Department of Statistical & Actuarial Sciences

Course Webpage for Financial Modelling 2555A

Fall 2016

Financial Modelling 2555a/b – Corporate Finance

Description: Goal and governance of firms, bond and stock pricing, risk and return, portfolio theory, Capital Asset Pricing Model, capital budgeting, market efficiency, corporate financing.

Antirequisite(s): Management and Organizational Studies 2310A/B, 3310A/B, the former Actuarial Science 2555A/B.

Pre- or corequisite(s): Actuarial Science 2553A/B or Actuarial Science 2053.

3 lecture hours, 0.5 course.

NOTE: Before coming to each lecture, you are expected to check course updates below.

07 September 2016: COURSE OUTLINE

IMPORTANT DATES-Posting and Due Dates of Assignments

The pdf file of each particular assignment can be accessed and printed by

clicking the link to the assignment number. Solutions to assignments will be

posted within 3-4 days after the deadline. Please submit your assignments in

class by 12:30 of the due date.

Events	Posting Date	Due Date	Solutions
Assignment No.1 To download and print the marking scheme, click here.	29 Sep 2016	11 Oct 2016	Soln to Assgnmt1 *Problems not* required for submission Problems required for submission with TA Marking Guidelines (how your assignment is marked) GUIDELINES to request remarking of assignment and midterm exam papers**
*In class exam 1*		*Midterm Exam 1* *18 Oct 2016* *19:00-21:00* COVERAGE: Materials covered in Chapters 1, 2, 3 and 4 of Brealey, et al. textbook. Midterm Exam 1 Guidelines VENUE: HSB Last names beginning with A to K: HSB 236 Last names beginning with L to Z: HSB 240	Soln Exam1 -- Copies of the solutions will be distributed after the exam. GUIDELINES to request remarking of assignment and midterm exam papers
Assignment *No.2 (updated -30Oct2016)* To download and print the marking scheme, click *here (updated 30 Oct 2016).*	Friday, 28 Oct 2016	10 Nov 2016	Soln to Assgnmt2 *Problems not* required for submission Problems required for submission (with TA marking guidelines) GUIDELINES to request remarking of assignment and midterm exam papers**
*In class exam 2*		*Midterm Exam 2* *15 Nov 2016* *19:00-21:00* Midterm Exam 2 Guidelines VENUE: HSB Last names beginning with A to M: HSB 236 *Last names beginning with N to Z: HSB 240*	Soln Exam2 -- Copies of the solutions will be distributed after the exam. GUIDELINES to request remarking of assignment and midterm exam papers
Assignment No.3 To download and print the marking scheme, click here.	22 Nov 2016	01 Dec 2016	Soln to Assgnmt3 *Problems not* required for submission Problems required for submission GUIDELINES to request remarking of assignment and midterm exam papers**
*Three-hour final exam* FINAL EXAM GUIDELINES		Time: *09-12:00HRS* Date: *Thu, 15 Dec 2016* VENUE: NS 145 Coverage: All lecture materials covered in the course.

UPDATES!!!

02 December 2016^NEW

o PDF of Solutions to Assignment No. 3 (required for submission) is available for download from the link above.

01 December 2016

o FM 2555a's last lecture was delivered on 29 Nov 2016. Assignment #3 papers will be collected by a TA at 12:30pm in BGS 165. Note that the TA will only be around for 10 minutes. Late assignment submissions will not be accepted.

An email to the entire class will be sent next week providing information of when and where the marked assignment papers can be picked up.

30 November 2016

o Lecture summary – Chapter 17

23 Nov 2016

o Final Exam Guidelines

22 November 2016

o Practice Exercises for Chapter 17

SOLUTIONS -- Practice Exercises for Chapter 17

o PDFs of Assignment No. 3 and the assignment marking scheme are now available for download from the above links. Some hints to problems required for submission will be given in Thursday’s lecture (24 Nov 2016).

o Lecture summary – Chapter 13

PDF of Ch17 Presentation NotesPages Coloured Format

Ch17 Presentation 3-Slides-Per-Page (Coloured) Format

Ch17 Presentation Notes-Pages White-Background Format

Ch17 Presentation 3-Slides-Per-Page White-Background Format

11 November 2016

o Lecture summary – Chapter 9

o Solutions to practice exercises in Chapter 8 (06-Nov-2016 posting) have been updated. Minor corrections to problems [11/214] and [13/215] were highlighted.

o Solutions to problems required for submission in Assignment #2 (with TA marking guidelines) can be downloaded from the above link.

09 November 2016

o PDF of Ch13 Presentation NotesPages Coloured Format

Ch13 Presentation 3-Slides-Per-Page (Coloured) Format

Ch13 Presentation Notes-Pages White-Background Format

Ch13 Presentation 3-Slides-Per-Page White-Background Format

07 November 2016

o Mid-term exam 2 guidelines

06 November 2016

o Practice Exercises for Chapter 8

o SOLUTIONS -- Practice Exercises for Chapter 8 [Last updated: 12 Nov 2016]

o Lecture summary – Chapter 8

05 November 2016

o PDF of Ch9 Presentation NotesPages Coloured Format

Ch9 Presentation 3-Slides-Per-Page (Coloured) Format

Ch9 Presentation Notes-Pages White-Background Format

Ch9 Presentation 3-Slides-Per-Page White-Background Format

01 November 2016

o PDF of Ch8 Presentation Coloured Format

PDF of Ch8 Presentation White-Background Format

Ch8 Presentation Notes-Pages Format Ch8 Presentation 3-Slides-Per-Page Format

31 October 2016

o PDF of Ch7 Presentation Coloured Format

o Lecture summary – Chapter 7

30 October 2016

o PDF of Solutions to Practice Exercises in Assignment No. 2 is available for download from the link above.

28 October 2016

o UPDATED PDFs of Assignment No. 2 (Question 4 – modification highlighted in blue) and the assignment marking scheme are available for download from the above links. Some hints will be given in Tuesday’s lecture (01 Nov 2016).

25 October 2016

o PDF of Ch7 Presentation White-Background Format

Ch7 Presentation Notes-Pages Format Ch7 Presentation 3-Slides-Per-Page Format

o Lecture summary – Chapter 6

18 October 2016

o Correction to Midterm Exam 1 solution: Answer to Problem 3(b) is missing a compounding factor of (1.14)^5. This is the FV of a 5-year annuity, which is the same as “s angle 5”.

12 October 2016

o Lecture summary – Chapter 5

o Slide #5-16 in chapter slide presentation has a typo: C1 should be -3000 instead of +3000. If you formulate the NPV equation [which is a quadratic equation in v =1/ (1+r) ], you will find that the discriminant is less than zero. This implies that there are no real roots; hence, no IRRs.

11 October 2016

o Solutions to Required Questions in Assignment #1 can be downloaded from the above link.

o Mid-term exam 1 guidelines

o PDF of Ch6 Presentation White-Background Format

Ch6 Presentation Notes-Pages Format Ch6 Presentation 3-Slides-Per-Page Format

08 October 2016

o Practice Exercises for Chapter 4

o SOLUTIONS -- Practice Exercises for Chapter 4

06 October 2016

o PDF of Ch5 Presentation White-Background Format

Ch5 Presentation Notes-Pages Format Ch5 Presentation 3-Slides-Per-Page Format

o Practice Exercises for Chapter 4 – to be posted soon

o Lecture summary – Chapter 4

30 September 2016

o Solutions to problems (not required for submission) in Assignment 1 have been posted.

o Lecture summary – Chapter 3

29 September 2016

o Assignment No. 1 was updated:

(i) Course title on front page was corrected, and

(ii) Required Question 1 on page 7 of the Assignment sheet

was updated with the following info “Mr Williams expects to retire in 30 years … ”.

o PDFs of Assignment No. 1 and the assignment marking scheme are

available for download from the above links.

27 September 2016

o PDF of Ch4 Presentation White-Background Format

Ch4 Presentation Notes-Pages Format Ch4 Presentation 3-Slides-Per-Page Format

21 September 2016

o Lecture summary – Chapter 2

20 September 2016

o PDF of Ch3 Presentation White-Background Format

Ch3 Presentation Notes-Pages Format Ch3 Presentation 3-Slides-Per-Page Format

17 September 2016

o Lecture summary - Chapter 1

15 September 2016

FM 2555a lecture is cancelled today. You are encouraged to attend the London Life event.

==

London Life Off Campus Event

London Life invites all Western Actuarial students, alumni and Faculty

to spend the afternoon networking with the

Actuaries at London Life. This is an amazing opportunity to

learn more about the industry and the wonderful positions that

London Life has to offer. It will also help students to build their

professional network. All current Actuarial Students are

expected to attend. The Actuaries at London Life are taking

time out of their day to meet with you!

 · 1:00pm Pick up from Western Science Centre (meet outside Western

Science Centre).

 · 2:00pm Arrival at London Life where you will recieve a tour of the

building and network with London Life Actuaries

 · 2:30pm Joint presentation - topic TBA

 · 3:30pm Networking session

 · 4:00pm Fun activities

 · 5:00pm Pizza dinner

 · 6:15pm Transportation back to Western Science Centre

13 September 2016

o REMINDER: The instructor will only provide certain information via email if you are using your UWO account. You are advised to use your UWO email so that the instructor can respond to your message in a timely manner.

o The Acquisitions Manager of the UWO Bookstore has been advised to re-order more copies of FM 2555A’s textbook. You will be informed when these textbook orders arrive (hopefully soon).

12 September 2016

o Notes-Pages and 3-Slides-Per-Page Formats are now available for lecture presentation. The purpose of the new formats is to facilitate note taking.

o PDF of Chapter 2 lecture – Week of 12-16 September 2016

Ch2 Presentation Notes-Pages Format Ch2 Presentation 3-Slides-Per-Page Format

08 September 2016

o Summary and Emphasis for Chapter 1 – to be posted on Wednesday (after Chapter 1 is discussed completely)

o PDF of First-lecture (Chapter 1) presentation

Ch1 Presentation Notes-Pages Format Ch1 Presentation 3-Slides-Per-Page Format

07 September 2016

o A pdf copy of the Course Outline can be downloaded from the above link.