FIN 301 Class Web Page, Fall '13

Instructor: Maggie Foley

Jacksonville University


The Syllabus (section 01 as an example)

Reference website: (has excel functions and sample questions, but harder than this course)



Weekly SCHEDULE, LINKS, FILES and Questions


Coverage, HW, Supplements

-        Required

WSJ Papers Reference

(Note: if you could not open the link, google the paper)


Videos (optional)

Week 1

Chapter 5 ppt


Chapter 5 in class exercise




Chapter 5 HW solution

Chapter 5 HW Solution excel



Credit card firms go with the ‘0”.


Your owe $5,000 to a credit card. This old card charges 18% of interest rate. There is a chance to transfer your debt to a new card with 0% interest rate for the first year and 8% of interest rate after that. But the transfer is going to cost you about 3% of the total balance. Is it a good offer?

Fall of Lehman Brother part i


Fall of Lehman Brother part ii


Fall of Lehman Brother part iii


Fall of Lehman Brother part iv


Fall of Lehman Brother part v


Fall of Lehman Brother part vi


How the stock market works


How the market works


(2) 9/2 – 9/6

Chapter 6 PPT

Chapter 6 in class exercise part i

Chapter 6 in class exercise part ii


Chapter 6 risk return portfolio correlation CAPM example (with portfolio return, correlation, and standard deviation)


1. Go to and look for AAPL (apple) in search window.

2. On the left panel, look for historical prices. Click it.

3. Change the date to incorporate a five year period and use the monthly price.

4. Download the worksheet with prices to Excel

5. Keep the date and the adj close column. Adj close is the closing price adjusted for dividend.

6. Calculate the monthly return. Return = (P2-P1)/P1.

7. Calculate the average of the monthly return and the standard deviation of the monthly return.

8. Calculate the risk return ratio which equals to standard deviation / return.

9. Repeat the above and get the monthly return for GE, WMT, GOOG, Exxon, and Ford.

10. Set up an equally weighted portfolio with two stocks, such as GOOG and WMT. Calculate the average return of this two stock portfolio.

Calculate the coefficient using CORREL function. Calculate portfolio’s return.

Rp= 50% * Return of GOOG + 50%*return of WMT.

σp2 = 50%2WMT2 + 50%2goog2+ 2*50%*50%*Correlation * σWMT*σgoog  (not required)

11. Repeat the above to calculate the correlation and return of the two stocks’ portfolio:


12. Compare the correlation and returns among the five portfolios.

13. conclude about how to pick stocks to reduce risk while maintaining the return (refer to the graph).

14. Calculate beta, using slope function in excel.

Beta of Apple = slope(apple return,  S&P500 return)

Diversify Your Portfolio With International Stocks

Have 'Alternative' Investments Lost Their Diversification Value?

A 'Bucket List' for Better Diversification


The New Rules for Diversification

Laugh And Learn About Personal Finance -


Funny Moneyman Credit Card Game Show



Prior Exam No answer chapter 5

Prior Exam with Answers Chapter 5


Prior Exam No answer chapter 6

Prior exam with answers Chapter 6 – detailed answers


Quiz One

Quiz Two

Quiz Three


Chapter 5 HW solution                         Chapter 5 HW solution excel

Chapter 6 HW solution                          Chapter 6HW solution excel


First Mid Term Part I – Chapter 5

Study Guide

Multiple Choice (12*2.5=30)

  1. Given the deposits and interest rate, calculate first year interest and second year interest.
  2. Calculate future value given the deposits and interest rate and number of years. 
  3. Pay off the debt on credit card. Calculate how long does it take to pay back your credit card debt?
  4. Given the next four year cash flows, calculate net future value.
  5. Given the next four year cash flows, calculate NPV.
  6. Calculate the rate using rate function
  7. Triple investment, how long does it take?
  8. Calculate effective annual rate (EAR)
  9. Calculate NPER
  10. Calculate mortgage payment
  11. Annuity due
  12. Annuity due


Short answer question (10*2=20) – Similar to on of the questions in the prior exams

Extra Credit (2*3=6 points)



First Mid Term Part II – Chapter Six

Study Guide

 Multiple Choices (2.5*15=37.5)

  1. Calculate expected return using sumproduct.
  2. Compare several investment choices based on returns and probability
  3. Calculate expected return using sumproduct.
  4. Calculate expected return using sumproduct.

5-10 CAPM and SML questions, such as slope, intercept, market return, risk free rate, etc.

11. Systematic risk vs. unsystematic risk

12.  Calculation of holding period return

13. Concept of diversification.

14. SML and CAPM concept question

15. Diversification, risk and return concept question

 Short Answer Question (12.5*1)
You plan to invest in stock X. Describe the necessary procedures for the estimation of the risk level of this stock. In other words, describe the necessary steps that you need to follow in order to find out the value of Beta of stock X (hint: we estimated Beta of Apple, GE, etc. in class. Just repeat the process).

 Extra Credit (5 points)

First Mid Term Exam Questions

First Mid Term Exam Answers


First Mid Term chapter 5 on Monday


First Mid Term chapter 6 on Wednesday

(5) 9/23-9/27

Chapter 2 PPT

Videos – Financial market and institutions

Capital Market vs. Money Market

University: Asset Classes

University: four markets


Mutual Fund, Retail Banking, Investment Banking, Venture Capital

University: management investment Co.

Retail banking

Venture Capital Explained

Understanding the role of a corporate and investment bank in financing the economy




Facebook above $40 for first time since IPO


Twitter's IPO Plan: Don't Do What Facebook Did


The Crooked E – The Unshredded Truth about Enron (2003)



Revenge of the Bridesmaids

Mysterious Island (PART 1) (2013,USA)

Mysterious island (part II) (2013)

(6) 9/30-10/4

IPO articles

Facebook IPO Timeline

Facebook IPO Story


Nasdaq IPO news (updated daily)


Interest Rate – Fishers’ Effect

1.      What is nominal rate?

2.      What is inflation?

3.      What is real rate?

Which rate is more important



Chapter 3 PPT

Chapter 3 In class exercise documents


All companies, foreign and domestic, are required to file registration statements, periodic reports, and other forms electronically through EDGAR.

EDGAR online



1.      Go to EDGAR online

2.      Search AAPL

3.      Search financial statement of AAPL in 2012, 2011, 2010, and 2009.





Chapter 3 HW questions (due next Monday)

Chapter 3 HW solution





(8) 10/14-10/18

Chapter 4 PPT

Chapter 4 how to master analyzing financial statement


Stock screening tools

We will focus on several ratios:

P/E (price per share/earning per share)

P/B (market price per share / book value per share)

PEG (PE ratio / growth rate. PEG<1, undervalued stock)

EPS (earning per share)

EPS growth (EPS growth rate)

ROA (Return on Asset = NI/TA)

ROE (return on equity = NI/TE)

Current ratio (liquidity measure. = CA/CL)

Quick ratio (liquidity measure. = (CA-Inventory)/CL)

Debt/Equity (Leverage measure. = TD/TE)

Gross margin (profit measure. = EBITDA/sales, or = Gross margin/sales)

Operating margin (profit measure. = EBIT/sales, or = operating income/sales)

Net profit margin (profit measure. = NI/sales)

Payout ratio (= dividend / NI, measures distribution to shareholders).



Calculate all ratios above of WalMart except PEG, EPS growth rate, using the most recent financial statement of WMT (due on Friday).




Prior mid term reference questions set one and set two

Prior Mid Term Reference  answers




The Billion Dollar Secret

The Zacks Rank Guide to Trading Success




(9) 10/21-10/25

Second Mid Term

(chapter 3, 4, one day exam on Monday)

Second Mid Term Exam Study Guide

Multiple Choice (20*4=80)

1.       What is the amount of the inventory, given other balance sheet information.

2.      What is the amount of the total equity, given other balance sheet information.

3.      What is the amount of tax paid, based on income statement.

4.      What is the retained earning, based on income statement.

5.      What is the changes in net working capital from 2008 to 2009?

6.      What was change in cash flow in investment

7.      What is the net change in cash flow in operation

8.      What is the net change in cash flow in financing

9.      Definition of use of cash and source of cash.

10.  How much is the tax rate, based on income statement.

11.  How much is the quick ratio?

12.  How much is the debt ratio?

13.  How much is the P/E ratio?

14.  What is the return on asset? 

15.   What is the total asset / tot

16.  asset equity ratio? 

17.  Definition of financial statement

18.  How much is operating income?

19.  How much is net income?

20.  How many shares of stock are outstanding, based on income statement.

21.  Balance sheet question.

Short Answer questions: (20 points)

Report the cash flow statement based on the financial statement 


Second Mid term Quesitons

Second Mid Term Answer




Chapter 7 Bond pricing (PPT)

Chapter 7 Study guide

How Bonds Work (video)


FINRA – Bond market information



Summary of bond pricing excel functions

To calculate bond price (annual coupon bond):

Price=abs(pv(yield to maturity, years left to maturity, coupon rate*1000, 1000)


To calculate yield to maturity (annual coupon bond)::

Yield to maturity = rate(years left to maturity, coupon rate *1000, -price, 1000)


To calculate bond price (semi-annual coupon bond):

Price=abs(pv(yield to maturity/2, years left to maturity*2, coupon rate*1000/2, 1000)


To calculate yield to maturity (semi-annual coupon bond):

Yield to maturity = rate(years left to maturity*2, coupon rate *1000/2, -price, 1000)*2


HW of bond pricing (due on next Wednesday):

Page 246, study problems 7-2,  7-4, 7-8, 7-12, 7-15, 7-16, 7-17, 7-19, 7-22










Ukraine's Troubles Hit Bonds

Two Fed Officials Stay Put on Bond Buys

Bond Yields Fall in U.S., U.K., Germany

 Goldman Revamping Bond-Trading Network






























Introduction to bond investing (video)













Treasury Bond Auction and Market information

(10) 10/28-11/1

Chapter 8 Stock Pricing


study guide


NYSE top gainers 10.31.2013





Carbo Ceramics Inc.




2.99 M

Silver Spring Networks Inc




2.29 M

NQ Mobile Inc




17.15 M

Circor International Inc.




0.47 M





60.24 M

Penn Virginia Corporation




7.67 M

Resolute Forest Products Inc




1.20 M

KapStone Paper And Packaging Corporation




1.10 M

Harman International Industries Inc.




3.03 M

International Rectifier




1.55 M

GrafTech International Ltd




9.78 M

Haverty Furniture Companies Inc.




0.00 M

Media General Inc.




0.43 M

Haverty Furniture Companies Inc.




0.32 M

US Silica Holdings Inc




2.34 M

World Wrestling Entertainment Inc.




0.75 M

Trinity Industries Inc.




3.31 M

Kemet Corporation




0.61 M

NYSE top decliners 10.31.2013





Avon Products Inc




34.91 M

International Shipholding




0.16 M

Bankrate Inc




4.98 M

Weight Watchers International




7.45 M

Boyd Gaming Corporation




15.22 M

HHGregg Incorporated




2.14 M

Desarrolladora Homex SAB de




0.57 M

Sony Corporation




11.27 M

EPL Oil & Gas Inc




1.53 M

Hyster-Yale Materials




0.21 M

Maxcom Telecomunicaciones




0.00 M

Oshkosh Corporation




4.17 M

Con-way Inc




2.65 M

Schawk Inc.




0.02 M

Novo Nordisk A/S




1.06 M

Harte-Hanks Inc.




0.47 M

Gray Television Inc.




0.00 M

Boston Beer Company Inc.




0.16 M

Endeavour Silver Corporation




2.13 M

Silver Wheaton Corporation




9.01 M


Stock market data on Wall Street

Today's Stock Market Activity

On market watch


How the stock market works 

How the market works

Stock Market Beginners Learn How to Trade Stock

Jim Cramer Tells You How to Trade Like a Professional


(11) 11/4-11/8

 Third Mid Term reference (Three sets) questions

Third Mid Term reference (Three sets) answer

Chapter 7 HW Solution Word File                                  

Excel File

Chapter 8 HW Solution Word File                                  

Excel File

(12) 11/11-11/15

Third Mid Term Exam Study Guide


Multiple Choices (22.5*4=90)


Issuer     Callable                   Coupon _rate     Maturity                 Moody Rating       Price       Yield

 GE                          Yes            5%                         07/15/2015          A                             95.38      _____


Use the above information to answer the following questions (1-7)


  1. What is callable bond?
  2. How much is the coupon?
  3. Bond ranking by Moody: Low or high ranking?
  4. Giving price, coupon rate, nper, calculate yield
  5. Giving price, coupon rate, nper, calculate current yield
  6. Given yield to maturity, coupon rate, nper, calculate price of bond.
  7. Given yield to maturity, coupon rate, nper, calculate price of bond.
  8. Zero coupon bond price calculation
  9. Treasury bill zero coupon bond price calculation (remember: Treasury bill’s maturity is less than one year but the method is the same as longer term bond)
  10. During bankruptcy, the order of claims of investment between bond holder and stockholder. 
  11. Dividend yield equation


Answer the questions 12-15 using the following information.

  1. Using CAPM to calculate stock return: risk free rate, market return, beta all are given.
  2. Using dividend growth model to calculate stock price.
  3. Future dividend calculation
  4. Future stock price calculation (hard one)
  5. Using dividend growth model to calculate returns


Questions 17-19 are based on the following information.

  1. Calculate the holding period return, given price and dividend
  2. How much is the capital gain yield, given price and dividend
  3. How much is the dividend yield, given price and dividend

20.  Understand how to pick undervalued stock using PEG ratio.


Short Answer (10*1=10)

Given bond price, yield, coupon rate and calculate years to maturity


Extra Credit (3 points) Uneven dividend given, calculate stock price


Third Mid Term Exam Questions

Third Mid Term Exam Answers



(13) 11/18-11/22

Chapter 9 PPT


Chapter 9 and 10 in class exercise


Chapter 10 PPT


ECB Time Line of Financial Crisis



The great Euro crisis 2012

(14) 11/25-11/29

Monday Chapter 10


Happy Holiday

(15) 12/2-12/6

Monday: Chapter 10

(Multi IRR Question ( CF0=-1600, CF1=10000, CF2=-11000, CF3=2000))


Prior exam questions

Prior exam answers


Wednesday: Review

Final Exam Study Guide


Multiple Choices (19*4.5=85.5)


1. Choose two mutually exclusive projects: rule, concept

2. Calculate NPV

3. Calculate payback period

4. Calculate IRR

5. Calculate profitable index

6. Two mutually exclusive projects. Calculate and choose one.

7. Two mutually exclusive projects. Calculate crossover rate.

8. Two mutually exclusive projects. Calculate and choose one.

9. Two mutually exclusive projects. Calculate and choose one.

10.  Find after tax cost of debt

11.  Find cost of equity

12.   What is weight of debt (hint: weight of debt = total debt / total asset)?

13.   What is weight of equity (hint: weight of equity = total equity / total asset)?

14.   What is WACC?

15. What is the after tax cost of debt if the tax rate is 40 percent? 
16.  What is the weight of debt? 
17.  What is the cost of equity? 

18. Concept of WACC

19. Concept of WACC

Short answer questions(14.5 points)

Understand npv profile and can draw the profile. What about two projects in the same profile?


Extra Credit (5 points)

Find both of the IRRs for the nonnormal cash flows.

Final Exam

Final Exam Answers


(16) 12/9-12/13

Comprehensive Final (optional)

Comprehensive Final Answers