Essentials Of Investments Zvi Bodie Pdf To Word
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The market leading undergraduate investments textbook, Essentials of Investments by Bodie, Kane, and Marcus, emphasizes asset allocation while presenting the practical applications of investment theory. The authors have eliminated unnecessary mathematical detail and concentrate on the intuition and insights that will be useful to practitioners throughout their careers as new ideas and challenges emerge from the financial marketplace. The Tenth Edition includes increased attention to changes in market structure and trading technology, while continuing to be organized around one basic theme - that security markets are nearly efficient.
Sample questions asked in the 10th edition of Essentials of Investments:
Consider the following information regarding the performance of a money manager in a recent month. The table presents the actual return of each sector of the manager’s portfolio in column (1), the fraction of the portfolio allocated to each sector in column (2), the benchmark or neutral sector allocations in column (3), and the returns of sector indexes in column (4). a. What was the manager’s return in the month? What was her over- or underperformance? b. What was the contribution of security selection to relative performance? c. What was the contribution of asset allocation to relative performance? Confirm that the sum of selection and allocation contributions equals her total “excess” return relative to the bogey.
A common misconception is that investors can earn excess returns by investing in foreign bonds with higher interest rates than are available in the U.S. Interest rate parity implies that any such interest rate differentials will be offset by premiums or discounts in the forward or futures market for foreign currency. Interest rates on government bonds in the U.S., U.K., Japan, Germany, Brazil, and Australia can be found at www.bloomberg.com . (Look for the link to Markets, and then Rates + Bonds .) Spot exchange rates on international currencies can be found at www.bloomberg.com . (Look for the link to Markets, and then Currencies .) Forward exchange rates on currency futures contracts can be found at www.cmegroup.com . (Look for the link to Trading and then FX .) Select one of these countries and record the yield on a short-term government security from the Bloomberg website. Also make note of the U.S. Treasury yield on an instrument with the same maturity.
Both a call and a put currently are traded on stock XYZ; both have strike prices of $50 and maturities of six months. a. What will be the profit to an investor who buys the call for $4 in the following scenarios for stock prices in six months? ( i ) $40; ( ii ) $45; ( iii ) $50; ( iv ) $55; ( v ) $60. b. What will be the profit in each scenario to an investor who buys the put for $6?
The investment policy statement of an institution must be concerned with all of the following except : a. Its obligations to its clients. b. The level of the market. c. Legal regulations. d. Taxation.
Choose 10 firms that interest you and download their financial statements from finance.yahoo.com . a. For each firm, find the return on equity (ROE), the number of shares outstanding, the dividends per share, and the net income. Record them in a spreadsheet. b. Calculate the total amount of dividends paid (dividends per share × number of shares outstanding), the dividend payout ratio (total dividends paid/net income), and the plowback ratio (1 ? dividend payout ratio). c. Compute the sustainable growth rate, g = b × ROE, where b equals the plowback ratio. d. Compare the growth rates ( g ) with the P/E ratios of the firms by plotting the P/Es against the growth rates in a scatter diagram. Is there a relationship between the two? e. Using data from financial statements, find or calculate the ratios of price-to-book, price-to-sales, and price-to-cash flow from operations for each firm in your sample. Use a line chart to plot these three ratios on the same set of axes. What relationships do you see among the three series? f. For each firm, compare the three-year growth rate of earnings per share with the growth rate you calculated above. Is the actual rate of earnings growth correlated with the sustainable growth rate you calculated?
Dee Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per share. She borrows $4,000 from her broker to help pay for the purchase. The interest rate on the loan is 8%. a. What is the margin in Dee’s account when she first purchases the stock? b. If the share price falls to $30 per share by the end of the year, what is the remaining margin in her account? If the maintenance margin requirement is 30%, will she receive a margin call? c. What is the rate of return on her investment?
Sample questions asked in the 10th edition of Essentials of Investments:
Consider the following information regarding the performance of a money manager in a recent month. The table presents the actual return of each sector of the manager’s portfolio in column (1), the fraction of the portfolio allocated to each sector in column (2), the benchmark or neutral sector allocations in column (3), and the returns of sector indexes in column (4). a. What was the manager’s return in the month? What was her over- or underperformance? b. What was the contribution of security selection to relative performance? c. What was the contribution of asset allocation to relative performance? Confirm that the sum of selection and allocation contributions equals her total “excess” return relative to the bogey.
A common misconception is that investors can earn excess returns by investing in foreign bonds with higher interest rates than are available in the U.S. Interest rate parity implies that any such interest rate differentials will be offset by premiums or discounts in the forward or futures market for foreign currency. Interest rates on government bonds in the U.S., U.K., Japan, Germany, Brazil, and Australia can be found at www.bloomberg.com . (Look for the link to Markets, and then Rates + Bonds .) Spot exchange rates on international currencies can be found at www.bloomberg.com . (Look for the link to Markets, and then Currencies .) Forward exchange rates on currency futures contracts can be found at www.cmegroup.com . (Look for the link to Trading and then FX .) Select one of these countries and record the yield on a short-term government security from the Bloomberg website. Also make note of the U.S. Treasury yield on an instrument with the same maturity.
Both a call and a put currently are traded on stock XYZ; both have strike prices of $50 and maturities of six months. a. What will be the profit to an investor who buys the call for $4 in the following scenarios for stock prices in six months? ( i ) $40; ( ii ) $45; ( iii ) $50; ( iv ) $55; ( v ) $60. b. What will be the profit in each scenario to an investor who buys the put for $6?
The investment policy statement of an institution must be concerned with all of the following except : a. Its obligations to its clients. b. The level of the market. c. Legal regulations. d. Taxation.
Choose 10 firms that interest you and download their financial statements from finance.yahoo.com . a. For each firm, find the return on equity (ROE), the number of shares outstanding, the dividends per share, and the net income. Record them in a spreadsheet. b. Calculate the total amount of dividends paid (dividends per share × number of shares outstanding), the dividend payout ratio (total dividends paid/net income), and the plowback ratio (1 ? dividend payout ratio). c. Compute the sustainable growth rate, g = b × ROE, where b equals the plowback ratio. d. Compare the growth rates ( g ) with the P/E ratios of the firms by plotting the P/Es against the growth rates in a scatter diagram. Is there a relationship between the two? e. Using data from financial statements, find or calculate the ratios of price-to-book, price-to-sales, and price-to-cash flow from operations for each firm in your sample. Use a line chart to plot these three ratios on the same set of axes. What relationships do you see among the three series? f. For each firm, compare the three-year growth rate of earnings per share with the growth rate you calculated above. Is the actual rate of earnings growth correlated with the sustainable growth rate you calculated?
Dee Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per share. She borrows $4,000 from her broker to help pay for the purchase. The interest rate on the loan is 8%. a. What is the margin in Dee’s account when she first purchases the stock? b. If the share price falls to $30 per share by the end of the year, what is the remaining margin in her account? If the maintenance margin requirement is 30%, will she receive a margin call? c. What is the rate of return on her investment?
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Essentials Of Investments Zvi Bodie
Essentials of Investments by Zvi Bodie,Alex Kane,Alan Marcus Book Summary:
Zvi Bodie Portfolio
The market leading undergraduate investments textbook, Essentials of Investments, 8e by Bodie, Kane and Marcus, emphasizes asset allocation while presenting the practical applications of investment theory. The authors have eliminated unnecessary mathematical detail and concentrate on the intuition and insights that will be useful to practitioners throughout their careers as new ideas and challenges emerge from the financial marketplace. The eighth edition has been fully updated to reflect the recent financial crisis and includes a new chapter on Hedge Funds.
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