UNIVERSITY OF TEXAS AT DALLAS SCHOOL OF MANAGEMENT FIN6310: INVESTMENT MANAGEMENT SOLUTIONS TO PROBLEM SET #1 PROF. ARZU OZOGUZ SPRING 2013 1. Calculate the value of the following two bonds. Assume that coupon payments are made semi-annually and that par value is $1‚000 for both bonds. Coupon rate Time to maturity Yield-to-maturity Bond A 5% 5 yrs 7.2% Bond B 5% 25 yrs 7.2% Recalculate the bonds’ values if the yield to maturity changes to 9.4%. Which bond is more sensitive to the changes in
Premium Bond
Introduction Over the past decade‚ medical costs have increased more rapidly than other consumer costs. Americans spent 2.5 trillion on health care in 2009 according to Medicare’s Office of the Actuary. That figure translates into approximately $8‚086 per person‚ or 17.6 percent of the nation’s gross domestic product (GDP).1 Health care costs more than tripled from 1990 to 20092 and are projected to rise to 19.6 percent of GDP in 2019.3 “The 4 percent increase from 2008 levels represented
Premium Consumer theory Preference
Business 9203 Section 2 MANAGING FINANCIAL RESOURCES QUIZ June 2011 STUDENT NUMBER _____________________________ You have a maximum of 80 minutes for the quiz. Please provide your answers on this paper in the spaces provided and hand in your paper at the end of the quiz. Only short precise answers are required and you can use point form. The weight given to each question is indicated at the end of the question. The total possible marks are 70. The quiz is open book and you may feel
Premium Debt Bond
26) with profits show that there is a clear positive financial effect of increasing tenure. Though both factors have a quite strong correlation with profits‚ the manager tenure seems to be a much stronger driver. However‚ considering the learning curve of the employees it seems reasonable to assume that the impact of tenure depends also on the tenure itself. In other words‚ employees would be increasing their contribution much more at the beginning of their careers than once that they acquired all
Premium Employment Pearson product-moment correlation coefficient Regression analysis
Chapter 1: Bond Prices‚ Discount Factors and Arbitrage 1. Use this list of Treasury bond prices as of January 15‚ 2013 (which should be taken as the current date for all the questions below except for question 7) to derive the discount factors for cash flows to be received in 0.5‚ 1‚ 1.5 and 2 years. Bond Price 6.0s of 7/15/13 102-15+ 5.0s of 1/15/14 103-7 3/4 8.0s of 7/15/14 107-24 4.0s of 1/15/15 100-23 1/2 Answer: (a) To find d(0.5) The equation from the 6.0s of 15 July
Premium Bond Forward contract Yield
TIGER AIRWAYS V/S SINGAPORE AIRLINES Tiger Airways and Singapore airlines are two leading airlines in the Singapore region and I would be analyzing the market strategies applied by these to attract the customers. The two parameter to be compared will be 1) Cost Vs Luxury C IC 1 IC 2 C O O S S T T ’ BB’>AA’ A’ A A BB’<AA’ A’
Premium Utility Economics Preference
a) (i) Average cost curve as plotted in excel. (ii) For optimal quantity‚ differentiate the trend-line equation and equate it to 0. 2*0.0492x-0.5549 = 0 x = 5.639228 (iii) Optimal quantity is greater than combined quantity of 5 units; hence cost synergies will be realized by economies of scale. Both target and acquirer firm move closer to optimum quantity‚ the merger will produce cost synergies. b) (i) Average cost curve as plotted in excel.
Premium Average cost Economics of production Economics
consumers (C1 ‚ C2 ‚ C3 ‚ C4 ) with the following utility functions: Consumer C1 C2 C3 C4 Utility Function u(x‚ y) = 3x + 2y 1 2 u(x‚ y) = x 3 y 3 u(x‚ y) = min(3x‚ y) u(x‚ y) = min(2x‚ 2y) On the appropriate graph below‚ draw each consumer’s indifferent curves through the following points: (2‚2)‚ (4‚4)‚ (6‚6) and (8‚8). C1 C2 10
Premium Utility Economics Preference
75 for metabolic rate‚ 0.25 for lifespan‚ and 1.25 for cerebral gray matter. 7. What is the respiratory quotient and what is the range of values observed? The ratio of CO2 expired to 02. Range of values is 0-250 ml 02/hr. 8. Now that non linear curve fitting methods can be easily accomplished by using standard personal computers‚ is there any compelling reason to transform equations so as to linearize the trends above? It helps because it smooths out the data instead of being all squished together
Premium Metabolism Energy Aerobic exercise
graph and AFC‚ AVC‚ ATC‚ and MC on another. c. At what point is average total cost minimized? At what point is average variable cost minimized? Chapter 6 Technical Question 3 Industry studies often suggest that firms may have long-run average cost curves that show some output range over which there are economics of scale and a wide range of output over which long-run average cost is constant;
Premium Average cost Economics Economics of production