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University of Macau Faculty of Business Administration MFIN604 – Theory of Finance
*** If you have any questions regarding grading, please contact Yang Yang. The other TA does not have your information. However, if you need help regarding course materials, you could contact any of us. All the e-mails to me or to your TA should start from FIN 3826 in the subject line or you will have the risk that they will not be read. For the privacy protection reason, we only correspond to e-mails from LSU system. Therefore, the e-mails from gmail, hotmail, and yahoo, etc, will not be read. Course Objectives and Outcomes To acquire an in-depth understanding of the major investment theories, which include capital market theory, portfolio theory, asset pricing models, options, and futures. To provide an understanding of the risk/return tradeoff that investors face, how risk can be reduced, what risk is important to investors, how risk is priced in financial markets, how derivative markets and instruments work, how derivative instruments are priced, and how derivatives can be used to reduce risk. To help you make more informed and, hopefully, more profitable investment decisions. To help you develop a theoretical foundation for future coursework in finance. Required Materials Required Text: Required Reading: Essentials of Investments, by Bodie, Kane and Marcus, 9th edition, Irwin/McGraw-Hill, 2012. The Wall Street Journal (WSJ)…
If you plotted the returns of Selleck & Company against those of the market and found that the slope of your line was negative, the CAPM would indicate that the required rate of return on Selleck’s stock should be less than the risk-free rate for a well-diversified investor, assuming that the observed relationship is expected to continue in the future.…
References: Coutts, A.J. (2011).Lecture on Capital Asset Pricing Model, Capital Market Investment and Finance Module, Second Year Undergraduate Course 2010/11,University Of Bradford School Of management,15/03/2011.…
Friend, Irwin; Westerfield, Randolph; Granito, Michael. New Evidence On The Capital Asset Pricing Model. Journal of Finance, June 1978, Vol. 33 Issue 3, p903-917, 15p.…
Joanna began her calculation of Nike’s WACC by finding the necessary weights of debt and equity to be used. To begin, Joanna found Nike’s debt by combining the book values of current long-term debt, notes payable, and long-term debt, which were all found on Nike’s balance sheet. The values were $5.4 million, $855.3 million, and $435.9 million respectively. This calculation gave Nike a total debt of $1,296.9 million. To find Nike’s equity, Joanna used the book value of total shareholders’ equity which was also found on the balance sheet. The value was $3,494.5 million. Therefore, Joanna found Nike’s debt plus equity to be $4,791.4 million. Dividing the values for debt and equity each by $4,791.4 million gave Joanna the weights to be used in the WACC formula. Debt was weighted as 27% and equity as 73%.…
Frino, F. 2013, Capital Asset Pricing Model (FINC5001), The University of Sydney, Sydney, 18 March, viewed 30 April 2013,…
• Ross, A.S., Westerfield, R.W., Jaffe, J.F., & Jordan, B.D (2008), “Modern Financial Management”, 8th ed. New York , USA: MacGraw Hill/Irwin.…
Part 1, Introduction to Managerial Finance, n/d. Retrieved from Part 1, Introduction to Managerial Finance, n/d, retrieved from http://wps.aw.com/wps/media/objects/222/227412/ebook/ch01/chapter01.pdf…
1. Both the capital asset pricing model and the arbitrage pricing theory rely on the proposition that a no-risk, no-wealth investment should earn, on average, no return. Explain why this should be the case, being sure to describe briefly the similarities and differences between CAPM and APT. Also, using either of these theories, explain how superior investment performance can be establish.…
Abstract We investigate hold-up with simultaneous and sequential investment. We show that if the encouragement effect of sequential complementary investments dominates the delay effect, sequential investment alleviates the underinvestment caused by the hold-up problem. Further, if it is allowed to choose when to invest, strategic delay occurs when the encouragement effect of sequential complementary investments dominates the delay effect. JEL classification: C70, D23 Keywords: Sequential Investment, Hold-up, Underinvestment, Strategic Delay…
Within finance, there are many types of financial models and theories. The Modern Portfolio Theory (MPT), Capital Asset Pricing Model (CAPM) and Arbitrage Pricing Theory (APT) are the quantitative models that form basis theories for modern finance. Back in the 1980s, researchers found that there were many anomalies in the finance markets that could not be explained. In 1990, a large number of high-quality theoretical and empirical literature research emerged on the study to apply behavior on the finance.…
An Effectiveness of Human Resource Management Practices on Employee Retention in Institute of Higher learning: - A Regression Analysis…
International Research Journal of Finance and Economics ISSN 1450-2887 Issue 25 (2009) © EuroJournals Publishing, Inc. 2009 http://www.eurojournals.com/finance.htm…
International Research Journal of Finance and Economics ISSN 1450-2887 Issue 39 (2010) © EuroJournals Publishing, Inc. 2010 http://www.eurojournals.com/finance.htm…
International Research Journal of Finance and Economics ISSN 1450-2887 Issue 52 (2010) © EuroJournals Publishing, Inc. 2010 http://www.eurojournals.com/finance.htm…