MAF101 Study Guide - Final Guide: Systematic Risk, Sole Proprietorship, Cash Flow
14 Jun 2018
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EXAM BRIEFING and REVISION
Must pass the exam (30/60 - exam hurdle) to pass the unit.
Examination is 2 hours - closed book
You must have a calculator. Scientific or finance calculators are permitted. Graphical
calculators NOT allowed.
Formulae sheet is attached at the end of the exam paper
Exam paper has 60 marks
Exam questions are based to an extent on tutorial problems and lecture slides.
*General exam structure
The exam is comprised of two sections:
Section A: 10 multiple choice questions (10 marks)
Section B: 5 Short Answer questions (50 marks)
All five questions need to be answered
All questions contain more than one part
Around 50% of the exam paper contains descriptive-type questions which require a written
answer while the other 50% of the exam paper comprises calculation-type questions.
*Section B: Examinable Topics
Question 1:
Topic 1: Introduction to Finance: written answer (4 marks)
Topic 2: Financial Mathematics calculations (6 marks)
Question 2:
Topic 3: Risk and Return Calculation (6 marks)
Topic 3: Risk and Return written answer (4 marks)
Question 3:
Topic 5 Financial Markets - Descriptive type question (4 marks)
Topic 4 Valuation of Debt - Theoretical and Calculation (6 marks)
Question 4:
Topic 4 Valuation of Equity (Descriptive answers and calculation-type question) (4 + 6
marks)
Question 5:
Topic 7 Foreign Exchange
Calculations (4 marks)
Theoretical and Descriptive (6 marks)
*Unit Overview - Topic 1
Types of business structures: sole proprietorship; partnerships; and corporations:
advantages & disadvantages
Agency problem in corporations and how we overcome it?
Taxation system
*Unit Overview - Topic 2 Financial Mathematics
Time value of money
Simple vs Compounding interest
Present value and simple value of a lump sum (week 2)
PV or FV of multiple cash flow streams (unequal)
Ordinary Annuity and Annuity Due - equal cash flow stream eg; mortgage
Effective Annual Rate of Return
*Unit Overview - Topic 3 Risk and Return
Measuring returns (% price change)
Measuring expected returns (average)
Definition of risk
Measuring risk (standard deviation)
Historical data vs probability based calculations
Normal distribution mean + 1*std. deviation; mean + 2*std. deviation etc.
Portfolio risk - why risk reduces through diversification
Systematic risk vs unsystematic risk
Beta as a measure of systematic risk. What is it?
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Must pass the exam (30/60 - exam hurdle) to pass the unit. Formulae sheet is attached at the end of the exam paper. Exam questions are based to an extent on tutorial problems and lecture slides. Section a: 10 multiple choice questions (10 marks) Section b: 5 short answer questions (50 marks) Around 50% of the exam paper contains descriptive-type questions which require a written answer while the other 50% of the exam paper comprises calculation-type questions. Topic 1: introduction to finance: written answer (4 marks) Topic 3: risk and return calculation (6 marks) Topic 3: risk and return written answer (4 marks) Topic 5 financial markets - descriptive type question (4 marks) Topic 4 valuation of debt - theoretical and calculation (6 marks) Topic 4 valuation of equity (descriptive answers and calculation-type question) (4 + 6 marks) Types of business structures: sole proprietorship; partnerships; and corporations: advantages & disadvantages.
