Math 5621 (369) Financial Mathematics II

(Applied Mathematics of Corporate Finance)

Fall 2008

Instructor – James G. Bridgeman

You should be thinking about a term-paper topic.  Pick a section of the book not on the syllabus to explore, or a section on the syllabus to explore more deeply than the text does.  Although the paper will not be due until December 5, I will ask you to tell me your topic by October 17 and to submit an outline by November 7, and will hold you to that topic and outline unless you give me a very good reason to switch.

Term papers are due by email, in my mailbox, or under my office door no later than 5 PM on Monday December 8.

Cumulative assignments (final)  (most recent assignment at top)

Study sections 9A through 9I

Study sections 7G, H, and I and read 7J and 7K for background

Do exercises 16.1, 16.5, 16.6, 16.7, 16.8 and 16.10

Study sections 16A-D and 16G

Do exercises 15.9, 15.11-15.15, 15.17-15.18, and 15.20-15.21

Study Sections 15I-J and read for background 15K-L

Do exercises 15.1-15.8

Study Section 14C and Sections 15A-15H

Do exercises 11.1, 11.3, 11.4, 11.8, and 11.9

Study Chapter 11 sections A, D, E, F and G (read the other sections for background only)

Do exercises 10.1, 10.2, 10.5, 10.6, 10.8

Study Chapter 10, sections A, C, E, and F (read the other sections for background only)

Complete and hand-in the two-asset portfolio problem assigned in class 10-10: work out the derivation for the expected return and standard deviation of return for the optimal (best Sharpe ratio) portfolio constructed from two risky assets, in terms of the expected returns, standard deviations of returns, and correlation coefficient of returns of the two assets.

Do exercises 6.2-6.18, 6.21

Study Chapter 6

Do exercises 5.3-5.7, 5.9-5.11, and 5.13-5.14; make sure you understand exercise 5.8 (but no need to prove)

Study Chapter 5

Read chapters 3 and 4 only for background

Study section 7F

Do exercises 14.1 thru 14.5

Study Chapter 14, section B

Study Chapter 14, section A … keep connections with chapter 2 in mind

Study Chapter 7, sections A-E

Do exercises 2.1 thru 2.11

Study Chapter 2, sections C thru H

Read for background Chapter 1 and Chapter 2, sections A and B

Study the financial statement analysis handout, do all Quiz questions, Practice Qu. 4,7,8,9,10 and Challenge Qu. 1

(the quiz solutions are in the handout; the PQ and CQ solutions are here.)