Arizona State University - FIN 421 / FIN421 Practice Final Exam
3 views 0 purchase
Course
FIN 421
Institution
FIN 421
Consider the following limit order book of a specialist in a market that allows partial
execution of orders. The last trade in the stock took place at a price of $35.
Bid Bid Qty Ask Qty Ask
34..25
34.25 100 1,000 35.50
33.50 400 2,000 35.75
32..00
You place a market sell order for 150 share...
arizona state university fin 421 fin421 practice final exam
Written for
FIN 421
All documents for this subject (14)
Seller
Follow
Marilyn77
Reviews received
Content preview
Practice Final Exam
FIN 421
Spring 2016
Name:
Student ID:
Section: 10951 (T/Th) 10950 (T only)
Part I / 40
Part II / 20
Part III / 40
Total / 100
• You have 110 minutes to complete this exam.
• Only calculator and pen are allowed. A formula sheet is provided on the last pages.
• You are to answer these questions without consulting anyone.
• Show your work wherever necessary.
• Manage your time wisely. Shorter answers are often better.
,Part I. Multiple Choice Questions (5 points each)
Choose only one answer for each question and write the corresponding letter in the table
below. No justifications required.
Question Answer
1
2
3
4
5
6
7
8
2
, 1. Consider the following limit order book of a specialist in a market that allows partial
execution of orders. The last trade in the stock took place at a price of $35.
You place a market sell order for 150 shares. What are your proceeds and what is the
new stock price?
A) $5, 187.50 ; $34.75
B) $5, 187.50 ; $34.25
C) $5, 325.00 ; $35.00
D) $5, 287.50 ; $35.25
E) $5, 287.50 ; $35.00
Answer: B
Determining proceeds: Since you are trying to sell shares, you look to the bid price col-
umn to see what people are willing to pay for the shares. You are able to sell 100 shares
at $34.75 and 50 shares at $34.25
Determining new stock price: The stock price is the last price the stock was purchased
for. In this case, it is the price you sold your last 50 shares for, which is $34.25.
2. An investor invests 40% of his wealth in a risky asset with an expected rate of return of
15% and a variance of 4% and 60% in a treasury bill that pays 6%. What is the portfolio’s
standard deviation?
A) 0.64 %
B) 1.6 %
C) 2.4 %
D) 8.0 %
E) 12.0%
Answer:
√ D
.4 × 0.04 = 0.08
3
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Marilyn77. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $14.99. You're not tied to anything after your purchase.
