Class 2
Bonds
Question 1
You have bought a bond with 5 year maturity, $1000 face value and 7% coupon. The yield to
maturity is 12%. How much have you paid for this bond?
Question 2
Which price would y
Class 10
Forward Pricing
Question 1
The current value of a share in Robotronics is $12.50. The one year riskless rate is 6%.
a) What are the prices of three- and five-year forward contracts on Robotro
Class 6
Markowitz theory and CAPM
Question 1
Question 2
Question 3
c.
d.
Find the weights of Dell and Microsoft in a portfolio with the minimum variance.
Plot all portfolios from the previous parts on
Class 5
Portfolio theory
Question 1
Lambeth Walk invests 60 percent of his funds in stock I and the balance in stock J. The standard
deviation of returns on I is 10 percent, and on J it is 20 percent.
Question 2
a.
It is sometimes more convenient to describe the curve by expressing both coordinates as
functions of a third variable . The Mean-Variance Frontier is a parametric curve and is
described
Class 8
Multifactor models and the APT
Question 1
Assume that stock returns are generated by a two-factor model. The returns on three welldiversified portfolios, A, B and C, are given by the following
Class 3
Term Structure of Interest Rates
Question 1
You have estimated spot rates as follows:
Year
1
2
3
4
5
a.
b.
c.
d.
e.
f.
Spot Rate
0.25%
0.50%
0.75%
1.00%
1.25%
What are the forward rates for ea
Class 4
Stocks
Question 1
Question 2
Question 3
The table below reports the accounting information for Alpha plc per 1 stock. Assume that the
dividends will grow at the same constant rate after year 3
Class 7
CAPM
Question 1
The diagrams below show the ranges of attainable portfolios (combinations of expected return and
standard deviations).
a. Which diagram is incorrectly drawn and why?
b. Which i