- Consider the following information:

Portfolio Expected Return Standard Deviation

Risk-free 7% 0%

Market 11.0 25

Medallion 10.0 14

Calculate the Sharpe ratio for portfolio Medallion.

- You have a coupon bond paying semiannual interest.

The asking price is 117% of the par value ($1000). The last interest payment was made 30 days ago, and the coupon rate is 6.00%, what is the price of the bond?

```
A. $1174.95
B. $1180.93
C. $1219.65
D. $1204.52
```

- A bond with a 20-year maturity bond and a $1,000 par value makes semiannual coupon payments.

The coupon rate is 8.00%.

The price of the bond is 950$.

What is the bond equivalent yield to maturity?

- You purchase a call option for $6.10.

The exercise price of that call option = $56.00.

At what price will you break even on the call option purchase?

```
A. $60.10
B. $62.10
C. $49.90
D. $51.30
```

- A stock, JJYT, pays currently pays an annual dividend of $1.00 and is expected to grow at 20.00% for two years. After the first two years it will grow at 4.00% indefinitely.

The required return for JJYT is 8.50%.

Calculate the intrinsic value of the stock.

- GYT Inc. pays a dividend of $1.22/year.

It will grow indefinitely at 5.00%.

Based on the constant dividend discount growth model; $32.03 is the current value of GYT Inc shares. Calculate the required rate of return.

- A ZCB (zero-coupon bond) has a $1,000 face value and a maturity period of five years. It currently sells for $746.22. What is its yield to maturity? A. 6.28% B. 6.49% C. 7.01% D. 6.03%
- Consider the following table given some information about different scenarios; the return on two stocks for two particular market returns:

Market Return JH Stock TYIU Stock

8 % 3.8 % 5.0 %

20 32 15

What is the expected rate of return on TYIU stock if the either market return scenario is equally likely?

- There is an 8-year bond which has a yield of 9.00%.

The duration of the bond is 7.2 years.

The bond’s yield increases by 40 basis points.

What is the percentage change in the bond’s price?

```
A. -2.90%
B. -2.64%
C. -1.65%
D. -2.01%
```

- The standard deviation on the returns of stock GGHY is 28.00%,

The standard deviation of return on stock VBHJ is 23.00%.

The correlation coefficient between the two stocks is -.248.

Using this information; the covariance of returns on GGHY and VBHJ is:

- Next year, TKKP will earn $6.00 per share.

ROE or the return on equity = 15.00%.

TKKP plowback rate = 60.00% and the firm’s market cap rate = 10.00%.

Use the constant dividend growth model and calculate the price per share

of TKKP.

```
A. $336.00
B. $310.00
C. $240.00
D. $191.00
```

The contains data on market advances and declines (number of stocks that have gone up in price and number that have gone down in price).

Market Advances and Declines

Day Advances Declines

(in millions) (in millions)

- 918 704
- 701 1,013
- 727 801
- 509 980
- 509 1,098
- 973 708
- 1,017 622
- 915 731
- 862 752
- 778 778

Calculate the cumulative breadth of the market at day 7.

A. 591

B. 580

C. 572

D. 513

- Using the CAPM apparatus and the given information regarding a stock:

The expected return on the market is 13.00%.

The expected return on a stock is 16.00%.

Beta=1.5

What is the risk-free rate?

- A stock has an expected return of 5.00%.

What is its beta?

Assume the risk-free rate is 7.00%.

The expected rate of return on the market is 15%.

- AAPX has a current market value of $41.00/share.

Earnings are $3.64/share, and the required rate of return is 9.00%.

Calculate the Present value of Growth opportunities (PVGO).

- Using the CAPM apparatus and the given information regarding a stock:

The risk-free rate is 8.00%

The expected return on the market is 18.00%.

Beta=1.7

Calculate the stock’s expected return.

- VHHY will pay an annual dividend of $4.00.

After the first year, the dividends will continue to increase at a constant rate of 4.00%.

The risk-free rate=4.00%.

Expected return on the market portfolio=12.00%.

VHHY beta=0.75.

What is the market capitalization rate?

```
A. 10.00%
B. 9.50%
C. 8.13%
D. 14.90%
```

- You are analyzing three bonds: A, B, and C.

Bond A is callable at $105. Bond B is callable at $110. Bond C is callable at $115.

Which bond values the call provision more – all else equal?

```
A. Bond A
B. Bond B
C. Bond C
D. Not enough information to determine.
```

- You have some information on two companies: Company BVH TX inc.

Forecast return 12% 11%

Standard deviation of returns. 12% 14%

Beta 1.6 1.0

You also know that the T-bill rate is 4.80% and the market risk premium is 5.90%.

What would the return for BVH be; using the capital asset pricing model (CAPM)?

Type solution as a percentage (e.g. .01 write as 1) Do not add units.

- In a strongly efficient market, portfolio management can provide the following benefits except: A. Diversification. B. Targeted risk levels. C. Low-cost record keeping. D. Superior risk-returns.
- What is the expected rate of return for a stock that has a beta of <1 if the expected return on the market is 14%?

Write out one of the following exactly as displayed: “less than 14%”

```
“more than 14%”
“exactly 14%”
“Cannot be determined without the risk-free"
```

- The standard deviation of return on stock FNG is 22.00%,

The standard deviation of return on stock BKKL is 17.00%.

If the covariance of returns on FNG and BKKL is .007, then correlation coefficient between the returns on FNG and BKKL is:

- There is a risky portfolio composed of two stocks: JJH and VMN.

Stock JJH has an expected return of 18.00% and a standard deviation of return 34.00%.

Stock VMN has an expected return of 13.00% and a standard deviation of return 19.00%.

The correlation coefficient the two stocks (in terms of their return histories) is .5.

The risk-free rate of return is 9.00%.

The proportion of the optimal risky portfolio that should be invested in stock VMN is approximately:

Use decimal format (e.g. 20% write as .20)

- The market cap rate for TLLM is 8.00%.

Expected ROE (return on equity) =10.00%.

Expected EPS (earnings per share) =$5.00.

Plowback rate=60.00%.

Calculate the price to earnings ratio of TLLM.

- Calculate the beta of a portfolio with an expected return of 16.70%.

If the risk-free rate is equal to 5.00% and the expected market return is 14.00%.

- If the efficient market hypothesis is accurate and reflects reality? A. The prices reflect all information available B. Prices do not fluctuate C. Security prices change for no reason D. Security prices can be forecasted
- A portfolio is contains two stocks:

X and YT.

Stock X has a standard deviation of 24.00%: based on returns.

Stock YT has a standard deviation of return of 18.00%: based on returns.

Stock X is 60% of the portfolio, and stock YT carries the rest.

If the return variance of the portfolio is .041, then the

correlation coefficient between the returns on X and YT is:

- CCVH has an EBIT (earnings before interest/taxes) of $300.00.

CCVH has a tax rate of 21.00%,

Depreciation=$20.00.

Capital expenditures=$60.00

The planned increase in working capital is $30.00.

Calculate the FFCF (free cash flow to the firm).

```
A. $128.00
B. $167.00
C. $202.00
D. $315.00
```

- YYHJ has free cash flow to the firm=$205M.

YYHJ’s interest expense=$22M.

Tax rate is 35.00%

Net debt of the firm changes by +$3M.

Calculate the market value of equity if free cash flow to equity is grows at 3.00%

indefinitely.

Cost of equity=12.00%

```
A. $2,423.87M
B. $2,839.09M
C. $3,417.57M
D. $2,152.22M
```

- A bond has a market price of $1,150.00.

The yield to maturity is 5.00%.

The yield increases by 10 basis points and the price of the bond falls by $20.00.

Calculate the duration of the bond.

```
A. 21.34
B. 18.26
C. 13.60
D. 14.92
```

Sample Solution

The United States is home to probably the most infamous and productive chronic executioners ever. Names, for example, Ted Bundy, Gary Ridgeway, and the Zodiac Killer have become easily recognized names because of the awful idea of their wrongdoings. Perhaps the most productive chronic executioners in American history is John Wayne Gacy. Nicknamed the Killer Clown in light of his calling, Gacy assaulted and killed at any rate 33 adolescent young men and young fellows somewhere in the range of 1972 and 1978, which is one of the most noteworthy realized casualty tallies. Gacy's story has become so notable that his violations have been included in mainstream society and TV shows, for example, American Horror Story: Hotel and Criminal Minds. Legal science has, and proceeds to, assume a significant part in the settling of the case and ID of the people in question. John Wayne Gacy's set of experiences of sexual and psychological mistreatment was instrumental in provoking specialist's curiosity of him as a suspect. John Wayne Gacy was brought into the world on March 17, 1942, in Chicago, Illinois. Being the solitary child out of three kids, Gacy had a stressed relationship with his dad, who drank intensely and was regularly damaging towards the whole family (Sullivan and Maiken 48). In 1949, a project worker, who was a family companion, would stroke Gacy during rides in his truck; be that as it may, Gacy never uncovered these experiences to his folks because of a paranoid fear of revenge from his dad (Foreman 54). His dad's mental maltreatment proceeded into his young grown-up years, and Gacy moved to Las Vegas where he worked momentarily in the rescue vehicle administration prior to turning into a funeral home orderly (Sullivan and Maiken 50). As a funeral home orderly, Gacy was vigorously associated with the treating cycle and conceded that one night, he moved into the casket of a perished high school kid and stroked the body (Cahill and Ewing 46). Stunned at himself, Gacy re-visitations of Chicago to live with his family and graduates from Northwestern Business College in 1963, and acknowledges an administration student position with Nunn-Bush Shoe Company. In 1964, Gacy is moved to Springfield and meets his future spouse, Marlynn Myers. In Springfield, Gacy has his subsequent gay experience when a collaborator shakily performed oral sex on him (London 11:7). Gacy moves to Waterloo, Iowa, and starts a family with Myers. Nonetheless, after consistently undermining his significant other with whores, Gacy submits his previously known rape in 1967 upon Donald Vorhees. In the coming months, Gacy explicitly mishandles a few different adolescents and is captured and accused of oral homosexuality (Sullivan and Maiken 60). On December 3, 1968, Gacy is indicted and condemned to ten years at the Anamosa State Penitentiary. Gacy turns into a model detainee at Anamosa and is allowed parole in June of 1970, an only a short time after his condemning. He had to migrate to Chicago and live with his mom and notice a 10:00PM time limit. Not exactly a year later, Gacy is accused again of explicitly attacking an adolescent kid yet the young didn't show up in court, so the charges were dropped. Gacy was known by numerous individuals locally to be a devoted volunteer and being dynamic in local area legislative issues. His part as "Pogo the Clown" the comedian started in 1975 when Gacy joined a nearby "Carefree Joker" jokester club that consistently performed at raising support occasions. On January 3, 1972, Gacy submits his first homicide of Timothy McCoy, a 16-year old kid venturing out from Michigan to Omaha. Guaranteeing that McCoy went into his room employing a kitchen blade, Gacy gets into an actual squabble with McCoy prior to cutting him over and again in the chest. Subsequent to understanding that McCoy had absentmindedly strolled into the stay with the blade while attempting to get ready breakfast, Gacy covers the body in his unfinished plumbing space. Gacy conceded in the meetings following his capture that slaughtering McCoy gave him a "mind-desensitizing climax", expressing that this homicide was the point at which he "understood passing was a definitive rush" (Cahill and Ewing 349). Right around 2 years after the fact, Gacy submits his second homicide of a unidentified teen. Gacy choked the kid prior to stuffing the body in his wardrobe prior to covering him (Cahill 349). In 1975, Gacy's business was developing rapidly and his hunger for young fellows developed with it. Gacy frequently baited youngsters under his work to his home, persuading them to place themselves in cuffs, and assaulting and tormenting them prior to choking them (Cahill 169-170). The greater part of Gacy's killings occurred somewhere in the range of 1976 and 1978, the first of this time occurring in April 1976. A large number of the adolescents that were killed during this time were covered in an unfinished plumbing space under Gacy's home. For the rest of the homicides, Gacy confessed to losing five bodies the I-55 scaffold into the Des Plaines River; notwithstanding, just four of the bodies were ever recuperated (Linedecker 152). In December 1978, Gacy meets Robert Jerome Piest, a 15-year old kid working at a drug store and offers him a work at Gacy's firm. Piest advises his mom regarding this and neglects to restore that night. The Piest family documents a missing individual's report and the drug specialist educates police that Gacy would undoubtedly be the man that Jerome addressed about a work. When addressed by the police, Gacy denied any inclusion in Piest's vanishing. Nonetheless, the police were not persuaded, and Gacy's set of experiences of sexual maltreatment and battery incited the police to look through his home. Among the things found at Gacy's home were a 1975 secondary school class ring with the initials J.A.S., numerous driver's licenses, binds, apparel that was excessively little for Gacy, and a receipt for the drug store that Piest had worked at. Throughout the span of the following not many days, specialists got various calls and tips about Gacy's rapes and the baffling vanishings of Gacy's representatives. The class ring was in the long run followed back to John A. Szyc, one of Gacy's casualties in 1977. Futhermore, after looking at Gacy's vehicle, agents found a little bunch of strands taking after human hair, which were shipped off the labs for additional examination. That very night, search canines were utilized to identify any hint of Piest in Gacy's vehicle, and one of the canines demonstrated that Piest had, truth be told, been available in the vehicle. On December 20, 1977, under the pressure of consistent police observation and examination, Gacy admits to more than 30 killings and educates his legal advisor and companion where the bodies were covered, both in the unfinished plumbing space and the stream. 26 casualties were found in the unfinished plumbing space and 4 in the waterway. Gacy is captured, indicted for 33 homicides, and condemned to death by deadly infusion. He endeavored a madness request yet was denied, and was executed on May 10, 1994. There were a few scientific pointers that agents used to attach Gacy to the killings. A portion of these include fiber investigation, dental and radiology records, utilizing the deterioration cycle of the human body, and facial recreation in distinguishing the people in question. Examiners discovered strands that looked like human hair in both Gacy's vehicle and close to the unfinished plumbing space where the bodies were covered. Notwithstanding these hair tests, agents likewise discovered strands that contained hints of Gacy's blood and semen in a similar territory. Blood having a place with the casualties was found on a portion of the filaments, which would later straightforwardly attach Gacy to the violations. The filaments in Gacy's vehicle were dissected by measurable researchers and coordinated Piest's hair tests. Besides, the pursuit canines that confirmed that Piest had been in Gacy's vehicle demonstrated this by a "demise response", which told agents that Piest's dead body had been within Gacy's vehicle. Out of Gacy's 33 known casualties, just 25 were ever indisputably distinguished. A significant number of Gacy's casualties had comparative actual portrayals and were consequently difficult to distinguish by simply asking people in general. To recognize the people in question, agents went to Betty Pat Gatliff, a pioneer in criminological science and facial recreation. Facial remaking is the way toward reproducing the facial highlights of a person by utilizing their remaining parts. Certain facial highlights, for example, facial structures, nasal design, and generally face shape can be helpful in distinguishing a casualty even long in the afterlife. By utilizing these highlights, and with the assistance of program, scientific specialists can make a picture of an individual's face, which is instrumental in recognizing casualties after their bodies have rotted. Facial recreation should be possible in a few measurements. Two-dimensional facial recreations is utilized with skull radiographs and depend on pre-demise photos and data. Notwithstanding, this isn't really ideal in light of the fact that cranial highlights are not generally noticeable or at the correct scale (Downing). To get a reasonable and more exact portrayal of the casualty's face, a craftsman and a measurable anthropologist are typically essential (Downing). Three-dimensional facial reproduction is finished by figures or high goal, three-dimensional pictures. PC programs can make facial reproductions by controlling examined photos of the remaining parts and use approximations to reproduce facial highlights. These will in general create results that don't look fake (Reichs and Craig 491). Some of the time, agents will utilize a strategy called superimposition as a method for facial recreation. Sadly, it's anything but an ordinarily utilized technique, as it expects agents to have some information about the personality of the remaining parts they are managing. By superimposing a photo of a person over the skeletal remaining parts, examiners can check whether the facial highlights line up with the anatomical highlights, permitting them to recognize a casualty. On account of John Wayne Gacy's casualties, specialists had the option to utilize facial reproduction to distinguish nine of the bodies found in the unfinished plumbing space. The accompanying realistic shows the facial reproductions of these nine casualties: Since facial reproduction was sufficiently not to distinguish the entirety of the v>

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