Mr Steven
FOURTH EDITION
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STUDENT SOLUTIONS MANUAL
Thomas E. Copeland J. Fred Weston Kuldeep Shastri
Managing Director of Corporate Finance Monitor Group, Cambridge, Massachusetts Professor of Finance Recalled, The Anderson School University of California at Los Angeles Roger S. Ahlbrandt, Sr. Endowed Chair in Finance and Professor of Business Administration Joseph M. Katz Graduate School of Business University of Pittsburgh
Reproduced by Pearson Addison-Wesley from electronic files supplied by author. Copyright © 2005 Pearson Education, Inc. Publishing as Pearson Addison-Wesley, 75 Arlington Street, Boston, MA 02116 All rights reserved. This manual may be reproduced for classroom use only. Printed in the United States of America. ISBN 0-321-17954-4
1 2 3 4 5 6 OPM 07 06 05 04
Contents
Preface...............................................................................................................................................v Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 16 Chapter 17 Chapter 18 Chapter 19 Introduction: Capital Markets, Consumption, and Investment................................1 Investment Decisions: The Certainty Case..............................................................6 The Theory of Choice: Utility Theory Given Uncertainty ....................................13 State Preference Theory.........................................................................................32 Objects of Choice: Mean-Variance Portfolio Theory............................................44 Market Equilibrium: CAPM and APT...................................................................60 Pricing Contingent Claims: Option Pricing Theory and Evidence........................77 The Term Structure of Interest Rates, Forward Contracts, and Futures ................90 Multiperiod Capital Budgeting under Uncertainty: Real
s
STUDENT SOLUTIONS MANUAL
Thomas E. Copeland J. Fred Weston Kuldeep Shastri
Managing Director of Corporate Finance Monitor Group, Cambridge, Massachusetts Professor of Finance Recalled, The Anderson School University of California at Los Angeles Roger S. Ahlbrandt, Sr. Endowed Chair in Finance and Professor of Business Administration Joseph M. Katz Graduate School of Business University of Pittsburgh
Reproduced by Pearson Addison-Wesley from electronic files supplied by author. Copyright © 2005 Pearson Education, Inc. Publishing as Pearson Addison-Wesley, 75 Arlington Street, Boston, MA 02116 All rights reserved. This manual may be reproduced for classroom use only. Printed in the United States of America. ISBN 0-321-17954-4
1 2 3 4 5 6 OPM 07 06 05 04
Contents
Preface...............................................................................................................................................v Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 16 Chapter 17 Chapter 18 Chapter 19 Introduction: Capital Markets, Consumption, and Investment................................1 Investment Decisions: The Certainty Case..............................................................6 The Theory of Choice: Utility Theory Given Uncertainty ....................................13 State Preference Theory.........................................................................................32 Objects of Choice: Mean-Variance Portfolio Theory............................................44 Market Equilibrium: CAPM and APT...................................................................60 Pricing Contingent Claims: Option Pricing Theory and Evidence........................77 The Term Structure of Interest Rates, Forward Contracts, and Futures ................90 Multiperiod Capital Budgeting under Uncertainty: Real