F370 Mid-term Notes
Study Packs: A1, A2, A3, B1
Financial Contract: involves the exchange of money or cash flow over time; exchange of risk
over time
Money Market Securities: Short term (less than a year); also called debt securities (future flow
is legal

1.0 Points
Question1of10
You are currently doing some market analysis and determine that the yield on one-year Treasury Bills
has averaged 2.4%. At the same time you determine that the S & P 500 (what you call the Market)
has had an average return of 8.2%

F370 B2 Study Pack Solutions - Page 1
2015 Dan Greiner
Solutions to B2 Problems
1. Return and Wealth Confidence Intervals. You have built a portfolio of stocks and
believe that its expected (required) return is r = 0.09 and its total risk is r = 0.25 for

F370 Midterm Notes
Study Packs: A1, A2, A3, B1
Financial Contract: involves the exchange of money or cash flow over time; exchange of risk over time
Money Market Securities: Short term (less than a year); also cal

Part 1 of 1 -
15.0 Points
1.0 Points
Question1of15
Consider a cash flow stream that has a group of cash flows that keeps repeating on forever (see the
timeline given below). If the streams discount rate is 8%, then to the nearest dollar, what is its prese

Part 1 of 1 -
10.0 Points
1.0 Points
Question1of10
You and a friend are both thinking of purchasing a financial contract that will pay you $500 at the end
of each year for the next three years. You think the risks involved merit a rate of return of 4%, wh

F370 Fall 2015 Quiz #2
F370 Quiz #2 Portal Opens: Thurs Sept 3rd at 4pm Closes: Tue Sept. 8th at 11:55pm
19 Questions Worth a Total of 25 Points
Perpetuity Questions
D
1. A perpetuity has an annual payment level of $43 and a current market price of $405.6

F370 Quiz #4 Portal Opens: Wed Sept 16th at 11am Closes: Sun Sept. 20th at 11:55pm
13 Questions
20 Total Homework Points
Note: To help you prepare for some of the conceptual questions on the exam, the conceptual questions in this
homework are biased towar

Question1of10
What is the risk-free rate?
1.0 Points
A. 1.45%
B. 3.39%
C. 0.00%
D. 2.50%
E. None of the
above
Question2of10
What is the maturity risk premium for the 20-year Treasury bond?
1.0 Points
A. 1.58%
B. 1.61%
C. 1.66%
D. 1.79%
E. None of the
abov

Question1of10
What is the Internal Rate of Return for the new project?
1.0 Points
A. 10.7%
B. 10.8%
C. 10.9%
D. 11.0%
E. None of the
above
Question2of10
What is the Project Cost of Capital for the new project?
1.0 Points
A. 8.3%
B. 10.4%
C. 10.5%
D. 12.4%

F370 A1 Study Pack - Page 1
2015 Dan Greiner
Study Pack for the A1 Lecture
Vocabulary for the A1 Lecture (Be comfortable with these terms)
Financial Contract, Financial Security
Money Market Securities: T-Bill, Commercial Paper, Certificate of Deposit
De

Question1of14
Calculate Beta-project in the following table.
1.0 Points
A. 0.86
B. 0.81
C. 0.78
D. 0.76
E. None of the
above
1.0 Points
Question2of14
In theory, can a firm pursue projects that all have a beta greater than 1.0 and end up having its stock
s

Question1of7
WhatistheBetaofFirmA?
1.0 Points
A. 1.0
B. 1.3
C. 1.5
D. 0.85
E. None of the
above
Question2of7
WhatistheBetaofFirmC?
1.0 Points
A. 1.0
B. 0.17
C. 1.23
D. 1.17
E. None of the
above
Question3of7
WhatistheBetaoftheMarket?
1.0 Points
A. 1.0
B. 4

Part 1 of 1 -
10.0 Points
Question1of10
What is the risk-free rate?
1.0 Points
A. 1.45%
B. 3.39%
C. 0.00%
D. 2.50%
E. None of the
above
Question2of10
What is the maturity risk premium for the 20-year Treasury bond?
1.0 Points
A. 1.58%
B. 1.61%
C. 1.66%
D.

Quiz #7: Stock Risk and Return
Closes: Thursday Nov 5th at 11:55pm
19 questions, each worth 2 pts. Total Points = 38 Points. Students have three attempts on this quiz.
Numerical Problems
1. You are an investor who believes that their full wealth (of $300,

Question1of10
What is the Internal Rate of Return for the new project?
1.0 Points
A. 10.7%
B. 10.8%
C. 10.9%
D. 11.0%
E. None of the
above
Question2of10
What is the Project Cost of Capital for the new project?
1.0 Points
A. 8.3%
B. 10.4%
C. 10.5%
D. 12.4%

Part 1 of 1 -
10.0 Points
1.0 Points
Question1of10
You and a friend are both thinking of purchasing a financial contract that will pay you $500 at the end
of each year for the next three years. You think the risks involved merit a rate of return of 4%, wh

F370 Fall 2015 Quiz #3
F370 Quiz #3 Portal Opens: Thurs Sept 10th at 2pm Closes: Sun Sept. 13th at 11:55pm
13 Questions
20 Total Homework Points
Advanced Perpetuity Questions
1. The next flow (1 year from now) for a growing annual perpetuity is expected t

F370 Fall 2015 Quiz #5
F370 Quiz #5 Portal Opens: Saturday Sept 25th at 8am Closes: Tues Sept. 29th at 11:55pm
8 Questions
24 Total Homework Points All questions worth 3 points
Questions Related to Sub-Prime Loans and the 2007-2008 Crises
C
1.
A bank make

F370 Quiz #6: Opens: Wednesday Oct 14th at Noon Closes: Sunday Oct 18th at 11:55pm
All Questions are worth 3points: Total Points for Homework = 30 points
For Questions 1-8, consider the following table of data for a sample of bonds:
Remaining
Term
Market

Info and Advice for Exam 1 in F370
30 Questions
guess as to class average: 73 to 78% there usually are some students that get 100%
and several who miss just one question. Each question worth 3.3 points. Answer ALL questions.
Three Parts each with 10 quest

F370 Mid-term Notes
Study Packs: A1, A2, A3, B1
Financial Contract: involves the exchange of money or cash flow over time; exchange of risk over time
Money Market Securities: Short term (less than a year); also called debt securities (future flow is legal

F370 B1 Study Pack - Page 1
2015 Dan Greiner
Study Pack for the B1 Lecture
Vocabulary for the B1 Lecture
Yield-to-Maturity, Implied Return or Implied Yield
Competitive Yield, The Yield Curve
Price Risk
Maturity Risk and Risk Premiums (also called Interes

B2 Notes
Investors are risk averse and are worried about the confidence interval of returns they might
face when buying a risky investment
They use standard deviation of returns r as a measure of the size of a confidence interval
(usually use 95% interv

F370 Mid-term Notes
Study Packs: A1, A2, A3, B1
Financial Contract: involves the exchange of money or cash flow over time; exchange of risk over time
Money Market Securities: Short term (less than a year); also called debt securities (future flow is legal

F370 Solutions to A2 Study Pack - Page 1
2015 Dan Greiner
Solutions to the A2 Numerical Problems
I.
Basic Problems
Lump Sums
1. If you save a present value of $340 and plan to earn a 6.5% annual return, then
what future value do you expect to have after

F370 Solutions to A3 Study Pack - Page 1
2015 Dan Greiner
Solutions to A3 Problems
For questions #1 and #2, consider a private loan agreement in which a bank lends a firm a
loan amount of $54,000 at a contracted interest rate of 7.2% annually.
1.
If the

F370 Solutions to A2 Study Pack - Page 1
Solutions to the A2 Numerical Problems
I.
Basic Problems
Lump Sums
1. If you save a present value of $340 and plan to earn a 6.5% annual return, then
what future value do you expect to have after 9 years?
2. If you

F370 Solutions to A3.1 Study Pack - Page 1
2017 Dan Greiner
Solutions to A3.1 Problems
Basic Loan Questions
For questions #1 and #2, consider a private loan agreement in which a bank lends a firm a
loan amount of $54,000 at a contracted interest rate of

Page 1
Solutions to A3.2 Study Pack
Problems
1. As CFO, you are evaluating an investment proposal that involves the use of a very new
advertising strategy for one of your firms products. The timeline of the projects actual cash
flow is estimated as shown

F370 Sum 2017 Quiz #4
F370 Quiz #4 Abbreviated
Practice Quiz
Portal Opens: Fri June 2nd
at 3pm
You automatically get 9 points for trying the quiz
Questions for the A3.2 Unit
Information for Questions 1 & 2
You working on the final touches of your project