Math 369 Financial Mathematics II

(Applied Mathematics of Corporate Finance)


Fall 2006

Instructor Ė James G. Bridgeman

instructor's web site

syllabus for the course

grading worksheet including papers and finals

Opportunity Cost of Capital†††

The final exam will be open-book, open-notes, 40% material up to mid-term, 60% material after that.

Cumulative Assignments (thru 12-8)

Study pages 471 to 481 of the text

Study pages 452 to 470 and 481 to 490 of the text.

Study pages 430 to 444 of the text.Start thinking about how that material connects with our little late Wednesdays binomial model.

Study pages 444 to 448 of the text (mathematics behind 421 to 430).Bring in writing to hand in at class on 11-1 at least one question you donít understand about this material.(But make sure that your question illustrates something that you did understand!)

Study pages 413 to 430 of the text.Work out assignments given in class on Oct. 9 and Oct. 11.Hand in the Oct. 11 class assignment on Oct. 16.

Hand in: (a) If exactly three risky investments are available, find the portfolio with the smallest variance.Discuss the degenerate cases.(b) If in addition, a risk-free investment is available, find the optimum portfolio consisting of just the three risky investments. (c) Find the highest return available on a portfolio with the same variance as the portfolio in (a).Show all of your work.

Study Sections 2.8 thru 2.11 of the text and Appendices A and B of Chapter 2

Study Sections 2.1 thru 2.7 of the textbook

Study pages 506 thru 509 of the textbook

Study the financial analysis and planning handout

††††††††††† Do all the Quiz questions at the end, Practice questions 4, 6, 7, 8, and 10, and Challenge question 1.

††††††††††† Quiz answers are at the back, Practice and Challenge answers are here

Study Chapter 1 of the textbook