Dr. P.V. Viswanath
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# MBA 632: Managerial Finance

Q. What do I have to study for the Midterm?
A. Chapters 2, 3 and 4.

One, definitions from chapters 1, 2, 3, 6 (I am not going to ask definition questions on Chapter 7).
Two, critical thinking questions from chapters 1, 2, 3, 6 (I am not going to ask critical thinking questions on Chapter 7)
Three: problems similar to end-of-chapter problems from chapters 3 (problems 26-43), 5 (problems 29-56), 6 (problems 1-14, 15, 16, 17, 18, 21) and 7 (problems 13-18 and 20).

Q. What will the format of the midterm be?
A. One media article with questions related to chapters 2, 3 or 4. There will be quantitative questions from chapters 3 and 4. Finally, there will be short questions from all three chapters.

Give us a sample midterm.
A. Look at older exams from MBA 664, as well as MBA 632.

Q. Are the exams open book or closed book?
Ans. The midterm and the final exams are closed book; however, you can bring in one 8.5x11 sheet, which can contain only formulas. You may write on both sides of the paper.  However, you may not staple several sheets of paper together.  Going through your notes probably cannot make up for the lack of a proper understanding of the material.

The short quizzes are closed book; you may not bring in any sheets either.

A. Here's what the exam will be like:

Points Assignment Subject Matter
20% from the list of questions at http://webpage.pace.edu/pviswanath/class/632/notes/terms.html (the first set of questions under each topic -- not the quantitative and conceptual questions)
15% short-answer questions on Capital Structure, EMH and CAPM
20% A Media article with associated questions on one of the following topics -- Capital Markets, Stock Pricing, Bond Pricing and Forecasting Cashflows
45%

Approximately four quantitative questions from the following groups:

• Computing expected return, standard deviationn of return, variance of return
• Computing 95% confiidence intervals
• Using the FCF model to comppute the value of the equity of a firm.
• Computing stock price given some combination of information about dividends, ROE, reinvestment rates, etc.
• Problems exploiting the relationship between bond price, coupon rate and YTM.
• Problems testing your understandding of coupon bonds as portfolios of zero-coupon bonds.
• Computing WACC, computing betas for leveraged firms

Q. Can I do extra work to improve my grade?
Ans. Sorry. I believe that in order to be fair, I have to give every student the same opportunity to do extra work. Obviously, this is not feasible.  However, on occasion I will allow you to resubmit an assignment for grade improvement.

Q. What can I do to check my understanding of the material and to prepare for the exams?
Ans.

• You can do the problems from the end of each chapter. The answers can be found on the Web (see Blackboard).
• You can try to answer the questions at the end of media articles.
• You can read current newspaper and magazine articles on relevant topics and make up your own questions and articles.

Q. What do I have to study from each chapter?
Ans. In each chapter, you should know the definitions and the meanings of key terms, and be able to put them into context. You should also look at the end-of-chapter problems.