1. HFT 4464 Final Exam Review

2. Final Exam is Cumulative Chapter 1 through Chapter 10 Chapter 1 through Chapter 10 50 Multiple Choice Questions 50 Multiple Choice Questions –Vocabulary oriented (16) –Problems (34)

3. Vocabulary Advantages/disadvantages of a corporation Advantages/disadvantages of a corporation Three factors that determine value of future dividends Three factors that determine value of future dividends Bond ratings Bond ratings Stock trading – Primary / Secondary market Stock trading – Primary / Secondary market Debenture Debenture Common stock features Common stock features

4. Vocabulary Correlation of coefficient Correlation of coefficient Diversification Diversification How to read a bond quotation How to read a bond quotation Issuance costs Issuance costs Mortgage bonds Mortgage bonds Debentures Debentures –Senior, junior, subordinated, unsubordinated Which have seniority Which have seniority –Bonds –Preferred stock –Common stock

5. Calculations Holding period return Holding period return Bond market value / yield to maturity Bond market value / yield to maturity Weighted average cost of capital Weighted average cost of capital Present / future values – lump sum & annuity Present / future values – lump sum & annuity Net cash flow on sold asset Net cash flow on sold asset Stock value based on dividend growth rates Stock value based on dividend growth rates

6. Calculations Payback period Payback period Discounted payback Discounted payback Net Present Value Net Present Value Profitability index Profitability index IRR IRR Ratios Ratios –ADR –REVPAR

7. Chapter 5 Time value of money Time value of money –Future value of a lump sum investment Table p. 91 Table p. 91 –Present value of a lump sum payment Table p. 93 Table p. 93 –Future value of a series of payments made Table p. 96 Table p. 96 –Present value of a series of payments received Table p. 102 Table p. 102

8. Chapter 6 Yield to maturity of a bond (calculation) Yield to maturity of a bond (calculation) Value of preferred stock Value of preferred stock –V = D/I –Other formats

9. Chapter 6 Bond Market Rate vs. Coupon Rate Bond Market Rate vs. Coupon Rate –Market Rate > Coupon Rate Bond Value is ? Par value Bond Value is ? Par value –Market Rate = Coupon Rate Bond Value is ? Par Value Bond Value is ? Par Value –Market Rate < Coupon Rate Bond Value is ? Par Value Bond Value is ? Par Value

10. Chapter 8 Cost of Capital Cost of Capital –Cost of debt –Cost of preferred stock –Cost of external equity –Weighted Average Cost of Capital

11. Chapter 9 Capital Budgeting Capital Budgeting Calculate Net Cash Flows for a project Calculate Net Cash Flows for a project

12. Chapter 10 Capital Budgeting Capital Budgeting –Payback period –Discounted payback period –Net present value –Profitability index –Internal rate of return

13. No need to review: Standard deviation Standard deviation Variance Variance Beta Beta MIRR MIRR Ratios other than REVPAR & ADR Ratios other than REVPAR & ADR

14. Best Resources to Study Quizzes Quizzes Previous Exams Previous Exams Chapter Power point Slides Chapter Power point Slides Chapter worksheets Chapter worksheets

15. Summary Scantron required !!! Scantron required !!! Bring a calculator !!! (And maybe a spare?) Bring a calculator !!! (And maybe a spare?) Pencils Pencils Tables will be provided Tables will be provided Scratch paper provided Scratch paper provided Exam time: Exam time: –Tuesday 12/10/13 at 4:00 pm to 6:50 pm