Fight Finance

(a) 0.4368

(b) 0.4911

(c) 0.6331

(d) 0.6564

(e) 0.7348

(a) 17,435.74

(b) 1,438.92

(c) 1,414.49

(d) 1,200.00

(e) 666.67

(a) 0.0005

(b) 0.0006

(c) 0.1603

(d) 0.1738

(e) 0.1909

(a) 420.00

(b) 463.05

(c) 463.53

(d) 486.20

(e) 510.51

(a) Markets are weak-form efficient.

(b) Markets are semi-strong-form efficient.

(c) Past prices cannot be used to predict future prices.

(d) Past returns can be used to predict future returns.

(e) Stock prices reflect all publically available information.

(a) total required yield

(b) cost of capital

(c) discount rate

(d) opportunity cost of capital

(e) accounting rate of return

(a) Obligation to buy the underlying oil at $44 per barrel.

(b) Obligation to sell the underlying oil at $44 per barrel.

(c) Right to buy the underlying oil at $44 per barrel if she wants.

(d) Right to sell the underlying oil at $44 per barrel if she wants.

(e) Obligation to buy the underlying oil at $44 per barrel if her counter party chooses to sell it.

(a) Mr Blue would enjoy the gamble.

(b) Miss Red would be indifferent to gambling or not.

(c) Mrs Green would dislike the gamble.

(d) Mr Blue's certainty equivalent of the risky gamble is $70.71. This is more than his current wealth which is why he would like to gamble.

(e) Miss Red's certainty equivalent of the risky gamble is $50. This is the same as her current wealth which is why she is indifferent to gambling or not.

(a)##Red \sim \mathcal{N}(\mu, \sigma^2)##,   ##Green \sim \mathcal{N}(\mu, \sigma^2)##   and   ##Blue \sim \mathcal{N}(\mu, \sigma^2)##

(b) ##Red \sim \mathcal{N}(\mu, \sigma^2)##,   ##Green \sim \mathcal{N}(\mu, \sigma^2)##   and   ##Blue \sim \mathbf{ln} \mathcal{N}(\mu, \sigma^2)##

(c) ##Red \sim \mathcal{N}(\mu, \sigma^2)##,   ##Green \sim \mathbf{ln} \mathcal{N}(\mu, \sigma^2)##   and   ##Blue \sim \mathbf{ln} \mathcal{N}(\mu, \sigma^2)##

(d) ##Red \sim \mathbf{ln} \mathcal{N}(\mu, \sigma^2)##,   ##Green \sim \mathcal{N}(\mu, \sigma^2)##   and   ##Blue \sim \mathbf{ln} \mathcal{N}(\mu, \sigma^2)##

(e) ##Red \sim \mathbf{ln} \mathcal{N}(\mu, \sigma^2)##,   ##Green \sim \mathbf{ln} \mathcal{N}(\mu, \sigma^2)##   and   ##Blue \sim \mathbf{ln} \mathcal{N}(\mu, \sigma^2)##

(a) Pay straightaway then you only have to pay $99.

(b) Pay on the 10th day then you’ll be asked to pay the full $100.

(c) Pay on the 11th day then you’ll be asked to pay the full $100.

(d) Pay on the 30th day then you’ll be asked to pay the full $100.

(e) Pay on the 40th day then you’ll be asked to pay the full $100 and the business owner may be upset with you and might not give you credit next time.