Problem Set 2 helpful hints

Problem Set 2 is available from the course website at http://fin4335.garven.com/spring2024/ps2.pdf; its due date is Tuesday, January 30.

Problem Set 2 consists of two problems. The first problem requires calculating expected value, standard deviation, and correlation, and using this information as inputs into determining expected returns and standard deviations for 2-asset portfolios. The second problem involves using the standard normal probability distribution to calculate the probabilities of earning various levels of return by investing in risky securities and portfolios; see pp. 13-19 of the http://fin4335.garven.com/spring2024/lecture4.pdf lecture note for coverage of that topic.

Midterm Exam 1 Formula Sheet and Helpful Hints

The formula sheet for Midterm Exam 1 can be downloaded from the following URL: http://fin4335.garven.com/spring2024/formulas_part1.pdf.

Midterm Exam 1 consists of four problems, of which you must solve three. If you attempt all four, only the three highest-scoring problems will count towards your Midterm Exam 1 grade. Each problem has a value of 32 points, and you will receive an additional 4 points for including your name on the front page of the exam booklet. Thus, the maximum score possible for Midterm Exam 1 is 100 points.

On the exam, it is important not only to neatly and concisely present your analysis but also to provide thorough explanations that showcase your understanding of the concepts being examined.

I believe the information provided in this blog post and the guidance offered in the study guide titled “Finance 4335 Midterm 1 Synopsis” should help everyone prepare well for the upcoming midterm exam.

Good luck!