Category Archives: Announcements

Midterm Exam 2 Booklet and Solutions

The Midterm Exam 2 Booklet and Solutions are now available for downloading from the course website.

Restrictions on Use: Section III.C.16 of Baylor’s Honor Code Policy and Procedures stipulates that using, uploading, or downloading any online resource derived from material pertaining to a Baylor course without the written permission of the professor constitutes an act of academic dishonesty. Since Professor Garven gives no such permission for Finance 4335 course content, this means that the use and redistribution of Finance 4335-related documents involving any source other than Professor Garven are expressly forbidden. For more information on the use restrictions of Finance 4335 course content, see http://bit.ly/4335honorcode.

Next up in Finance 4335…

This Thursday, we will introduce the topic of (financial) derivatives (specifically, options and futures) in Finance 4335. Besides their use in managing price-related risks (for more on this, see “A Beginner’s Guide to Hedging“), the basic principles behind these types of financial instruments also yield insights into how firm-specific risks affect corporate value, which is a concept that we will explore in some detail during upcoming Finance 4335 class meetings.

The assigned readings for class on Thursday include:

1. Derivatives and Options (Doherty, Chapter 6)
2. Teaching the Economics and Convergence of the Binomial and Black-Scholes Option Pricing Formulas, by James R. Garven and James I. Hilliard

I will close by pointing out that besides my lecture notes on Futures and Forwards  (see pp. 5-13 of the Derivatives Theory, part 1 lecture note), it’s hard to beat the following video tutorial on this topic:

Formula Sheet for Midterm 2 (along with some Midterm 2 – related information)

The formula sheet for Midterm Exam 2 is now available at http://fin4335.garven.com/fall2019/formulas_part2.pdf. This document will be appended to the back of the Midterm 2 exam booklet that y’all will get to see for the first time on Tuesday.  In my opinion, the two most important Midterm 2 – related documents are the formula sheet and the Finance 4335 course synopsis for Midterm Exam 2.

Here’s some further information about Midterm 2 (to be given in class on Tuesday, November 5):

  • Midterm 2 consists of two sections. Section 1 consists of six multiple choice and two short answer questions worth 4 points each, whereas Section 2 consists of three problems worth 32 points each.
  • Students are required to either complete Section 1 questions and two out of three Section 2 problems, or to ignore Section 1 and complete all three Section 2 problems. For students who complete all of Sections 1 and 2, I will count the three highest scoring questions and/or problems toward the exam grade.
  • The maximum number of points possible on this exam’s questions and problems totals 96, and I will add an additional 4 points on your exam if you legibly write your name on the cover page in the space provided. Thus, the maximum number of points possible on this exam is 100 points.

Let me know whether you have any Midterm 2 – related questions or concerns.  If you need to contact me tomorrow, call or text during business hours to 254-307-1317, or email me at James_Garven@baylor.edu.

Easy access to solutions for problem sets, class problems, and the Spring 2019 midterm 2

As I mentioned during our class meeting yesterday, http://risk.garven.com/category/problem-set-solutions/ opens a webpage that features a chronologically ordered (from most to least recent) listing of links for 3 assigned problem sets (problem sets 5-7) and 6 class problems given in Finance 4335 since Midterm 1.

I have also posted the Spring 2019 Midterm 2 exam booklet and solutions on the Sample Exams page of the Finance 4335 course website.  Once I have completed writing the Fall 2019 Midterm 2 exam, I will post this exam’s formula sheet on the Finance 4335 Formula Sheets page.

Restrictions on Use: Section III.C.16 of Baylor’s Honor Code Policy and Procedures stipulates that using, uploading, or downloading any online resource derived from material pertaining to a Baylor course without the written permission of the professor constitutes an act of academic dishonesty.  Since Professor Garven gives no such permission for Finance 4335 course content, this means that the use and redistribution of Finance 4335-related documents involving any source other than Professor Garven are expressly forbidden.  For more information on the use restrictions of Finance 4335 course content, see http://bit.ly/4335honorcode.  

Next Tuesday’s meeting of Finance 4335 (review session for Midterm 2)

Next Tuesday’s  Finance 4335 class meeting will be devoted to a review session for Midterm 2, which is scheduled for the following Tuesday, November 5. I highly recommend reviewing problem sets 5-7 and the various class problems (insurance economics, moral hazard, adverse selection, portfolio theory, capital market theory). Solutions for all of these are available at http://risk.garven.com/category/problem-set-solutions. Also, try working the Spring 2019 Midterm 2 before tomorrow’s class if time permits. If you prepare this way, it will be a particularly productive class meeting indeed!

Today’s Capital Market Theory Class Problem and Solutions

See the links listed below for today’s Capital Market Theory Class Problem and Solutions:

Restrictions on Use: Section III.C.16 of Baylor’s Honor Code Policy and Procedures stipulates that using, uploading, or downloading any online resource derived from material pertaining to a Baylor course without the written permission of the professor constitutes an act of academic dishonesty. Since Professor Garven gives no such permission for Finance 4335 course content, this means that the use and redistribution of Finance 4335-related documents involving any source other than Professor Garven are expressly forbidden. For more information on the use restrictions of Finance 4335 course content, see http://bit.ly/4335honorcode.

 

Today’s Portfolio Theory Class Problem and Solutions

See the links listed below for today’s Portfolio Theory Class Problem and Solutions:

Restrictions on Use: Section III.C.16 of Baylor’s Honor Code Policy and Procedures stipulates that using, uploading, or downloading any online resource derived from material pertaining to a Baylor course without the written permission of the professor constitutes an act of academic dishonesty. Since Professor Garven gives no such permission for Finance 4335 course content, this means that the use and redistribution of Finance 4335-related documents involving any source other than Professor Garven are expressly forbidden. For more information on the use restrictions of Finance 4335 course content, see http://bit.ly/4335honorcode.

 

Plan B for those who cannot attend Catherine Semcer’s talk tonight

Here’s a Plan B for those who have schedule conflicts with Catherine Semcer‘s talk tonight entitled “Saving Africa’s Wildlife: The Failure of Hunting Bans and Success of Entrepreneurial Solutions”. It turns out that Ms. Semcer was a featured guest on an EconTalk podcast episode hosted by Russ Roberts this past February. I am willing to accept a written report on Ms. Semcer’s EconTalk episode in lieu of a written report on her presentation tonight at Baylor.

The same rules apply for the podcast as they do for tonight’s live presentation. If you decide to take advantage of this podcast extra credit opportunity, I will use the grade you earn on your report to replace your lowest quiz grade in Finance 4335 (assuming that your grade on the extra credit is higher than your lowest quiz grade). The report should be in the form of a 1-2 page executive summary in which you provide a critical analysis of Russ Robert’s 67 minute interview with Ms. Semcer entitled “Poaching, Preserves, and African Wildlife”. In order to receive credit, the report must be submitted via email to fin4335in either Word or PDF format by no later than Monday, October 21 at 5 p.m.