Chapter 9 & Chapter 14 Homework
Homework Problems:
(1) Company BW has issued 2,000 corporate bonds with a maturity value of $1,000
and a couple rate of 6%. Coupon payments are made every 6 month and t
ITEM
NOI
NOI growth rate
Value
Loan Amount
LTV
r
m
N
PMT (monthly)
PMT (annually)
NOI Excess
Origination Fee
Capitalization Fee
ITEM
$100,000
3%
$1,000,000
$900,000
90%
8%
12
20
($7,528)
$90,336
50%
2
Mr. FerTipton,
To start of this letter I would first like to thank you for giving me this big opportunity to prove my
ability of investing with your provided funds I am proud to say that I was able to
Risk Management and Insurance Review for 1st Exam
1) Direct vs. Indirect loss - Direct Losses are the immediate, or first, result of an insured peril. Indirect
losses are secondary result of an insure
Chapter 1 Vocab
Investment- Commitment of current resources in the expectation of deriving greater resources in the
future.
Real Assets- Assets used to produce goods and services.
Financial Assets- Cl
Risk Management & Insurance Extra Credit - Vicarious Liability in respect to Iowa State
University Professor Steven Leath
Logan Hein (668113) -12/8/2016
In this particular case the Iowa State presiden
Optimal Risky Portfolio
Optimal Risky Portfolios
Portfolio of Two Risky Assets
Suppose you hold a proportion w in asset A
and (1-w) in asset B
The portfolio expected return and risk is given
by
E(RP )
Holding Period Return
Return, Risk, and Risk
Aversion
Return =
Ending Price - Beginning Price + Intermediate Income
Beginning Price
Rt +1 =
An Example
You bought IBM stock at $40 last month. The
price
Valuation
Equity Analysis I: Valuation
Models
Why Is It Important?
Valuation is one of the most important steps
in investments and portfolio management
To get good return on your investment, you
need
Random Variable
Probability Distribution
Each possible outcome is associated with a
probability
A random variable is represented by its
probability distribution, i.e. the set or list of all
possible v
Basic Formulas
Time Value of Money
Basic Formulas
FV t = PV t (1 + r )
t
Simple Qualitative Results
FV t = PV t (1 + r )
t
The future value is higher than the present
value if r > 0.
The present value
Why Performance Evaluation?
Portfolio Performance
Evaluation
What is important?
Performance evaluation requires historical
performance data
If there is only one piece of information youd
like to know
Expected Return
Capital Asset Pricing
Model (CAPM)
What should be ABCs share
price?
ABC Inc. is expected to pay a liquidating (i.e.,
terminal) dividend of $112 per share one year
from today.
The requi
Portfolio Construction
Capital Allocation
Capital Allocation and Security
Selection
Capital allocation decision is concerned with
Security selection decision is concerned with
Capital Allocation
In ma
Financial Assets
Financial Markets And
Financial Instruments - Part I
Real assets are _.
Financial assets _.
What is a Securities Market?
Primary and Secondary Markets
A securities market is a place w
Market Efficiency
The Efficient Market
Hypothesis
Is Market Efficient?
If not efficient
mispriced securities
arbitrage opportunity
efficient
But information is not always publicly
available
Mispricing
Overview of Term Structure
of Interest Rates
Relationship between yield to maturity and
maturity
Information on expected future short term
rates can be implied from yield curve
Three major theories ar
What is a bond?
Bond Valuation I
Coupon Rate and Current Yield
Bond Valuation
Important characteristics of a bond:
Face Value ($ F)
Coupon ($ C)
Maturity (t periods)
Required rate (r )
Bond is an I.O.
What is the intrinsic value of a
stock?
Behavioral Finance
The Psychology of Finance
Behavioral Finance
Behavioral Finance deals with the influence
of psychology on various aspects of financial
market
1. Which of the following statements are true or false?
(1) There is a high correlation between the standard of living and the quality of life
(2) Defining your consumption means planning how you spen
Directions: Please answer the following 40 questions designed to test your knowledge
of insurance decision making, investing in stocks, bonds and mutual funds, retirement and estate
planning. Each que
Financial Planning
Exam II
Sample Exam 2014
True/False
Indicate whether the sentence or statement is true or false.
_
1. Some of the issues that the Affordable Health Care Act are attempting to addres
1. The amount of money we set aside for future consumption will be determined by:(a) our
level of current wealth (b) how much we currently earn and spend (c) the number of college
degrees we have (d)
Finance 3130
2012
Corporate Finiance Sample Final Exam
Spring
True/False
Indicate whether the statement is true or falsewith A for true and B for false.
_
1. Interest paid by a corporation is a tax de
Corporate Finance
Sample
Exam 2A
Dr. A. Frank Thompson
True/False
Indicate whether the statement is true or false.
_
1. The market value of any real or financial asset, including stocks, bonds, CDs, c
Risk Management and Insurance
Finance 3050
Sample Final Exam
Dr. A. F. Thompson
Directions: Please answer the following questions designed to test your knowledge of the
fundamentals of risk and insura
Corporation Finance
Spring 2012
Sample Exam 2B
True/False
Indicate whether the statement is true or false.
_
1. The total return on a share of stock refers to the dividend yield less any commissions p
Risk Management and Insurance
Dr. A. Frank Thompson
Sample Exam 2
Directions: Please answer the following questions designed to test your knowledge of risk
management and insurance concepts, fundament