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FIN 645 Midterm (UMUC)

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$70.99

FIN 645 Midterm (UMUC) QUESTION 1. Important Note: This question asks more or less a similar question that had already been asked and discussed in one of the homeworks. However, given this is an exam question I expect from you a very indepth analysis of the question and utilizing practically whatever you have learned so far in this class about the topic on hand; including and especially all the conceptual and quantitative materials covered in chapters 2 and 5 of Shefrin. Now to the question. According to Yahoo Finance Applied Materials, Inc.’s stock (AMAT) closed at $19.96 on June 23, 2015: http://finance.yahoo.com/q?s=AMAT&ql=1 . Discuss whether the above stock was efficiently priced at the time of closing on the stated date. For consistency in your analysis, use ONLY Yahoo Finance’s data and other given information for the said company available at the above URL. You can use any and all pieces of information and data from the above URL to build your case. Make sure your responses to this question include both quantitative as well as qualitative analysis. Note: Points will be taken off for responses that lack organization and order. Maximum pages: 3 pages, double-space, size 12. No page limit on your Excel calculations. Grade: 100 QUESTION 2. Part A. As a CFO-in-training, that is as one who is being trained for a future CFO job where taking FIN 645 is part of such training, and solely based on what you have seen up to this date, explain what you have learned in this course which could help you in your future job as a CFO. Explain in needed details. If you discuss specific lessons, strategies, tools, and or methods, cite the specific page(s) of your books as reference. Hint: First briefly outline what a typical CFO does and then answer the question as asked and to the best of your ability and knowledge at this point. (50/100 points for this part) Part B. As a securities trader, and based on what you have seen up to this date, explain what you have learned in this course which could help you in your trading strategies. Explain in needed details. If you discuss specific lessons, strategies, tools, and or methods, cite the specific page(s) of your books as reference. In your discussion, make sure to cover both market efficiency issues and relevant behavioral finance phenomena. Hint: Traders are mainly concerned about short and not long term. (50/100 points for this part) Note: Points will be taken off for responses that lack organization and order. Maximum pages: 3-4 pages, double-space, size 12. Not page limit on any supporting reference page, table, graph, or exhibit. Grade: 100 QUESTION 3. As you know by now, traditional finance theory defines and operationalizes risk in terms of standard deviation and beta. In this class, you have also learned that Asset Pricing models like CAPM which were built on concepts like beta along with Market Efficiency assumptions have not done well in the real world either. Answer the two following questions based on what you have learned in this class: A. Have behavioral economists been able to improve upon the notion of risk and or pricing models like beta and CAPM? Explain your response in needed details. B. Do we now have a better understanding or risk in the real world? Explain your response in needed details. Note: Points will be taken off for responses that lack organization and order. Maximum pages: 2 pages, double-space, size 12. Not page limit on any supporting reference page, table, graph, or exhibit. Grade: 50 END!

FIN 645 Midterm (UMUC)

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