If you sell a put option, then you may be forced to buy the underlying stock. Lower volatility results in lower put option prices and
lower call option prices. A decrease in the risk free rate is likely to increase the value of put options on the common s
Finance 3090, Spring 2014, Exam 2
1. Suppose the current one-year Treasury Bill rate is 6%, the current three-year Treasury
Bond rate is 6.1%, and the current five-year Treasury Bond rate is 6.2%. According to
the expectations theory of interest r
PPTs Rates/Bonds Notes for HW4
4 factors that affect level of interest rates
Time preferences for consumption
The nominal interest rate is abbreviated as r. This is the rate that you can see when yo
Present valuethe current value in todays dollars of a future sum of
Future valuethe value of an investment at some point in the future
Future value (FV) = Present Value (PV) x Amount it has increased by the end
of 1 year (1+i)
Chapter 9 / Stocks and Their Valuation
-A proxy is a document giving one person the authority to act for another, typically the power to
vote shares of common stock.
-Proxy fight is an attempt by a person or group to gain control of a firm by gett
FIN3090 Ch6 Book Notes
-Product Opportunities are investment opportunities in productive (cash-generating) assets.
-Time preferences for consumption are the preferences of consumers for current consumption
as opposed to saving for future consumption.
Chapter 6 Foreign Exchange Markets Notes
-Nominal exchange rate is the price of one unit of a currency in terms of
-Appreciation is a rise in a currencys price in terms of foreign currency.
-Depreciation is a fall in a currencys
Chapter 5 Securities Markets Notes
-Asset allocation decisions by individuals or institutions about what assets
-Major institutions in securities markets are mutual funds, hedge funds,
brokers, dealers, and investment banks. Other financi
Chapter 8 Notes / the Banking Industry
-Securitization is the process in which a financial institution buys a large
number of bank loans, then issues securities entitling the holders to shares
of payments on the loans.
-Subprime lenders are compan
Capital expenditure a part of cash flows from investing. Suppose the firm were to buy inventory on credit (both current assets and
current liabilities would increase by the same amount). Which ratio will not be affected? Return on Equity. (Current Ratio,
A long term bond with a low coupon rate is likely to be the most sensitive to changes in interest rates. Convertible bonds give holders the right to exchange their
bonds for shares of common stock. Assumptions of CAPM; no tax, investors can borrow or lend
Company Name: Ford Motor Co.
Your Name: Meghan Woffard
Total Current Liabilities
Total Non Current Liabili