Problem 8
Forecasted Return
Fund T
Problem 5
Year
1
2
3
4
5
A
Stock T
0.19
0.08
0.12
0.03
0.15
Mean:
Stock B
0.08
0.03
0.09
0.02
0.04
Stock T
Stock B
0.054
0.016
=
=
5.40%
1.60%
Stock T is most desireable due to it having the highest return of the 2 stocks
B
Count:
Stock T
Stock B
Year
Corporate Investment Analysis: Text BookInvestment Analysis and Portfolio Management
FIN 550

Summer 2016
FIN 550: Corporate Investment Analysis
Week 9 Homework
Chapter 21
Chapter 21: Problems 3(ae), 4(ac), 6(ac), 9(ab), 10(ac), and 11(ac)
Problem 3 June Klein, CFA, manages a $100 million (market value) U.S. government bond portfolio for an institu
smal
Corporate Investment Analysis: Text BookInvestment Analysis and Portfolio Management
FIN 550

Summer 2016
FIN 550: Corporate Investment Analysis
Week 8 Homework
Chapter 20
Chapter 20: Problems 3(ac), 5(ac), 8(ac), 9(ad), and 10(ad)
Problem 3
Suppose that an investor holds a share of Sophia common stock, currently valued at $50. She
value of her holding m
Corporate Investment Analysis: Text BookInvestment Analysis and Portfolio Management
FIN 550

Summer 2016
FIN 550: Corporate Investment Analysis
Homework Week 6
Chapter 12
Chapter 12: Problems 4(ad), 7(ab), 8(ab)
Problem 4
Currently, the dividendpayout ratio (D/E) for the aggregate market is 60 percent, the required
and the expected growth rate for divide
Corporate Investment Analysis: Text BookInvestment Analysis and Portfolio Management
FIN 550

Summer 2016
FIN 550: Corporate Investment Analysis
Week 8 Homework
Chapter 20
Chapter 20: Problems 3(ac), 5(ac), 8(ac), 9(ad), and 10(ad)
Problem 3
Suppose that an investor holds a share of Sophia common stock, currently valued at $50
the value of her holding mi
"Investment Performance and Decisions" Please respond to the following:
From the eActivity, predict the performance of the DOW for the next two years. Provide support for
your prediction.
The Dow Jones Industrial Average (DJIA), by definition, is one of
"Business Risk and Analysis / Investment Valuation" Please respond to the following:
Determine whether a steel company or a retail food chain would have a greater business risk. Provide
support for your rationale.
Business risk is essentially the uncertai
"Portfolio Management" Please respond to the following:
Assess the factors that contribute to someone being riskaverse and how risk aversion may
be diminished for investors.
A riskadverse person and/or investor is basically someone who really does not f
"Asset Analysis / Risk and Return" Please respond to the following:
Recommend an alternative to the CAPM for analyzing capital assets. Provide support for your
recommendation.
The text states that the Capital Market Theory (CAPM) is very similar to portfo
1
Week 8: Discussion 1
Derivative Markets Please respond to the following:
Analyze the complexities of the derivative markets and how the reporting of derivatives
may be deceiving to investors.
Make a suggestion for improving the methods for valuing deriv
Corporate Investment Analysis: Text BookInvestment Analysis and Portfolio Management
FIN 550

Summer 2016
1
Week 7: Discussion 1
"Growth Companies" Please respond to the following:
From the eActivity and based on the growth company selected, assess why it is a growth
stock and if that status is sustainable.
Evaluate whether or not P/E is an effective indicat
Corporate Investment Analysis: Text BookInvestment Analysis and Portfolio Management
FIN 550

Summer 2016
1
Week 10: Discussion 1
"Options" Please respond to the following:
Create a scenario where an investor would benefit from using option contracts to minimize
risk.
Evaluate how models used for valuing stock options can be adapted to other underlying
assets
Corporate Investment Analysis: Text BookInvestment Analysis and Portfolio Management
FIN 550

Summer 2016
FIN 550: Corporate Investment Analysis
Week 10 Homework
Chapter 22
Chapter 22: Problems 3(ad), 5(ad), 7(ac), 10(ab), and 12
Problem 3 Assuming that a oneyear call option with an exercise price of $38 is available for the stock of the DEW C
Now
S1
S2
Corporate Investment Analysis: Text BookInvestment Analysis and Portfolio Management
FIN 550

Summer 2016
FIN 550: Corporate Investment Analysis
Week 9 Homework
Chapter
Problem 3
(1)
(2)
(3)
a.
b.
c.
FIN 550: Corporate Investment Analysis
Week 9 Homework
Chapter
Problem 5
a.
b.
c.
FIN 550: Corporate Investment Analysis
Week 9 Homework
Chapter
Problem 8
a.
b.
Corporate Investment Analysis: Text BookInvestment Analysis and Portfolio Management
FIN 550

Summer 2016
FIN 550: Corporate Investment Analysis
Week 9 Homework
Chapter
Problem 3
(1)
(2)
(3)
a.
b.
c.
FIN 550: Corporate Investment Analysis
Week 9 Homework
Chapter
Problem 5
a.
b.
c.
FIN 550: Corporate Investment Analysis
Week 9 Homework
Chapter
Problem 8
a.
b.
Corporate Investment Analysis: Text BookInvestment Analysis and Portfolio Management
FIN 550

Summer 2016
1
Week 9: Discussion 1
"Hedging" Please respond to the following:
Create a scenario where an investor would benefit from using forward and future contracts
to hedge an existing risk exposure.
Explain how an increase in interest rates may impact the scenar
Corporate Investment Analysis: Text BookInvestment Analysis and Portfolio Management
FIN 550

Summer 2016
Strayer University Washington DC
FIN 550: Corporate Investment Analysis
Summer 2016
Professor: Dr. Gary Bliss
Text Book: Investment Analysis and Portfolio Management
Author: Reilly, F., & Brown, K. (2012). Investment Analysis and Portfolio Management (10t
Corporate Investment Analysis: Text BookInvestment Analysis and Portfolio Management
FIN 550

Summer 2016
1
Week 6: Discussion 1
"Stock Markets and the Economy / Industry Analysis" Please respond to the following:
Assess the impact on the U.S. stock market when the Federal Reserve increases the money
supply, and whether or not you believe the impact is predic
"Globalization and Efficient Markets" Please respond to the following:
From the eActivity, analyze how national exchanges around the world are linked and suggest which
exchange most significantly impacts the U.S. markets. Explain your rationale.
Based on
Danielle Ems  Week 3 Homework Chapter 20
1. b. From the issuer's point of view, preferred stock is less risky than bonds
Bonds could force a company into bankruptcy; whereas preferred stock dividends could
not. The downfall of not paying out the preferre
From the eActivity and based on the growth company selected, assess why it is a growth
stock and if that status is sustainable.
Growth companies are those which have a higher increasing trend in the earnings of company
from overall economy. For the purpo