Finance

at Maastricht University

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Can someone elaborate on dark pool? Don't really know that is.
does someone know the difference between CML and SML? or in particular about Q56 first sit 2017. Why is this answer wrong "The straight line that connects all possible combinations of expected return and std. dev for all possible portfolios consisting of the stock and the savings account is the CML" ?
The CML is the capital market line. It is the line that shows all possible combinations between the MARKET portfolio and risk-free assets like bonds or savings accounts. It has the highest sharp ration, implying that it gains the most excess return per unit of risk. However the SML (security market line) is the graphical representation of the CAPM, thus being a regression showing how much expected return a stock should get based on its sensitivity/beta.
thanks a lot!
Q&A: Any problems or questions while studying Finance? Don't worry, we got your back! Just post any of your questions in the finance course on Studydrive https://www.studydrive.net/courses/maastricht-university/finance/222 and our experienced tutors will help you! Much success with your exams Your Success Formula Team
Q20 of 2017 first sit?
This is a screenshot from the succes formula crash course, could anyone help me with the calculations?
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Thank you so much!
You are very welcome!
What about Q29,Q30,Q34?
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30.) The coupon bond pays a coupon of 5%, clearly lower than the yield to maturity of 10,4%. This implies that the bond is sold at discount. Cash inflows are coupon payments of 50 (take coupon rate * Face Value / # payments per year) and the Face Value We get 50 each year for 5 years, and 1000 at year 5, thus we can use the annuity formual for the 50$ each year: 50/0.104*(1-1/1.104^5)+1000/1.104^5 = 797.37 Closest to 750 ANSWER D
34.) To find the Stock price after the dividend drop to 1.50$, we need to find the cost of equity based on the prior years stock price and dividend payment: Use the dividend discount model for infinite growth ( dividend/(cost of equity - growth rate) 2,5/(X - 0.04) = 25 ---> X = 0.14 Thus, 1,5/(0,14 - 0,08) = 25$ ANSWER B
How do you calculate Q13,Q20 and Q25?
25.) Profitability Index = PV( cash inflow)/ PV (cash outflow) Thus PV( Cash inflow) --> 4000/0,15 * (1 - 1/1,15^4) = 11.419 PV(Cas outflow) --> 10.000 PI = 11.419/10.000 = 1.14 --> 14% is the profitability of the project over its initial investment ( 14% is the percentage change ) ANSWER A
13.) You need to apply the APR to EAR transformation, since the EAR incorporates the compounding effect. calculation: investment i. --> 20.000 * 1,07^5 = 28.051 investment ii. --> 20.000 * ((1+ 0,07/2)^2)^5 = 28.211 ---> EAR is calculated by taking (1 + APR/k)^k where k is the number of payments per anno investment iii. --> 20.000 * (e^0.07)^5 = 28.381 ---> for continuous interest we need to take e^interest rate ANSWER C
Anybody who knows how to calculate Q22 of the first sit of 2017 version U?
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Thank you so much!
You are so welcome!
Does anybody know how to calculate Q45 of the first sit of 2017? Thanks! :)
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thank you!
You´re welcome!
How do you calculate Q13 and Q18?
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18.) Here you need to know three formulas : the dividend yield, the capital gain and the total return. Further they tell us that the rental yield is calculated one on one like the dividend yield, so the rent of 150.000 is treated like a dividend. dividend yield = dividend/price in year 0 capital gain = (price in year 1 - price in year 0) / price in year 0 ---> just a percentage change calculation total return = dividend yield + capital gain Calculation: 150.000/2.000.000 = 0.075 (1.175.000 - 2-000-000) / 2.000.000 = -0.4125 0.075 -0.4125 = -0.3375 ANSWER A
But the answer is 28300€...
How do you calculate Q14 & Q17 of the first sit of 2017?
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No worries :) thats what we are here for!
Nice & keep it up ;)
Does someone know how to calculate Q45 of the first sit of 2017? I get 7% every time but its not right
For this exercise we need the WACC, to find the cost of debt. To remember, the WACC uses the firms financial distribution of debt and equity as weights for the cost of equity and cost of debt. Calculation: E/(E+D) * cost of equity + D/(E+D) * cost of debt * (1-tax rate) = Rwacc 280/(280+93) * 0.09 + 93/(280+93) * X * (1 - 0.6) = 0.073 Solve for X --> 93/(280 + 93) * X * 0.6 = 0,073 - 280/(280+93) *0.09 -----> 93/(280 + 93) * X * 0.6 = 0.00616 93/(280 + 93) * X = 0.00616 / 0,6 ----> 93/(280 + 93) * X = 0,0103 X = 0,0103 / 93/(280 + 93) -----> X= 0,041 cost of debt is around 4% ANSWER A
Does someone know how to calculate Q35 of the first sit of 2017? Thanks in advance ;)
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why don't you have to take 7/(1,12)^2 since its two years?
As explained above, the perpetuity that we use to derive at 7$, is discounting one year only! Thus we have 7$ share price in year 1 not year 2.
Could anyone explain why the awnser to Q43 is A and not C in the first sit of 2017?
The idea behind this question is to show you the effect of diversification. To understand it, you need to know that if stocks move together they will exhibit a positive correlation (if they move 1:1, thus identically they have a correlation of 1). If the stock have a high correlation, the effect of diversification will be very small, leading to almost no decrease in risk. Since the variance is used to measure risk (square root of variance is the volatility ---> risk), the variance will be very high for two a two stock portfolio with highly correlated stocks, since we do not diversify greatly. We can conclude: with more movement together comes high correlation and thus a bigger variance
Can someone explain me how to calculate Q24 of the first sit of 2017?
You start with -100, in year one you get +40 and in year 2 you get +50. so combined thats +90, you still need 10 to be fully re-paid. In year 3 your cash flow is 60 , 60/12 = 5 so you need two months to get the 10 in order to have your investment back. With the payback rule you do not need to take any kind of rate into account so the best anwser is 2.2 years.
For this exercise you need to find the time period it takes for the project to payback its initial investment. Thus we want to know how long it take to have our cash inflows being equal to our cash outflow of 100. Calculation: After year 1: 40 $ of cash inflow --> we still need 60 more to break even After year 2: 90 $ of cash inflow --> we still need 10 more Thus we need 10 more dollars from the total cash flows of year 3, to have paid back. This means we need only 10 out of 60 dollars. Considering that we will get 60 over a year, therefore 10 dollars every 2 months, we need to transform months into years: 2/12 (every 2 months 10 dollars, thus we only need 2 more month to break even) ---> simplify ---> 1/6----> 0,167 We can conclude: It takes 2 years and 2 months to pay back, which is the same as 2,167 years --> closest to 2,2 ANSWER D
Q38 Shouldn't it be 100$, otherwise B) is wrong?
Yes, the course coordinator admitted that it should have been $100 and counted all answers correct
anyone knows when the grades should be online?
max. 15 working days (as usual)
people doing the assignment do you know where to post it? I can't find the safe assign on the Student portal
He send an e-mail saying you must send it to the regular e-mail address
course coordinator just dropped an email about this
Is there a difference between the free cash flow method and the discounted free cash flow method or is it the same? they ask in the course assignment to use the free cash flow method to value a company and its stock price, which one should I use?
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ok thank you very much anonymous vigilante <3
FCF gives you the yearly cash flows. DCF is discounting them to a present value of the enterprise. Subtract the debt and add the cash to enterprise value, and you have the market value. Divide by shares outstanding gives you share price.
any complaints for the exam?
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agree on 16 but someone needs to file a complaint for all those 4
16 and 21 probably not....
concerning question 33, why should be the stock market be greater than the bond market ? Google tells me different
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I don't have a book btw so I don't know if its just a typo of yours
Which of the following statements related to bonds is false? C) Bond markets within a given country (corporate and government bonds together) are typically smaller ( should be bigger ) in size and volume than stock markets within that same country. so answer key seems false
Could someone show me the calculation for 55% question 38
In my eyes the question or answer was wrong. Given the face value of 1000$ and the coupon rate of 6% the coupon payment would be 60$ which then represents a return of (60/20)= 300%. The capital gain was ((25-20)/20)= 25% so together the total return would be 325%. If you‘d take instead of 1000$ one hundred dollar you‘d get to a total return of 55%. Hence, the question/ answer key is flawed
I think so as well, I don't know which retard is down voting this
Can someone explain to me in version F, question 38, why C isn't also a correct answer? I think there was a mistake in the question and the Face Value should be 100 but I'm not sure if I'm missing anything. Thanks!
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And we're supposed to say which option is false. So option C, which says that total return is 55% is also false, and thus a correct answer. So we have 2 correct options here, right?
Yes C should be a correct option as well because it is false
Can someone who went to the first-sit upload the exam (can not access studentportal)?
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Done!
Can you also upload the exam, please?
hey guys, how about creating a "International Business 2019" course thing on here that we could all join and use as a permanent, general question board?
Hi, this is Philipp from Studydrive. We will introduce groups next week and will open an "International Business 2019" group for you! So be patient for a few more days and good luck with your last exam ;)
For those who have the exam today, I ate a ton of beans yesterday night so sorry in advance.
i'm looking for the spreadsheet of exercise 6.3. I would be forever grateful
thanks man <3
are the guest lectures exam relevant?
no
The guest lecturer aren't, but the other ones are really good summaries to see what he wants you to know
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Why would 22 be D instead of B?
that is the exp return and not the variance :)
Does anybody have the calculation to question 19 from the trial exam?
Answer given by a tutor
Thanks ;)
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Can you provide us with the password so we can print it out? Because in paper form it's a lot more convenient than on the PC :)
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http://www.pdfunlock.com Takes 2 seconds to unblock it
How do you calculate the SD of q84) ?
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Many mistakes in the answer key, 10 is C for example, question 1 can be both a & d. There are probably even more mistakes.
Why is question 1 D and not A? / Why not both?
think for question 11 its also wrong
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What is the explanation question 22?
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the var formula
Seriously, don't use last year exams, there are tons of mistakes.... And senseless questions. Repeat the tutorials, the lectures and if you have Success Formula. But not last year, the answers aren't reliable.
in the trial exam why is question 27 C and not A? isnt the calculation just : riskfreeinterestrate+beta*(market return-riskfreerate)?
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0,04 + 0,9*(0,08) = 11,2 , risk premium is equal to (market return - risk free rate)
shit i missed that, thanks
Isn't it =~r-1 ?
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and finally, it's "r-i"
r-i is only an approximation.. the formula for real rates in the formula sheet is correct
Someone who can upload the answers of exercise 10.1?
What is an arbitrary risk portfolio?
Can anyone else not access the courses on MyUM?
Same problem
does someone have a solution for task 22, excercise 10.1?
NPV = 2988.87
do you have a photo or file of the whole solution maybe?
If anyone is interested, I made a Quizlet of almost everything dealt within the course, since 50% of the exam would be on terminologies. Just keep in mind I used my note rather than going through the book to make my life alittle easier, so there might be some very small inaccuracies. The things that I still have to include are chapter 12 and the guest lecture last week. Link: https://quizlet.com/_2yqlwb Edit 1. I have included everything now. I am not including the last week lecture as it isn't exam relevant.
What's the reasoning behind this answer?
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Sorry, but I don't understand where does the 2 as Beta come from ... So if someone could explain it please ?
Here you go
What about this 2?
Are we allowed to use the formula sheet during the exam (from studentportal), or do we have to memorize all them calculations?
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Our tutor also said it is only for us to study with at home, in the exam we have to know them..
Actually the full formula sheet posted on studentportal will be attached to the exam. So no you don't have to memorize the formulas, you only have to know how to use them.
Do you find the question pools representative?
I think it's helpful to understand some concepts
If you check the sample questions he gave us against the question pool - he took his questions from the question pool. So yeah quite representative
this should be 10/1.12=8.93 right?
dear zoe zwiebelman, can you please upload a document with all your summaries in one? thanks in advance.
Hahahahaha you so lazy. She makes the summaries for you?? Is it too hard for you to press Ctrl+A & Ctrl+P on your keyboard??? xDDD
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are you sure the covariance is correct in 7.1? because you took the weight average return of A and B for one period and not the product of the difference of the return from its weight average return for each firm
Anyone out here with the spreadsheet of exercise 6.3?
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What do you guys have for question 17) pg 7? I have got 0.059, I don't understand why they don't time it by 12
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