Fin 470 - Study guides, Class notes & Summaries

FIN 470 Exam #1 Practice Questions and Answers What entities in the Federal Reserve System Set the Discount Rate? - Ans:-The directors of the 12 district banks set the discount rate and decide which banks can obtain discount loans. What entities in the Federal Reserve System Set the Reserve Requirement? - Ans:-The 7 member Board of Governors (who are elected by the president) set the reserve requirement. What entities in the Federal Reserve System Conduct Open Market Operations? - Ans:-The...

FIn 470 - Midterm 1 Exam Questions and Answers Risk - Ans:-numerical measure about the future payoff to an investment assessed over some time horizon Risk vs uncertainty - Ans:-risk can be quantified (measured) uncertainty can not 5 characteristics of Risk - Ans:-1. risk can be quantified - the riskier an investment the less desirable and the lower the price 2. risk arises because the future outcomes are unknown - we do not know which of many possible outcomes will follow in the future ...

FIN 470 Exam 3 Questions and Answers Premium - Ans:-A specific sum of money paid by the insured to the insurance company in exchange for financial protection against loss. 7 basic principles all insurance companies are subject to - Ans:-1.There must be a relationship between the insured and the beneficiary. Further, the beneficiary must be someone who would suffer if it weren't for the insurance. 2.The insured must provide full and accurate information to the insurance company. 3.The i...

FIN 470 Final Exam Practice Questions and Answers As a financial analyst, you are tasked with evaluating a capital-budgeting project. You were instructed to use the IRR method, and you need to determine an appropriate hurdle rate. The risk-free rate is 4%, and the expected market rate of return is 11%. Your company has a beta of 0.75, and the project that you are evaluating is considered to have risk equal to the average project that the company has accepted in the past. According to CAPM,...

FIN-470 Final Project Component 3 - Personal Reflection Updated 2024/2025 with complete solution FIN-470 Final Project Component 3

FIN 470 Final Exam Study Guide Solutions Investment Bankers - Ans:-Specialize in helping companies raise capital by selling securities Land, machines, and knowledge - Ans:-Are real assets Secondary - Ans:-Investors trade previously issued securities in the ________ market(s) Agency Problem - Ans:-The ____________ refers to the potential conflict between management and shareholders TED Spread - Ans:-The spread between the LIBOR and the Treasury-bill rate is called the Glass-Stegall - Ans:...

Fin 470 exam 1 Study Guide Solutions derivative - Ans:-an instrument whose value depends on the values of other more basic underlying variables hedge risks - Ans:-change nature of a liability speculate - Ans:-make bet on future direction of market arbitrage - Ans:-lock in arbitrage profits trading derivatives - Ans:-large volume accompanied by increasing volatility in underlying commodities swap execution facilities - Ans:-venue to host many trades, similar to exchange central counter-p...

FIN 470: Exam I Review Study Guide Solutions Net Present Value (NPV) - Ans:-Represents the amount by which firm value changes with acceptance of the project Problems with NPV - Ans:-Managers and investors are accustomed to, and have a preference for, measuring the expected return of an investment in percentage terms Internal Rate of Return (IRR) - Ans:-The rate of return that equates the present value of the project's net cash flows with the project's net initial investment Problem...

FIN 470 (Dr. Miller)- Exam 1 Study Guide Solutions Liquidity - Ans:-the ease with which an asset can be converted into cash 3 functions of money - Ans:-medium of exchange, unit of account, store of value Nominal GDP - Ans:-GDP measured in current prices Real GDP - Ans:-GDP measured in base year prices Paache index - Ans:-Nominal/Real GDP Laspreyes index - Ans:-P1Q0/Nominal GDP in Base Year cyclical unemployment - Ans:-unemployment caused by a recession structural unemployment - Ans:-une...

how do you reduce risk - Answers-diversification what are ways to hedge risk? - Answers-Insurance forwards/futures options option prices swaps Risk - Answers-the possibility of loss or injury What is different about the finance view of risk? - Answers-its more than loss/injury it is a numerical measure about the future payoff to an investment assessed over some time horizon Who coined the term Uncertainty vs Risk - Answers-Frank Knight risk can be - Answers-quantified-proba...