FINA 5210 Problem Set 1 (Group 305) Problem 1 (a) WpC=[E(rp)-rf] ÷Aσp2 =6%÷2.5×(20%)2 =60% WfC=100% - 60% = 40% (b) Expected return of Complete portfolio is: rCEc= WpC×E(rp)+ WfC×rf =60%×10% + 40%×4% =7.6% The standard deviation of Complete portfolio is: σc = WpC × σp = 60% × 20% = 12% Certainty-equivalent rate of return for investing in C: rc CE= Uc = rCEc- 1/2Aσc2 = 7.6% - 0.5×2.5×12%2 = 5.8% Certainty-equivalent rate of return for investing in P: rp CE= Up= rCEp- 1/2Aσp2
Premium Standard deviation Investment Normal distribution
Problem Set II Problem P9 17: Jack Hammer FV (Table 1) at 11% discount rate 2.00 x .901 = $1.80 2.20 x .802 = $1.79 2.40 x .731 = $1.75 33.00 x .731 = $24.12 -------- $29.46 Problem P9 - 22: Alternative Present Values: Your rich godfather has offered you a choice of one of the three following alternatives: $10‚000 now; $2‚000 a year for eight years; or $24‚000 at the end of eight years. Solution: (first alternative)
Premium Net present value Stock market Investment
Kenneth Smith 12/19/13 NT 1230 Unit 1 Problem Set 1 Page 25 1. The general public in the United States will be able to purchase all of the Windows 7 editions in retail stores except Basic‚ Enterprise‚ and Starter. 2. The core module that provides all of the Windows 7 capabilities that isn’t language or edition-specific is called Min Win module. 3. When you copy a file to a library‚ Windows Explorer writes the file to the folder designated as the Open and Save as
Free Windows 7 Windows Vista Microsoft Windows
FBE 421 Prof. Briggs Problem Set #1 Please print out this document and clearly handwrite your answers to each of the questions below in the space provided. Show all your work accordingly. A. Calculate LTM (a) Revenue and (b) Net Income for Costco Wholesale (COST) using their latest financial statements as of 3Q2011. 77946+60737-53821=84‚862 MM Revenue 1303+984-871= 1‚416 MM Net-income B. Calculate Costco’s LTM (a) EBIT and (b) EBITDA. 2077+1677-1389=2‚365 MM EBIT (2077+795)+(1677+582)-(1389+549)=
Premium Generally Accepted Accounting Principles Stock market Balance sheet
reuse; 3 inches passes through the root zone as deep percolation (total)‚ of which 3 inches are beneficial leaching for salt removal; and 1 inch is ET from weeds. What is the irrigation efficiency (%)? a. 92.9% b. 78.6% c. 57.1% d. 62.9% e. 71.4% 5. ET‚ or evapotranspiration‚ is best described by which of the following? a. The sum of evaporation during an irrigation and plant water use. b. The sum of plant transpiration and water evaporated from wet plant or soil surfaces. c. The sum of water
Premium Irrigation Water Aquifer
Week 5 – Assignment 1. Chapter 7 addresses organizational structures (how organizations group jobs and work functions into groups). For example‚ a hospital may have hundreds or thousands of employees while a private physician’s office may have just a few employees. For the organizations below‚ describe which organizational structure they would likely use and why: • A small physician’s office Smaller hospitals tend to have much simpler organizational structures. small business can use one
Premium Organizational structure Insurance Small business
Prof. Gustavo Indart Department of Economics University of Toronto ECO 100Y INTRODUCTION TO ECONOMICS Problem Set 1 1. Labour is the only resource in an economy with the following maximum production possibilities. (The graph is drawn as a curve rather than points under the assumption that opportunity cost is constant between options.) Option 1 2 3 4 a) b) c) d) e) f) Clothes (Tons) 50 40 20 0 Food (Tons) 0 30 70 100 What is the opportunity cost of increasing Clothes production from 20 to 40
Premium Economics
Econ 302 Name:_____________________ Fall 2014 Problem Set 1 (Thursday September 18‚ 2014 In class – no extensions) Please Print and Answer in the Provided Space 1) Consider the following estimates for an iPad sold in Canada in 2010: retail price $550 (say at Best Buy)‚ Apple (a U.S. corporation) wholesale price $475‚ Apple intermediate costs $385. Of Apple’s intermediate costs‚ $100 was wholly produced by U.S. manufacturers‚ and $285 from other foreign producers. Suppose the production chain was
Premium Inflation United States dollar Purchasing power parity
FIN515 Homework 5 Problem 10-8: NPVs‚ IRRs‚ and MIRRs for Independent Projects Edelman Engineering is considering including two pieces of equipment‚ a truck and an overhead pulley system‚ in this year’s capital budget. The projects are independent. The cash outlay for the truck is $17‚100 and that for the pulley system is $22‚430. The firm’s cost of capital is 14%. After-tax cash flows‚ including depreciation‚ are as follows: Year | Truck | Pulley | 1 | $5‚100 | $7‚500 | 2 | 5‚100 |
Premium Depreciation Generally Accepted Accounting Principles Net present value
MIT Sloan Finance Problems and Solutions Collection Finance Theory I Part 1 Andrew W. Lo and Jiang Wang Fall 2008 (For Course Use Only. All Rights Reserved.) Acknowledgements The problems in this collection are drawn from problem sets and exams used in Finance Theory I at Sloan over the years. They are created by many instructors of the course‚ including (but not limited to) Utpal Bhattacharya‚ Leonid Kogan‚ Gustavo Manso‚ Stew Myers‚ Anna Pavlova‚ Dimitri Vayanos and Jiang Wang. Contents 1
Premium Bond Bonds