Chapter 3 Exercises
End of Chapter
1. Forward Rate.
a. Assume that as of today, the annualized two-year interest rate is 13 percent, while the
one-year interest rate is 12 percent. Use only this information to estimate the oneyear forward rate.
ANSWER:
(1
1. ABC Corporations bonds have 12 years remaining to maturity. Interest is paid
annually and the bonds have a par value of $2000, and the coupon interest rate is
9%. The bonds have a yield to maturity of 9%. What is the current market price
of these bonds
Homework 1: Due on Thursday, February 16 at the beginning of class.
1. What does interest inelasticity mean? Would you expect business demand for
loanable funds to be more or less interest-elastic than the federal governments demand
for loanable funds? Wh
Name: _
FIN 405- Homework Assignment
1. Which is greater $400.25 today or $400.25 1 year from now if the interest rate is 5.5%?
a. $400.25 today
b. $400.25 in one year
2. *How much would you be willing to pay for an ordinary annuity, which pays $100 a yea
Homework
1. Explain a sinking-fund provision and how can it reduce the investors risk?
2. Explain call provisions on bonds and how they can affect the pricing of a bond?
3. Why are convertible bonds typically issued at a higher price than other bonds?
4.
1. Assume that the price of a $1,000 zero coupon bond with five years to maturity is $567.43
when the required rate of return is 12 percent. If the required rate of return suddenly changes to
15 percent, what is the price elasticity of the bond?
2. If the
Homework
FIN 405: Intermediate Finance
1. Stock Valuation. Why Does the Value of a share of stock depend on dividends?
2.
Common versus Preferred Stock. Suppose a company has a preferred stock issue and
a common stock issue. Both have just paid a $2 divid
An Outline for Your Research Paper
Paper Requirements:
About 10 pages of substance (this excludes the title page, references, and the appendix).
Double spaced, 12-point font, 1 margins, and a traditional font. Use Microsoft Equation 3.0 for equations.
You
Violent Crime
(A Study of Violent Crime Rates)
By: Rachel Anliker, Jordan Olson, and Chloe Zimmerman
Abstract
This study explores possible contributing factors to violent crime in capital cities across the
United States. We used a study that investigated
Violent Crime
(A Study of Violent Crime Rates)
By: Rachel Anliker, Jordan Olson, and Chloe Zimmerman
Abstract
This study explores possible contributing factors to violent crime in capital cities across the
United States. We used a study that investigated
Course Syllabus
ECON 601: Quantitative Methods
Fort Hays State University
Fall 2016
Instructor:
Office:
E-mail:
Phone Number:
Office Hours:
Dr. Samuel Schreyer
McCartney Hall 203D
[email protected]
785-628-5683
W 1:00 4:30; TTh 8:30-9:00; Su 8:00-10:00
ECFI 601
Fall 2016
Problem Set #1
Due: Tues., Sept. 6
A letter grade will be deducted from work that is not typed and/or contains unstapled pages. All
work must be shown. For problems requiring the use of Stata, include all Stata output and
commands with
Problem Set 5
Jordan O, Rachel, Chloe
1.
a.
Hypothesis:
H 0 : B 4=B5=B6=B7 =0
H 1 : At least one of the coefficients B 4 , B5 , B6 ,B 7 is not zero
Decision Rule: Reject
Test Statistic: F =
F
H 0 if F >
SSEReduced SSE Full
(KL)
SSEFull
(nK 1)
3.46 > 2.53
Jordan Olson
ECFI 601
Fall 2016
1)
Problem Set #3
Due: 10/7/16 Noon
a) ^
Salary i=3179.5+139.6 Educ i+ 1.5 Exper i+ 20.6 Timei
b)Hypothesis:
H 0 : 1= 2= 3 =0
H a : At least one betadoes not equal zero
Decision: Reject null hypothesis if the F statistic >
Jordan Olson
ECFI 601
Fall 2016
Problem Set #1
Due: Thursday, Sept. 8
1)
a. P ( 0.0 Z 1.3 )=Z=.4032
b. P ( 0.0 Z 0.8 )=Z=.2881
c. P ( 0.0 Z 1.56 )=Z=.4406
P ( 0.0 Z 0.3 )=Z=.1179
Z = .4406 - .1179 = .3227
d. P ( 0.0 Z 2.03 )=Z=.4788
P ( 0.0 Z 1.71 )=Z =.4
By City
Capital city
Albany
annapolls
Atlanta
Augusta
Austin
Baton Rouge
bismark
Boise
Boston
Carson City
Charleston
Cheyenne
Columbia
Columbus
concord
Denver
Des Moines
Dover
Frankfort
Harrisburg
Hartford
Helena
Honolulu
Indianapolis
Jackson
Jefferson Ci
Rachel, Jordan O., Chloe
Problem Set 4
1
40000
police
60000
80000
100000
After transforming the data, we recreated the
scatter plot and replaced the original values with the
log values and saw a more linear relationship.
16
20000
15
0
lexpend
17
0
18
19
e
Permit to
Purchase
Gun Laws
Permit to Carry
Registration of
Firearms
Licensing of
Owners
13 States do have
restrictions
7 States do have restrictions
38 States do not have
restrictions
39 States do not have
restrictions
44 States do not have
restrictions
1) Summary statistics refer to what?
a) Summary statistics are calculated not estimated.
2) Inferential statistics refer to what?
a) Inferential statistics generalize these characteristics to the population by using
the probability theory.
3) What is a ra
Capital City
Albany
Annapolis
Atlanta
Augusta
Austin
Baton Rouge
Bismarck
Boise City
Boston
Carson City
Charleston
Cheyenne
Columbia
Columbus
Concord
Denver
Des Moines
Dover
Frankfort
Harrisburg
Hartford
Helena
Honolulu
Indianapolis
Jackson
Jefferson City
ECFI 601 Quantitative Methods
Exam 2 Study Guide
About the exam
You have the option to begin your exam at 8:30.
The exam is composed of two parts: (i) multiple choice; and (ii) short-answer/calculation questions.
You only need to bring a pencil and a c
Jordan Olson
ECFI 601
Fall 2016
1)
Problem Set #2
Due: Friday, Sep. 30
a) ^
Divedend Yieldi=2.03+ .374 EPS i
b) Hypothesis:
H 0 : 1=0
H 1: 1 0
Decision Rule:
Reject null hypothesis if t-value is > 2.02, or t-value is < -2.02
Test Statistic:
.156
Decision:
* FYI: ANY TEXT IN GREEN IS A "COMMENT", WHICH MEANS STATA IGNORES IT WHEN
RUNNING THE COMMANDS.
* LOAD DATA *
clear
use "/Users/Olson/Documents/Quantitative Methods/Violent Crime.dta"
set more off
*
*
*
*
*
*
*
*
* CREATE DUMMY VARIABLES FOR STATE GUN LA
Jordan Olson
ECFI 601
Fall 2016
Problem Set #4
Due: Nov. 4th
1)
a)
2)
a)
After running the data through Stata and doing a tsline with bets, we can see that
it is not linear and it suggests that as time goes on the bets go up at an increasing
rate, which i