Charles J Corrado Fundamentals of Investments - Chapter 1 pdf

... follows:Michele, Inc. Janicek Co. (12 - 6)2 = 36 (5 - 11 )2 = 36 (-4 - 6)2 = 10 0 ( -1 5 - 11 )2 = 676(0 - 6)2 = 36 (10 - 11 )2 = 1 (20 - 6)2 = 19 6 (38 - 11 )2 = 729(2 - 6)2 = 16 (17 - 11 )2 = ... stocks T-bonds (13 .70 - 12 .11 )2 = 2.53 (6.50 - 4.20)2 = 5.29(35.78 - 12 .11 )2 = 560.27 (4.52 - 4.20)2 = .10 (45 .15 - 12 .11 )2 = 1, 0 91. 64 (0.05 - 4.20)2 = 17 .22 (-8 .86 - 12 .11 )2 = ... CPI 19 62 -8 .79%6.04%2.80% 1. 33% 19 6322.72% 1. 39%3 .16 % 1. 64% 19 64 16 .43%3.87%3.59%0.97% 19 65 12 .38% 1. 00%3.98% 1. 92% 19 66 -1 0 .10 %4.79%4.93%3.46% 19 6724.04% -2 .48%4.49%3.04% 19 68 11 .04% 1. 57%5.39%4.72% 19 69 -8 .47% -4 .98%6. 81% 6.20% 19 704.00% 18 . 31% 6.70%5.57% 19 71 14.35% 11 .49%4.50%3.27% 19 72 18 .99%2.44%4.06%3. 41% 19 73 -1 4.85%3.43%6.98%8. 71% 19 74 -2 6.58%3.75%8.09% 12 .34% 19 7537.42%5.60%6.03%6.94% 19 7623.76% 15 .32%5 .15 %4.86% 19 77 -7 .38%0.45%5.28%6.70% 19 786.54% -1 .15 %7.23%9.02% 19 79 18 .59%0.37% 10 .30% 13 .29% 19 8032. 61% -0 .80% 12 .04% 12 .52% 19 81 -4 .97%2.46% 15 .23%8.92% 19 82 21. 67%44.44% 11 .27%3.83% 19 8322.57% 1. 90%8.90%3.79% 19 846 .19 % 16 .00% 10 .04%3.95% 19 85 31. 85%30.67%7.70%3.80% 19 86 18 .68%23 .13 %6 .18 % 1. 10% 19 875.22% -3 .43%5.86%4.43% 19 88 16 .58%6.83%6.73%4.42% 19 89 31. 75% 18 . 81% 8.49%4.65% 19 90 -3 .13 %7.23%7.84%6 .11 % 19 91 30.53% 18 .70%5. 71% 3.06% 19 927.62%8.54%3.57%2.90% 19 93 10 .07% 13 .59%3.08%2.75% 19 94 1. 27% -7 .55%4 .15 %2.67% 19 9537.80%25. 21% 5.64%2.54% 19 9622.74% 1. 54%5 .12 %3.32% 19 9733.43% 10 .97%5.22% 1. 70% 10 ...

... years3.08 616 .677424.705 512 .624092.963.58407.297068.254996. 01 35 31. 304.08203.486729. 71 4528.903047.824.58005 .10 6408 .16 410 6.4626 31. 495.07 811 .98 610 2. 71 3724. 31 2272.845.57623.985 812 . 51 3378.52 19 63.776.07440.945536.763065.57 16 97.336.57262.725274. 71 2782.26 14 67.567.07089 .19 5025.662525.72 12 69.347.56920.204788.922293.38 10 98.288.06755.644563.872082.89950.608.56595.374349.89 18 92 .16 823.079.06439.28 414 6.43 17 19.29 712 .899.56287.233952.93 15 62.57 617 .67 10 .0 613 9 .13 3768.89 14 20.46535.36 10 .55994.863593.83 12 91. 56464 .17 11 .05854. 31 3427.29 11 74.63402.58 11 .55 717 .373268.83 10 68.53349.28 12 .05583.95 311 8.05972.22303 .14 12 .55453.942974.55884.79263 .19 13 .05327.262837.97805. 41 228.57 13 .55203. 81 2707.96733. 31 198.58 14 .05083.492584 .19 667.80 17 2.57 14 .54966.232466.35608.29 15 0.02 15 .048 51. 942354 .13 554 .19 13 0.46 16 ... years3.08 616 .677424.705 512 .624092.963.58407.297068.254996. 01 35 31. 304.08203.486729. 71 4528.903047.824.58005 .10 6408 .16 410 6.4626 31. 495.07 811 .98 610 2. 71 3724. 31 2272.845.57623.985 812 . 51 3378.52 19 63.776.07440.945536.763065.57 16 97.336.57262.725274. 71 2782.26 14 67.567.07089 .19 5025.662525.72 12 69.347.56920.204788.922293.38 10 98.288.06755.644563.872082.89950.608.56595.374349.89 18 92 .16 823.079.06439.28 414 6.43 17 19.29 712 .899.56287.233952.93 15 62.57 617 .67 10 .0 613 9 .13 3768.89 14 20.46535.36 10 .55994.863593.83 12 91. 56464 .17 11 .05854. 31 3427.29 11 74.63402.58 11 .55 717 .373268.83 10 68.53349.28 12 .05583.95 311 8.05972.22303 .14 12 .55453.942974.55884.79263 .19 13 .05327.262837.97805. 41 228.57 13 .55203. 81 2707.96733. 31 198.58 14 .05083.492584 .19 667.80 17 2.57 14 .54966.232466.35608.29 15 0.02 15 .048 51. 942354 .13 554 .19 13 0.46 16 ... Bill $1, 000 $1, 000 Weekly52-Week Bill $1, 000 $1, 000 Every 4 Weeks2-Year Note $1, 000 $1, 000 Monthly5-Year Note $1, 000 $1, 000 February, May,August, November 10 -Year Note $1, 000 $1, 00030-Year...

... dollar return = 48% of $1, 000 = $480 At the end of the year, the value of your $1, 000 investment is $1, 480.The Historical Record: A Closer Look 1 - 12 @2002 by the McGraw- Hill Companies Inc.All ... A Closer Look 1 - 11 @2002 by the McGraw- Hill Companies Inc.All rights reserved.McGraw Hill / IrwinThe Historical Record: A Closer LookFigure 1. 3 1 - 10 @2002 by the McGraw- Hill Companies ... Second Lesson 1 - 21 @2002 by the McGraw- Hill Companies Inc.All rights reserved.McGraw Hill / Irwin© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw Hill / Irwin 1 - 7Work...

... McGraw-Hill Companies, Inc. All rights reserved.McGraw Hill / Irwin 10 - 29Properties of Duration© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw Hill / Irwin 10 - 12 Work ... some of the fundamental tools of bond risk analysis used by fixed-income portfolio managers.Goal© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw Hill / Irwin 10 - 15 Yield ... simplified:()⎥⎥⎥⎦⎤⎢⎢⎢⎣⎡+−+=M22YTM 1 1 1 YTM2YTM 1 Par valuebond duration© 2002 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw Hill / Irwin 10 - 23DurationSo,YTMin duration...

... follows:Michele, Inc. Janicek Co. (12 - 6)2 = 36 (5 - 11 )2 = 36 (-4 - 6)2 = 10 0 ( -1 5 - 11 )2 = 676(0 - 6)2 = 36 (10 - 11 )2 = 1 (20 - 6)2 = 19 6 (38 - 11 )2 = 729(2 - 6)2 = 16 (17 - 11 )2 = ... CPI 19 26 13 .70%6.50%4. 41% -1 .12 % 19 2735.78%4.52%4. 21% -2 .26% 19 2845 .15 %0.05%4.87% -1 .16 % 19 29 -8 .86%5.77%6.03%0.58% 19 30 -2 5.22%4 .18 %3.75% -6 .40% 19 31 -4 3.76%0.32%2.62% -9 .32% 19 32 -8 .40%5.63%2. 91% -1 0.27% 19 3353 .12 %6.02% 1. 69%0.76% 19 34 -2 .42%5.94% 1. 06% 1. 52% 19 3546.98%3.29%0.26%2.99% 19 3632.33% 1. 67%0 .14 % 1. 45% 19 37 -3 5.68%4.69%0.45%2.86% 19 3832.26%4.79%0.05% -2 .78% 19 39 -1 .55%2.26%0.02%0.00% 19 40 -1 0.50%4. 31% 0. 01% 0. 71% 19 41 -1 2 .14 % 1. 54%0.09%9.93% 19 4220.98% 1. 80%0.32%9.03% 19 4325.50%2. 01% 0.37%2.96% 19 44 19 .48%2.27%0.38%2.30% 19 4536.33%5.29%0.38%2.25% 19 46 -8 .48%0.54%0.38% 18 .13 % 19 474.96% -1 .02%0.57%8.84% 19 484.93%2.66% 1. 04%2.99% 19 49 17 .76%4.58% 1. 12% -2 .07% 19 5030.03% -0 .98% 1. 21% 5.93% 19 51 23.88% -0 .20% 1. 54%6.00% 19 52 18 .44%2.43% 1. 74%0.75% 19 53 -1 .11 %2.28% 1. 95%0.75% 19 5452.43%3.08%0.96% -0 .74% 19 55 31. 64% -0 .73% 1. 70%0.37% 19 566.90% -1 .72%2.68%2.99% 19 57 -1 0.53%6.82%3.30%2.90% 19 5843.73% -1 .72% 1. 81% 1. 76% 19 59 12 .02% -2 .02%3.34% 1. 73% 19 600.45% 11 . 21% 3 .13 % 1. 36% 19 61 26.89%2.20%2.35%0.67%22 ... CPI 19 26 13 .70%6.50%4. 41% -1 .12 % 19 2735.78%4.52%4. 21% -2 .26% 19 2845 .15 %0.05%4.87% -1 .16 % 19 29 -8 .86%5.77%6.03%0.58% 19 30 -2 5.22%4 .18 %3.75% -6 .40% 19 31 -4 3.76%0.32%2.62% -9 .32% 19 32 -8 .40%5.63%2. 91% -1 0.27% 19 3353 .12 %6.02% 1. 69%0.76% 19 34 -2 .42%5.94% 1. 06% 1. 52% 19 3546.98%3.29%0.26%2.99% 19 3632.33% 1. 67%0 .14 % 1. 45% 19 37 -3 5.68%4.69%0.45%2.86% 19 3832.26%4.79%0.05% -2 .78% 19 39 -1 .55%2.26%0.02%0.00% 19 40 -1 0.50%4. 31% 0. 01% 0. 71% 19 41 -1 2 .14 % 1. 54%0.09%9.93% 19 4220.98% 1. 80%0.32%9.03% 19 4325.50%2. 01% 0.37%2.96% 19 44 19 .48%2.27%0.38%2.30% 19 4536.33%5.29%0.38%2.25% 19 46 -8 .48%0.54%0.38% 18 .13 % 19 474.96% -1 .02%0.57%8.84% 19 484.93%2.66% 1. 04%2.99% 19 49 17 .76%4.58% 1. 12% -2 .07% 19 5030.03% -0 .98% 1. 21% 5.93% 19 51 23.88% -0 .20% 1. 54%6.00% 19 52 18 .44%2.43% 1. 74%0.75% 19 53 -1 .11 %2.28% 1. 95%0.75% 19 5452.43%3.08%0.96% -0 .74% 19 55 31. 64% -0 .73% 1. 70%0.37% 19 566.90% -1 .72%2.68%2.99% 19 57 -1 0.53%6.82%3.30%2.90% 19 5843.73% -1 .72% 1. 81% 1. 76% 19 59 12 .02% -2 .02%3.34% 1. 73% 19 600.45% 11 . 21% 3 .13 % 1. 36% 19 61 26.89%2.20%2.35%0.67%22...

... rate of return?42 Chapter 2 Chapter 2Buying and Selling SecuritiesEnd of Chapter Questions and ProblemsReview Problems and Self-Test 1. The Account Balance Sheet Suppose you want to buy 10 ,000 ... Stock Transaction Charles Schwabwww.schwab.com $29.95, up to 1, 000 sharesFidelity Investments www.fidelity.com $25, up to 1, 000 sharesDLJdirectwww.dljdirect.com $20, up to 1, 000 sharesE*Tradewww.etrade.com ... themaximum number of shares you can buy? Why? 10 . Short Sale Profits Suppose you sell short 1, 000 shares of a stock at $30 per share. Ignoringborrowing costs and fees, what is the maximum profit you...

... agree to buy T-bonds with a total par value $10 0,000 inDecember at a price of 13 1- 1 5 per $10 0 of par value, where the -1 5" represents 15 /32. Thus 13 1- 1 5can also be written as 13 1- 1 5/32, which ... P/E 10 0s Hi Lo Close Chg92 503/4Gigan GIG 2.50 4.2 22 12 690 603/460 60 – 1 /8 13 10 1 /2Gigan pfA 1. 20 ?? 59 11 3/4 11 1 /2 11 5/8 34 30 1 /2Gigan pfB 3.00 ?? 85 32 31 1/232 ... a price of 13 1- 1 5/32 per $10 0 par value. The price hasrisen to 13 6 -1 5/32, so you make a profit of $5 per $10 0 of par value, or $5,000 per $10 0,000 facevalue. With 20 contracts, each of which...

... public).20. NAV at IPO = $10 (1 – .09) = $9 .10 (P – $9 .10 )/$9 .10 = – .10 ; P = $8 .19 The value of your investment is 5,000($8 .19 ) = $40,950, a loss of $9,050 in one day.6 CHAPTER 4 1 Fidelity would probably ... front-end or back-endloads and no or minimal 12 b -1 fees are often called “pure” no-load funds to distinguish them fromthe “not-so-pure” funds that may have no loads but still charge hefty 12 b -1 ... amount of these fees could be .75 percentto 1. 0 percent of the fund's assets per year.(marg. def. 12 b -1 fees Named for SEC Rule 12 b -1 , which allows funds to spend upto 1 percent of fund...

... 48 Chapter 5 11 . Stock Indexes Which one of the following statements regarding the Dow Jones IndustrialAverage is false?a. the DJIA contains 30 well-known large-company stocksb. the DJIA ... 19 98 and 19 99?Shares 1/ 1/98 1/ 1/99 1/ 1/00(mil.) Price Price PriceDouglas McDonnell 15 0 60 75 60Dynamics General 750 20 25 40International Rockwell 300 40 35 35 15 . Price-Weighted Indices In ... McDonnellshareholders approve a 5-for -1 stock split on January 1, 19 99. What is the new divisor for theindex? Calculate the rate of return on the index for the year ending December 31, 19 99 ifDouglas McDonnell’s...

... D(0){ (1. 3 /1. 15) + (1. 3 /1. 15)2 + (1. 3 /1. 15)3 + [1. 33 (1. 2) + 31. 05] /1. 154 }D(0) = 42.50/23 .11 = 1. 84 ; D (1) = 1. 84 (1. 3) = $2.39 17 . V(4) = $1. 00 (1. 08)/( .16 –.08) = $13 .50V(0) = $2.25 /1. 16 ... (1. 05 /1. 10)5] = $8.72V(0) = [$2 (1. 05)/( .10 – .05)] [1 – (1. 05 /1. 10) 10 ] = $15 .62V(0) = [$2 (1. 05)/( .10 – .05)] [1 – (1. 05 /1. 10)30] = $ 31. 60V(0) = [$2 (1. 05)/( .10 – .05)] [1 – (1. 05 /1. 10) 10 0] ... security with a beta of .75 isa. 6 percentb. 8 percentc. 11 percentd. 13 percent 16 Chapter 6V(0) $0.47 (1. 012 ) .16  . 012 1  1. 012 1. 165 1. 012 1. 165$0.47 (1. 12) .16  .12  $1. 59  $6.65...