Finance 551
Homework#1: Solutions
1. The forward price of corn for delivery in 2 months is $4.00 per bushel, while the spot
price is $3.82. The 3-mth interest rate is 5% per annum compounded continuou
Instructions:
1. Use a double exponential smoothing forecasting method to forecast the
average CO2 levels for the years 2014 - 2016.
2. To initiate the double exponential smoothig method, you need to
San Fransisco - Denver - St. Louis Network Management Example
Number
1
2
3
4
5
6
ODF
SF to Denver full Fare
SF to Denver discount
Denver to St. Louis full fare
Denver to St. Louis discount
SF to St. L
Finance 551
Quiz 2 Prep Problems
1.
Assume there exists a tranche of a CMO with a total principle value of
$120,000,000. This tranche is divided into $100,000,000 of floaters and
$20,000,000 of invers
Practice Problems on Synthetic Swaps & Credit Risk
1. Re-work the example from the GM case that I went through in class, but use 10%
strike rates instead of 9%.
GM would issue fixed at 7.625%, then th
Finance 551
Practice Problems: Solutions
1. The forward price of wheat for delivery in 3 months is $3.90 per bushel, while the spot
price is $3.60. The 3-mth interest rate is 8% per annum compounded c
Finance 551
Quiz 2
April 24, 2012
Time Limit: 30 Minutes
Total Points: 100
*Note: Please read each question carefully. Be sure to answer each question in its
entirety. You may use the formula sheet in
Finance 551
Quiz 1
March 20, 2012
Time Limit: 30 Minutes
Total Points: 100
*Note: Please read each question carefully. Be sure to answer each question in its
entirety. You may use the formula sheet in
Finance 551
Practice Problems for Final Exam: Solutions
1. Assume there exists a tranche of a CMO with a total principle value of
$120,000,000. This tranche is divided into $60,000,000 of floaters and
Finance 551
Duration and Swaps Practice Problems: Solutions
1. A 5-year bond with a yield of 11% (continuously compounded) pays an 8% coupon at the
end of each year.
a) What is the bonds price?
B = 8e
MBA551 (2012)
Homework #2: Solutions
1.
If firm value can either rise or fall by 30% each period (u = 1.30, d = 0.70) with
probability q and (1-q) respectively, in a 1-period model, calculate the time
Instructions:
The data on the next sheet represents weekly sales for a pack of bathroom tiles at a reta
store in Atlanta, GA. The stocking policy at the store is to replenish and hold 250 units i
stoc