FIN 6302 (476)
INVESTMENTS
Summer 2011
Instructor: Peihwang Philip Wei
Class Time: Internet
Office: KH 431
Phone: 280-6602
E-mail: pwei@uno.edu
OBJECTIVES: To provide current state of knowledge on theories and practices of
investments. The emphasis howeve
Name: Xavier M. Granja
FIN 6302 INVESTMENTS
MID-TERM EXAM, SUMMER 2011
8 A.M. JUNE 30, 2011
THIS IS A TAKE-HOME EXAM. YOU MUST COMPLETE IT AND SUBMIT IT BY
noon SATURDAY JULY 2, 2011. ANSWER ALL QUESTIONS FOR A TOTAL OF
100 POINTS. INSERT SPACE AS NEEDED.
NAME: SHORT ANSWERS
SS#
INSTRUCTIONS
FIN 6302 INVESTMENTS
FINAL EXAM, SUMMER 2011
8 A.M. JULY 22, 2011
INSTRUCTIONS
THIS IS A TAKE-HOME EXAM. YOU MUST COMPLETE IT BY NOON SUNDAY
JULY 24, 2011. ANSWER ALL QUESTIONS FOR A TOTAL OF 100 POINTS.
INSERT SPACE A
Book Model-Call Analysis SAM
13
14
15
16
17
18
19
20
21
22
23
24
25
A
d1
d2
N(d1)
N(d2)
Black-Scholes Call Value
Black-Scholes Put Value
B
-0.5331551
-0.6059691
0.29696
0.27227
$1.20000
$5.05924
Intrinsic Value of Call
Time Value of Call
$0.00000
$1.20000
Option Values
Intrinsic value - payoff that could be
made if the option was immediately
exercised.
Call: max (stock price - exercise price, 0)
Put: max (exercise price - stock price, 0)
Time value - the difference between the
option price and the intr
Option Terminology
Buy - Long
Sell - Short
Call - Right to Buy at Fixed Exercise Price
Put - Right to Sell at Fixed Exercise Price
Key Elements
Exercise or Strike Price
Premium or Price
Maturity or Expiration
Cover
image
20- 1
Market and Exercise
Models of Equity Valuation
Balance Sheet Models
Book Value
Dividend Discount Models
Price/Earning Ratios
Cover
image
18- 1
Table 18.1Financial Highlights for Microsoft
Corporation, March 8, 2006
Cover
image
18- 2
Limitations of Book Value
Book value
Bond Pricing Relationships
Inverse relationship between price and
yield.
An increase in a bonds yield to maturity
results in a smaller price decline than
the gain associated with a decrease in
yield.
Long-term bonds tend to be more price
sensitive than
Overview of Term Structure
The relationship between yield to maturity
and maturity.
Information on expected future short term
rates can be implied from yield curve.
The yield curve is a graph that displays the
relationship between yield and maturity.
Bond Characteristics
Face or par value
Coupon rate
Zero coupon bond
Compounding and payments
Accrued Interest
Indenture
Cover
image
14- 1
Different Issuers of Bonds
U.S. Treasury
Notes and Bonds
Corporations
Municipalities
International Governm
Behavioral Finance
Investors Do Not Always Process
Information Correctly
Investors Often Make Inconsistent or
Systematically Suboptimal Decisions
Cover
image
12- 1
Information Processing Critique
Forecasting Errors
Overconfidence
Conservatism
Sample
Efficient Market Hypothesis (EMH)
Do security prices reflect information ?
That is, are prices right?
Why look at market efficiency?
Implications for business and corporate
finance
Implications for investment
Cover
image
11- 1
Figure 11.1 Cumulative
FIN 6302 - 476
International Finance
PhD. Peihwang Philip Wei
Summer 2011
Name: Xavier Granja
Date: 7/19/2011
TERM PROJECT
a) Which firm has greater beta and does it make sense? The two firms must be in the same industry to
minimize other risks that compl
FIN 6302
Investments
PhD. Peihwang Philip Wei
Summer 2012
Name: Tatiana Rodriguez
Date: July 23, 2012
Simulation Report
The Simulator uses real data from the stock markets that reproduces the experience of using a
real online brokerage account. We use the
FIN 6302
Investments
PhD. Peihwang Philip Wei
Summer 2012
Name: Tatiana Rodriguez
Date: July 23, 2012
Simulation Report
The Simulator uses real data from the stock markets that reproduces the experience of using a
real online brokerage account. We use the
Based on option price on Goggle, Google's expected standard deviation of returns is roughly
25%. The market's expected standard deviation of returns is about 21% (which is also referred to
as the VIX index o fear index). Google's beta is estimated to be 1
There are reasons to estimate Beta ourselves:
Yes, there are reasons to estimate beta ourselves and in most of the cases, Beta is estimated by
the regression tool.
Some of these reasons are:
When the firm is going through significant changes (like merger
NAME:
Tatiana Rodriguez
FIN 6302 INVESTMENTS
MID-TERM EXAM, SUMMER 2012
8 A.M. JUNE 28, 2012
THIS IS A TAKE-HOME EXAM. YOU MUST COMPLETE IT AND SUBMIT IT BY
8 P.M. SATURDAY JUNE 30, 2012. ANSWER ALL QUESTIONS FOR A TOTAL OF
100 POINTS. INSERT SPACE AS NEE
NAME: FERNANDO SILVA
SS# 2261248
FIN 6302 INVESTMENTS
FINAL EXAM, SUMMER 2011
8 A.M. JULY 22, 2011
INSTRUCTIONS
THIS IS A TAKE-HOME EXAM. YOU MUST COMPLETE IT BY NOON SUNDAY
JULY 24, 2011. ANSWER ALL QUESTIONS FOR A TOTAL OF 100 POINTS.
INSERT SPACE AS NE
NAME: TATIANA RODRIGUEZ
SS#
FIN 6302 INVESTMENTS
FINAL EXAM, SUMMER 2012
8 A.M. JULY 19, 2012
THIS IS A TAKE-HOME EXAM. YOU MUST COMPLETE IT AND SUBMIT IT BY
8 P.M. SATURDAY JULY 21, 2012. ANSWER ALL QUESTIONS FOR A TOTAL OF
100 POINTS. INSERT SPACE AS NE
CH. 21 OPTION VALUATION
The value of an option can be broken down into two parts: intrinsic value and time value.
Intrinsic value is the value of an option if exercised immediately, while time value reflects the
probability of stock price moving in a favo
CH. 20 OPTIONS MARKETS
Options represent right to buy (call options) or sell (put options) an asset (the underlying assets)
at a fixed price (called exercise price or strike price) in the future. The holders need not exercise
the contract, and options wil
CHAPTER 18 EQUITY VALUATION MODELS
This chapter emphasizes on Fundamental Analysis, but Technical analysis is fairly
popular in practice also.
Fundamental Analysis measures stock value by one or more of the following: book value,
liquidation value, replac
CH. 16 MANAGING BOND PORTFOLIOS
Interest Rate Risk of Bonds: Bond prices would change with changes in interest rates. However, different
bonds have different sensitivity to interest rate changes. In particular, long-term and low-coupon bonds are
more sens
CH. 15 The Term Structure of Interest Rates
The term structure of interest rates refers to the relationship between maturity and interest
rates. A graph describing the relationship is called a yield curve. Historically, long-term
rates are often higher th
CH. 14 BOND PRICES AND YIELDS
Some Terminology: Coupon rate (stated rate) vs. Investors' required rate (market rate).
Par value (Face value) vs. Market value. The market value often is different from the face
value. Specifically, if the coupon rate is mor
CH. 12 BEHAVIORAL FINANCE
Behavioral Finance: The premise of behavioral finance is that conventional finance
theory ignores how real people make decisions and that people make a difference. One
implication is that investors do not always process informati
CH. 11 MARKET EFFICIENCY
An efficient market is a market where prices reflect information fully and quickly,
implying that it is difficult to best the market unless one has superior information. Prices
fluctuate randomly in an efficient market, and it is