SOA Exam IFM - actuarialbookstore.com

1 Actuarial Study MaterialsLearning Made EasierWith StudyPlus+S OA Exam IFMS tudy Manual1st Edition, Second PrintingAbraham Weishaus, , , , NO RETURN IF OPENEDS tudyPlus+ gives you digital access* to: Flashcards & Formula Sheet Actuarial Exam & Career Strategy Guides Technical Skill eLearning Tools Samples of Supplemental Textbook And more!*See inside for keycode access and login instructionsContents1 Introduction to Derivatives1 Exercises ..3 Solutions ..42 Project NPV .. Project analysis .. Break-even analysis .. Sensitivity analysis .. Scenario analysis .. Risk measures .. Four risk measures .. Coherent risk measures .. 10 Exercises.

2 11 Solutions .. 143 Monte Carlo Simulation19 Exercises .. 23 Solutions .. 394 Efficient Markets Hypothesis (EMH)53 Exercises .. 55 Solutions .. 575 Mean-Variance Portfolio Theory59 Exercises .. 69 Solutions .. 726 Capital Asset Pricing Model (CAPM) Required return .. CAPM .. 78 Exercises .. 81 Solutions .. 857 Cost of Estimating CAPM s parameters .. Project cost of capital .. 90 Exercises .. 92 Solutions .. 978 Behavioral Finance and Multifactor Behavioral finance .. Multifactor models .. 104 Exercises .. 106 Solutions .. 1079 Capital Structure109 Exercises .. 111 IFM Study Manual 1stedition 2ndprintingCopyright 2018 ASMiiiivCONTENTSS olutions.

3 11410 The Effect of Taxes on Capital Structure119 Exercises .. 121 Solutions .. 12311 Other Factors Affecting Optimal Debt-Equity Bankruptcy and Financial Distress .. Agency costs and benefits .. Asymmetric information .. 130 Exercises .. 131 Solutions .. 13512 Equity Sources of capital for private companies .. Allocation of company value among investors .. Going public: the IPO .. IPO puzzles .. 142 Exercises .. 143 Solutions .. 14513 Debt Corporate Debt .. Other Debt .. 148 Exercises .. 149 Solutions .. 15014 How a forward works .. Pricing a Forward .. Additional Comments on Forwards.

4 Forward Premium .. Comparison of Forward Price to Expected Future Price .. Synthetic forwards .. 156 Exercises .. 157 Solutions .. 16115 Variations on the Forward Prepaid forwards .. Futures .. 166 Exercises .. 167 Solutions .. 17016 Call options .. Put options .. 175 Exercises .. 176 Solutions .. 18117 Option Options with Underlying Assets .. Synthetic Forwards .. 187 IFM Study Manual 1stedition 2ndprintingCopyright 2018 Bear Spreads, Bull Spreads, and Collars .. Spreads: buying an option and selling another option of the same kind .. Collars: buying one option and selling an option of the other kind.

5 Straddles, Strangles, and Butterfly Spreads .. 193 Exercises .. 195 Solutions .. 20618 Put-Call Stock put-call parity .. Synthetic stocks and Treasuries .. Synthetic options .. Currency options .. 215 Exercises .. 216 Solutions .. 22319 Comparing Bounds for Option Prices .. Early exercise of American options .. Time to expiry .. Different strike prices .. Three inequalities .. Options in the money .. 248 Exercises .. 249 Solutions .. 25120 Binomial Trees Stock, One Risk-neutral pricing .. Replicating portfolio .. Volatility .. 263 Exercises .. 265 Solutions .. 27421 Binomial Trees Multi-period binomial trees.

6 American options .. Currency options .. Futures .. Other assets .. 292 Exercises .. 293 Solutions .. 30222 Binomial Trees: Understanding Early Exercise of Options317 Exercises .. 318 Solutions .. 31923 Modeling Stock Prices with the Lognormal The normal and lognormal distributions .. The normal distribution .. The lognormal distribution .. Jensen s inequality .. The lognormal distribution as a model for stock prices .. Stocks without dividends .. 324 IFM Study Manual 1stedition 2ndprintingCopyright 2018 Stocks with dividends .. Prediction intervals .. Conditional payoffs using the lognormal model.

7 328 Exercises .. 334 Solutions .. 33624 The Black-Scholes Black-Scholes Formula for common stock options .. Black-Scholes formula for currency options .. Black-Scholes formula for options on futures .. 348 Exercises .. 349 Solutions .. 35525 The Black-Scholes Formula: Greeks .. Delta .. Gamma .. Vega .. Theta .. Rho .. Psi .. Greek measures for portfolios .. Elasticity and related concepts .. Elasticity .. Related concepts .. Elasticity of a portfolio .. What will I be tested on? .. 388 Exercises .. 390 Solutions .. 39626 Delta Overnight profit on a delta-hedged portfolio.

8 The delta-gamma-theta approximation .. Hedging multiple Greeks .. What will I be tested on? .. 413 Exercises .. 414 Solutions .. 42227 Asian, Barrier, and Compound Asian options .. Barrier options .. Maxima and minima .. Compound options .. Compound option parity .. 440 Exercises .. 442 Solutions .. 44828 Gap, Exchange, and Other Gap options .. Definition of gap options .. Pricing gap options using Black-Scholes .. Delta hedging gap options .. 461 IFM Study Manual 1stedition 2ndprintingCopyright 2018 Exchange options .. Other exotic options .. Chooser options .. Forward start options.

9 465 Exercises .. 467 Solutions .. 47629 Supplementary Questions Derivatives485 Solutions .. 49330 Real Decision trees .. Black-Scholes .. Option to abandon project .. 506 Exercises .. 507 Solutions .. 50931 Actuarial Applications of Variable annuities .. Mortgage guaranty insurance .. Other insurance features that constitute options .. Static hedging strategies using exotic options .. Dynamic hedging .. Hedging catastrophe risk .. 517 Exercises .. 517 Solutions .. 519 Practice Exams5231 Practice Exam 15252 Practice Exam 25353 Practice Exam 35454 Practice Exam 45555 Practice Exam 55656 Practice Exam 65737 Practice Exam 75818 Practice Exam 85899 Practice Exam 959710 Practice Exam 1060511 Practice Exam 11615 IFM Study Manual 1stedition 2ndprintingCopyright 2018 ASMviiiCONTENTSA ppendices625A Solutions for the Practice Exams627 Solutions for Practice Exam 1.

10 627 Solutions for Practice Exam 2 .. 633 Solutions for Practice Exam 3 .. 640 Solutions for Practice Exam 4 .. 647 Solutions for Practice Exam 5 .. 654 Solutions for Practice Exam 6 .. 662 Solutions for Practice Exam 7 .. 670 Solutions for Practice Exam 8 .. 678 Solutions for Practice Exam 9 .. 686 Solutions for Practice Exam 10 .. 694 Solutions for Practice Exam 11 .. 704B Solutions to Old Solutions to SOA Exam MFE, Spring 2007 .. Solutions to CAS Exam 3, Spring 2007 .. Solutions to CAS Exam 3, Fall 2007 .. Solutions to Exam MFE/3F, Spring 2009 .. Solutions to Advanced Derivatives Sample Questions .. 727C Lessons Corresponding to Questions on Released and Practice Exams739D Standard Normal Distribution Function Table743 IFM Study Manual 1stedition 2ndprintingCopyright 2018 ASML esson 2 Project AnalysisReading:Corporate , IFM 21-18 2 3 This lesson begins the corporate finance part of the course.