Chapter Outline
Chapter 8 ~ Net Present Value and Other
Investment Criteria
Net Present Value
The Payback Rule
The Average Accounting Return
The Internal Rate of Return
The Profitability Index
The Practice of Capital Budgeting
1
Capital Budgeting Concepts
11101
Chapter 10
Some Lessons from Capital Market
History
1
12102
Chapter Outline
Returns
The Historical Record
Average Returns: The First Lesson
The Variability of Returns: The Second
Lesson
More on Average Returns
Capital Market Efficiency
2
Risk,
GUIDELINE FOR THE STRATEGIC PLAN PROJECT
I.
II.
COMPANY BACKGROUND
1. Company history (name, location, founders, founding year, legal form, etc)
2. Business description
3. Management description
4. Operation (size, number of employees, geographic coverage
CASE QUESTIONS
Coach Inc in 2012: Strategy in the Accessible Luxury Goods Market
Assignment Questions
1. What are the defining characteristics of the luxury goods industry? What is the industry like?
2. What is competition like in the luxury goods industr
Dakota Oxford
2204 East Georgia Ave.
Ruston, LA 71270
Cell: 3185257190
[email protected]
January 15, 2016
Merrill Lynch
Dallas, TX
Dear Sir or Madam:
I am writing to express my interest in your current opening in the Financial Advisor Program as a
Prog
Face Value:
Market Price
Coupon Payment
Discount Rate
Periods
1000
$ 1,000.00 1. If the number of periods is 10, face value is $1000, the discount
$1,000.00 $ 1,000.00 rate per period is 3.27%, and coupon payment is $40, what is the
bond price?
$100.00 $
We're going to do a fullblown corporate financial model. It's long, and
looks complicated. Don't be discouraged  it's just real life  and if you go
step by logical step, pretty soon you'll have a model that predicts the
future of the firm's financials
2014 CRIME IN TEXAS
NOTICE: Due to Texas transition to the FBIs new definition of rape, we are working to validate the 2014 data and are currently unable to produce final 2014 rape numbers (including
clearance and arrest information) by the time of this p
County Name
County/City/Precinct
Authorized Beverages
Ector
Lubbock
Tom Green
Hunt
Johnson
Brazos
Galveston
Nueces
Parker
Kaufman
Liberty
Midland
Angelina
Brazoria
Comal
Dallas
Travis
Cameron
Webb
Orange
Montgomery
Bell
Bexar
Rockwall
Harris
Guadalupe
El
Dakota Oxford
FINC 406
January 16, 2016
The Effects of a County becoming Wet on Crime Rates
Intro & Background:
There has been a large shift in alcohol policy throughout the state of texas in the last 20
years. Counties were broken into 3 categories; wet,
Frogs Leap Winery
Janequa Mitchell
Dakota Oxford
Sean OConnor
Seong Park
The Story of Frogs Leap
1972: As an undergraduate at Cornell University, John Williams
obtains an internship at Taylor Wine Company, and falls in love with
wine.
197476: John make
Chapter 1: Real Estate Investment Basic Legal Concepts
(1) Abstract of title: A historical summary of the publicly recorded documents that affect a title (2) Bargain and Sale Deed: Conveys property without seller warranties; as is deed; Buyer of property
Chapter 2 DiscreteTime Stochastic Processes and Lattice Models
2.1 DiscreteTime Stochastic Processes
let ( F P ) be a probability space. F then is the collection of all possible random events. Thus, F represents all the information contained in this pro
observe from X are in the algebra generated by events fX xg for all real numbers x. We call the algebra generated by fX xg x 2 R the Borel algebra with respect to X and denote it as BX . Hence, BX represents all the information that can be obtained fro
Thus, Bt t = 0 1 form a ltration on ( F P ), called the Borel or natural ltration with respect to X (t) t = 0 1 : This ltration contains exact information obtained from X (t) t = 0 1 and Bt is the exact information obtained from X (t) t = 0 1 up to time t
can be used to model securities. Let Y1 Y2 Yk be a sequence of independent, identically distributed(iid) Bernoulli random variables de ned on a probability space ( F P ). First, let us assume that for a given h > 0, 8 >h < Yk = > (2.1) : ;h and Pr(Yk = h)
m=0 1 t. We can also easily compute its mean and variance. E (X (t) = tE (Y1) = 0 2 V ar(X (t) = tV ar(Y1) = th2 = t h :
Moreover, there is a recursive relation among P (x t) t = 0 . It follows from (2.5) (2.6)
P (x t + ) = Pr(Xt = x ; Yt+1) = E (Pr(Xt =
1. Adjust the probabilities of the up movement and the down movement. Let Pr(Yk = h) = q Pr(Yk = ;h) = 1 ; q: To satisfy equations in (2.9), we must have
h(2q ; 1) =
which yields
4h2 q(1 ; q) =
2
1h h = 2 + 2 2 q = 2 1 + 1 + 1= 2 The corresponding recursi
are only two states of economy over the next time interval: the upstate and the downstate. The probablities of the upstate and the downstate are q and 1 ; q, respectively. The return of the security over the next time interval is u when the upstate is att
There are T + 1 consumption dates separated in regular intervals. Without loss of generality, we assume these dates are t = 0 1 T . Tradings take place only at t=0 1 T ; 1. There are a nite number of states of economy = f!1 !2 with the probability at stat
Since at time t the securities are priced based on the information available up to time t, the price process (p(0) p(1) p(T ) is a stochastic process on ( F Ft P ). We further assume that one of these securities, say, the rst security, is a riskfree bond
(t) such that
c(t) =
N X
for t = 1 2 T . A market is complete if every consumption process is attainable. A self nancing trading strategy is a trading strategy such that
N X
n=1
( n (t ; 1) ; n (t)pn(t)
(2.20)
for t = 1 2 T ; 1. In other words, under a s
F01
QQ QQ Q
: 1 XXXX z X 2 F11 F2 3PPPPP : PPP F23 q PXXX XXX z
F21 X
QQ
Q F12 s QPP
1F2 PPP
4

: PPP F25 q PXXX XXX z
Figure 2.1: Tree structure of a lattice model Thus, ij ; ij;1 is the number of sets in Ft split from Ftj;1 . Summarizing the discussio
Conversely, Suppose that none of the associated one period models admits arbitrage but the price process p(t) t = 0 1 T admits arbitrage. Let (t) t = 0 1 T ;1 be an arbitrage strategy. Thus,
c(t) =
N X n=1
( n(t ; 1) ; n (t)pn(t) 0
for t = 0 1 T and c(s)
3.2 RiskNeutral Probability Measures
We now always assume that the price process p(t) t = 0 1 T does not admit arbitrage. We will show in this section that under the noarbitrage assumption, there is a probability measure on ( F ) such that the present v
where Q(s Fti) = Q(s !) for ! 2 Fti and s t. It is well de ned since Q(s) s = 1 all are Ftmeasurable. Proceeding in this manner yields
J X j =1
t
(3.5)
Q(!j ) =
=
m0 X k=1
Q(1 F1k ) = 1:
T XY
Furthermore, for any Fti 2 Ft
Q(Fti) =
=
X
!j 2Fti t Y s=1
Q(!
From we have
EQ(an(t) jFt;1) = an(t ; 1) D0(Ftj;1 )Q(Ftj;1 ) = (1 + r)p(Ftj;1):
Thus, none of the one period models admits arbitrage, neither does the multiperiod model. The probability measure Q under which the present value processes are martingales is