… are available at http://fin4335.garven.com/fall2021/finalsampleexam.pdf.
I will be available for face-to-face office hours next week from 3:30-4:30 on Tuesday, 12/7, and from 2:30-4 on Thursday, 12/9. I will also participate in the Final Exams Study Break on Thursday, 12/9, from 4-5:30 pm in Foster 322, so I hope some of you can stop by for that festive occasion!
To schedule virtual office meetings with me for other times between now and the final exam, simply type “appointment.garven.com” in the address field of your device’s web browser and select a date/time that works best for you.
We will devote next Tuesday’s Finance 4335 class meeting to a review session for the final exam. Here are some helpful study hints to consider:
- Problem Set 11 is an optional problem set assignment, the grade for which will replace your lowest problem set grade in Finance 4335 (assuming that it is higher). I highly recommend that everyone complete this assignment in preparation for next Tuesday’s review session.
- Be sure to review the Formula Sheet for the Final Exam.
- Another study tip would be to also review all problem sets, class problems, and the two sample midterms, the solutions for which can be found at http://risk.garven.com/category/problem-set-solutions/.
… are available at http://fin4335.garven.com/fall2021/ps10solutions.pdf.
Kudos to Colton Harmon for pointing out some typos in the solutions for problem set 8 that I posted on November 22. The corrected version is now available; simply click on the link provided at http://risk.garven.com/2021/11/22/solutions-for-problem-set-8/.
Heads up – I just posted a new version of the "Why is Risk Costly to Firms?" lecture note for this week’s (Tuesday and Thursday) lectures at http://fin4335.garven.com/fall2021/risk_costly.pdf. If you have previously printed this lecture note out, I advise replacing it with this document. Looking forward to seeing everyone in class tomorrow!
… are available at http://fin4335.garven.com/fall2021/creditriskclassproblem.pdf and http://fin4335.garven.com/fall2021/creditriskclassproblemsolutions.pdf respectively.
In completing problem set 10, please keep the Finance 4335 course policy concerning the use of Excel for problem sets in mind:
- In Finance 4335, students are welcome to rely on either Excel or hand-held calculators to calculate answers for problems that appear in problem sets. However, in order to earn credit, students must show their work by providing logical explanations of how they get their answers, using properly formed English grammar, along with references to the appropriate theoretical concepts. The best examples I can think of how to “show work” appear in most of the various linked PDF documents comprising solutions for class problems, problem sets, and sample exams @ http://risk.garven.com/category/problem-set-solutions/.
- Keeping this policy in mind, do not upload Excel spreadsheets to Canvas when you turn in your problem set assignments. I base your grades solely on how well you explain and support the answers you provide in the PDF documents which you upload to Canvas.
A Finance 4335 student emailed me today asking for further details concerning how to calculate “fair” premiums for insurance against the risk of default on debt issued by a limited liability firm. Essentially, “fair” premiums for credit enhancement schemes as described in Problem Set 10 correspond to the values of the (put) options to default reflected in risky corporate debt prices.
For further details, review my Credit Risk lecture note, and also watch my recorded lecture on Credit Risk. Starting at 40:29 in that video, I work a credit risk class problem in which I analyze “fair” deposit insurance premiums for two banks which are identical except for the degree of financial leverage. I also build a spreadsheet from scratch, which will help a lot when you work on this problem set.