Fin421 - Study guides, Class notes & Summaries

Consider the following limit order book of a specialist in a market that allows partial execution of orders. The last trade in the stock took place at a price of $35. Bid Bid Qty Ask Qty Ask 34.75 100 800 35.25 34.25 100 1,000 35.50 33.50 400 2,000 35.75 32.25 200 800 36.00 You place a market sell order for 150 shares. What are your proceeds and what is the new stock price? A) $5; 187:50 ; $34:75 B) $5; 187:50 ; $34:25 C) $5; 325:00 ; $35:00 D) $5; 287:50 ; $35:25 E) $5; 287:50 ; $3...

Shares outstanding (St), stock prices (Pt), and Dividends (Dt+1) for assets A and B are given below. All dividends are paid out at the end of the year, 12/31/2017. Asset B performed a 1:2 inverse stock split at the beginning of the year, 01/01/2017, where two old shares were combined into one new share. What is the value weighted portfolio return? Date Asset A Asset B St Pt Dt St Pt Dt 12/31/2016 (t) 100 20 10 100 12/31/2017 (t+1) 100 22 2 5* 130 10 Asset B performed a 1:2 inverse stock ...

Shares outstanding (St), stock prices (Pt), and Dividends (Dt+1) for assets A and B are given below. All dividends are paid out at the end of the year, 12/31/2014. Asset B performed a 3:1 stock split at the beginning of the year, 01/01/2014. What is the value weighted portfolio return? Date Asset A Asset B St Pt Dt St Pt Dt 12/31/2013 (t) 100 20 10 100 12/31/2014 (t+1) 100 14 2 30* 50 3 Asset B performed a 3:1 stock split on 01/01/2014. A) -18.67% B) 6.33% C) 9.33% D) 24.00% E) None...

Lecture 6 Practice Questions 1. The variance of a portfolio of risky securities is . A) the sum of the securities’ covariances with the portfolio B) the sum of the securities’ variances C) the weighted sum of the securities’ covariances with the porfolio D) the weighted sum of the securities’ variances E) none of the above Answer: C 2. According to the capital asset pricing model, . A) all securities must lie on the capital market line B) all securities must lie on the security...

Midterm Exam FIN 421 Fall 2020 Name: Student ID: Section: 70853 (T/TH 1:30pm) 85577 (T/TH 3pm) Part I / 60 Part II / 40 Total / 100 • You have 80 minutes to complete this exam: 60 minutes for answering questions and 20 minutes for uploading solutions. • You are allowed to use a calculator. A formula sheet is provided on the last page. • You are to answer these questions without consulting anyone or anything besides the formula sheet, your calculator, and your own knowledg...

Practice Final Exam FIN 421 Spring 2016 Name: Student ID: Section: 10951 (T/Th) 10950 (T only) Part I / 40 Part II / 20 Part III / 40 Total / 100 • You have 110 minutes to complete this exam. • Only calculator and pen are allowed. A formula sheet is provided on the last pages. • You are to answer these questions without consulting anyone. • Show your work wherever necessary. • Manage your time wisely. Shorter answers are often better. Part I. Multiple Choice Questi...

Lecture 1: Financial Markets FIN 421 – Fall 2020 Professor Michael Barnett Outline 1 The finance industry 2 Types and characteristics of financial assets 3 Trading basics The Financial System Basic Functions of the Financial System Financial assets contribute indirectly to the productive capacity of the economy by providing: • Efficient allocation of funds. • Consumption timing (saving for retirement, college borrowing, buying a house) • ’Good ideas’ are able to attr...

Lecture 1: Financial Markets FIN 421 – Fall 2020 Professor Michael Barnett Outline 1 The finance industry 2 Types and characteristics of financial assets 3 Trading basics 2 / 30The Financial System 3 / 30Basic Functions of the Financial System Financial assets contribute indirectly to the productive capacity of the economy by providing: • Effcient allocation of funds. • Consumption timing (saving for retirement, college borrowing, buying a house) • ’Good ideas’ are able...

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