Lecture 12 Review PDF - FINA1221 - Introduction to Finance

Lecture 12 Review Final Exam Coverage Revision Dr Taher Jamil FINA1221 [email protected] Introduction to Finance Weekly Important Stuff Checklist  Revise Chapters 7-12 (except Ch 10):  No more tu...

Lecture 12 Review Final Exam Coverage Revision Dr Taher Jamil FINA1221 [email protected] Introduction to Finance Weekly Important Stuff Checklist  Revise Chapters 7-12 (except Ch 10):  No more tutorials  MyFinanceLab Tests 10: Close date: 11:58PM, Sunday 20 October 2024 The University of Western Australia 2 Final Exam Structure FINA1221 Introduction to Finance Relevant FINAL EXAM QUESTIONS Possible Mark Chapters 7 8&9 11 & 12 1 to 20 (MCQ) 60 7, 8, 9, 11, 12 21 7 7 22 10 11 & 12 23 8 11 & 12 42% 24 15 8&9 24% 39% Chapters 7 8 & 9 11 & 12 18% 24% Overall 19% 39% 42% 19% 15% 12% Part A - MCQ 12% 24% 24% 7% O V E R AL L P AR T A - M C Q P AR T B Part B 7% 15% 18% The University of Western Australia 3 FINA1221 – Final Exam  Exam Duration: 2 hours  Mode of Exam: On-Campus  Date, Time and Venue: The exam will be held during the official university examination period-please refer to the official timetable or contact studentConnect. The University of Western Australia 4 FINA1221 – Final Exam  Exam format: This is a closed book examination. Total Marks: 100 o Part A: 20 MCQs worth 60 marks. o Part B: 4 questions worth 40 marks. Each question in Part B may consist of sub-questions. You must answer all the questions. There are both qualitative/conceptual and quantitative questions. The University of Western Australia 5 Exam Coverage Lecture notes: From lecture 7 to lecture 12 Textbook chapter: 7-12 (except chapter 10) Illustrations provided throughout the semester. Tutorial questions and solutions MFL tests The University of Western Australia 6 Permitted Items UWA approved calculator which must be stickered. Pen, pencil, ruler, and set square, eraser. For approved items list and other important information, please check the following link: before and during your exams The University of Western Australia 7 Important Instructions  Please start each question on a new page, and clearly label the question numbers. For example: if you are answering Question 1, part (a), write "Answer to Question 1(a)" before starting your response.  It is your responsibility to make the writing readable.  You must return the question paper along with your answer booklet to the invigilator at the end of the exam. Failure to do so will result in a penalty.  Formula sheet will be provided with the exam question. Please note that everything covered is examinable, so you are reasonably expected to know those that are not in the formula sheet. The University of Western Australia 8 Frequently Asked Questions  Q: Do I have to read everything in the textbook that is assigned, as you have not covered everything?  A: You do not have to read everything though you are encouraged to. You should use the lecture slides and recordings, practice questions, tutorial questions and other materials provided as a guide as to what areas you should focus on. The University of Western Australia 9 Frequently Asked Questions Q: Are there past examination papers that I can look at?  A: No – however, you have the lecture slides and recordings; relevant textbook chapters and problems; solutions to the textbook end of chapter questions, solutions to the tutorial questions; reading materials provided and related materials. These should prepare you for the final exam.  Solutions to the textbook end of chapter questions Weekly folder on LMS The University of Western Australia 10 Frequently Asked Questions  Q: Can I review the MFL tests?  A: Yes.  To review you should click on results  And then click review The University of Western Australia 11 Frequently Asked Questions  Q: Is it mandatory to use financial calculator?  A: No. Question paper is designed in a way that you should be able to solve the problems with UWA approved scientific or financial calculator. The University of Western Australia 12 Frequently Asked Questions  Q: Will I be able to bring any formula sheet or notes to the test?  A: No The University of Western Australia 13 Frequently Asked Questions Q: What if there is a mistake in the question paper?  A: Hopefully, there will be no mistakes ☺. If there is a mistake in the question paper, you should write the best possible answer based on the information provided. Please note, it might not be possible to correct the mistake during the exam. The University of Western Australia 14 Frequently Asked Questions Q: What should I do if I am sick or cannot take the final exam?  A: Please ensure you have a valid reason and contact the student services immediately for advice. The University of Western Australia 15 Week 7 Lecture  Valuing Equity Instruments Describe the basics of ordinary shares, preference shares and share quotes. Value a share as the present value of its expected future dividends. Understand the trade-off between dividends and growth in share valuation. Appreciate the limitations of valuing a share based on expected dividends. Value a share as the present value of the company’s total payout. The University of Western Australia 16 Week 8 Lecture  Investment Decision Rules Calculate net present value. Use the NPV rule to make investment decisions. Explain alternative decision rules and their drawbacks. Choose between mutually exclusive alternatives. Evaluate projects with different lives. Rank projects when a company’s resources are limited so that it cannot take all positive-NPV projects. The University of Western Australia 17 Week 9 Lecture  Capital Budgeting Given a set of facts, identify relevant cash flows for a capital budgeting problem. Explain why opportunity costs must be included in cash flows, while sunk costs and interest expense must not. Calculate taxes that must be paid Calculate free cash flows for a given project. Illustrate the impact of depreciation expense on cash flows. Use breakeven analysis, sensitivity analysis, or scenario analysis to evaluate project risk. The University of Western Australia 18 Week 10 Lecture  Risk and Return Mean, variance, standard deviation (volatility) Trade-off between risk and return – Portfolio – Single security Firm-specific risk, systematic risk, and total risk Beta The University of Western Australia 19 Week 11 Lecture  Systematic Risk and Equity Risk Premium Portfolio construction – Expected mean return, variance, volatility (standard deviation), covariance, correlation – Realised measures using historical returns Equally weighted portfolio Efficient portfolio Risk premium Capital Asset Pricing Model The University of Western Australia 20 Last slide Good luck with all your exams and future studies! The University of Western Australia 21