Dr. P.V. Viswanath |
Courses / FIN 652 | ||
Assignments, Fall 2012 |
|||||||||||
See Course Outline for Deadlines
|
|||||||||||
Connect Problems from your textbook, Investments, by Bodie, Kane and Marcus, 9rd. edition, McGraw-Hill Irwin. :Details of these assignments can be found on the Course Outline and on the Syllabus (Assignments). You can go to http://connect.mcgraw-hill.com/class/p_viswanath_73178 to access the Connect website. Blackboard Discussion Boards
Excel Assignments: (You have to do these in Excel -- not in Word!)
Problem for October 11 (From Fall 1998)You have available to you, two mutual funds, whose returns have a correlation of 0.2. Here is some information on their return probability distributions:
In addition, you can also invest in a riskfree 1-year T-bill yielding 12%.
Financial Markets and InstitutionsAs explained in the slides, financial functions can be broadly divided into six categories:
Give the name of a specific financial intermediary (e.g. Bank of America or JP Morgan Chase or Visa or FICO (formerly Fair Isaac Corporation)) for each of the first five functions and write two or three sentences about each one, showing how it performs each of the functions. The Mortgage CrisisWrite a paragraph explaining the reasons why the 2008 mortgage crisis occurred. Try to make it as specific as possible. Stock Valuation ProjectCollect stock returns for a stock of your choice. For example, if you choose ANF ( Abercrombie & Fitch Co.), you can go to http://finance.yahoo.com/q/hp?s=ANF+Historical+Prices to get ANF stock prices; you will then need to convert these into returns. You can also get these data from Bloomberg or from Zacks. Go to http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html and download data on the Fama-French factors. Merge the two data sets. (If you want the matched data for ANF, you can find them here; if you want the matched data for NCR Corp. (NCR), you can find them here.)
Read this article for a broad overview of CAPM versus the 3-factor model; this article is much more useful for this assignment, but read it after you read the first one. Your answers should be submitted in a Word file, with a single Excel file containing your computations. Make sure that you use Excel formulae in the spreadsheets, so I can see where you got your answers from. Do not copy and paste values alone from your computations. Grading -- 10 points for execution, 5 points for expected return computation, 5 points for correlation analysis, 10 points for beta change analysis. Rubrics for grading:
The Value of Stock Markets: Group ProjectRead Muhammad Yunus, "Building Social Business" and evaluate the possiblity of a "Social Stock Market" as described on p. 168. How do you think such a stock market might work? (Materials available on Blackboard, Course Documents) What is the purpose of a regular stock exchange like the NYSE or the DAX? What is the purpose of the Social Stock Market (SSM)? Is it different? What do you buy when you buy a share of stock in a regular stock exchange? Is this different in a SSM? An SSM is more than a social network forum where people vote as to how nice an idea is. How would valuation work? What about voting rights? Why would somebody sell? Why would somebody buy? |
|||||||||||