IE 201 Financial Engineering, Spring 2009
Instructor:
Prof. Elodie Goodman (Adida)
Email address: elodie@uic.edu
Office: ERF 3025
Office hours: Monday and Wednesday 12-1pm or by appointment.
Teaching assistants:
Maryam Haji
Email address: mhaji2@uic.edu
Office hours: Monday and Wednesday 4-5:30pm, 4209 SEL (950 S. Halsted St.)
Yuzhou Wu
Email address: ywu33@uic.edu
Office hours: Tuesdays 10am-12pm, Thursdays 10am-12pm and 1-3pm, 4209 SEL (950 S. Halsted St.)
Course Information and schedule of homeworks, and exams: Syllabus
ABET Syllabus
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Announcements:
- (1/12) There will be no quiz session on Friday 1/16. Office hours start on Tuesday 1/20.
- (2/11) Midterm 1 will be held in class on Monday, February 23rd, 11-11:50am. Topics: Chapters 1, 2 and 3.
Closed-book except for one one-sided handwritten formula sheet. Please bring a calculator.
- (2/19) A revised version of Homework 4 Solutions was posted.
- (2/21) A revised version of Homework 5 Solutions was posted.
- (2/21) The professor's office hours on Wednesday 2/25 are moved from 12-1pm to 2-3pm.
- (3/27) Midterm 2 will be held in class on Monday, April 6, 11-11:50am. Topics: Chapters 4 and 5.
Closed-book except for one two-sided handwritten formula sheet. Please bring a calculator.
- (3/27) The Final exam will be held on Thursday, May 7, 10:30am-12:30pm in Lecture Hall A1.
Any student who has a conflict with another final exam should send me an email by April 17.
In your email, include the course you have a conflict with and the days,
times and course numbers of your other final exams during finals week. If you do not email me by April 17,
you will not be allowed to take a make-up exam, so please check for conflicts before that date.
- (4/27) The Final exam will be held on Thursday, May 7, 10:30am-12:30pm in Lecture Hall A1. Topics: Chapters 1-8 with a focus on chapters 6, 7 and 8.
Closed-book except for one two-sided handwritten formula sheet. Please bring a calculator.
- (4/29) The complete solution of the example started in class today can be found here.
- (4/29) Practice problems on ROR analysis of multiple mutually exclusive alternatives can be found here.
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Homeworks:
- (1/14) Homework 1 (due on Jan. 23rd): problems 1.9, 1.12, 1.14, 1.17, 1.18, 1.23, 1.24, 1.26 from the textbook.
If you don't have the textbook yet, you can find the problems here.
Homework 1 Solutions
- (1/21) Homework 2 (due on Jan. 30th): problems 1.35, 1.36, 1.38, 1.39, 1.41, 1.42, 1.44, 1.50 from the textbook.
Homework 2 Solutions
- (1/28) Homework 3 (due on Feb. 6th): problems 2.3, 2.5, 2.8, 2.12, 2.15, 2.20, 2.23, 2.26 from the textbook.
Homework 3 Solutions
- (2/6) Homework 4 (due on Feb. 13th): problems 2.27, 2.30, 2.33, 2.35, 2.41, 2.42, 2.43, 2.47 from the textbook.
Homework 4 Solutions (revised on 2/19)
- (2/11) Homework 5 (due on Feb. 20th): problems 2.55, 2.57, 3.3, 3.12, 3.20, 3.26, 3.27, 3.35, 3.47 from the textbook.
In problem 2.55, give two methods for finding the answer, and give detailed explanations for each method.
Homework 5 Solutions (revised on 2/21)
- (2/25) Homework 6 (due on March 6th): problems 4.3, 4.5, 4.6, 4.9, 4.11, 4.14, 4.15, 4.21, 4.23 from the textbook.
Homework 6 Solutions
- (3/4) Homework 7 (due on March 13th): problems 4.29, 4.32, 4.35, 4.41, 4.45, 4.47, 4.51, 4.56 from the textbook. In problem 4.41,
answer the question under both assumptions "with no interperiod compounding" and "with interperiod compounding".
Homework 7 Solutions
- (3/12) Homework 8 (due on March 20th): problems 5.8, 5.9, 5.14, 5.15, 5.20, 5.21, 5.24, 5.29 from the textbook.
Homework 8 Solutions
- (3/18) Homework 9 (due on April 3rd): problems 5.39, 5.41, 5.42, 5.50, 5.53, 6.3, 6.5 from the textbook. In problems 6.3 and 6.5,
calculate the AW value of each alternative and select the alternative with the higher AW value.
Homework 9 Solutions
- (4/8) Homework 10 (due on April 17): problems 6.6, 6.12, 6.14, 6.15, 6.20, 6.23, 7.3, 7.6 from the textbook. In problem 7.6,
calculate the ROR value with 3 methods: trial and error, interpolation, and Excel built-in function(s) as discussed in the quiz session on April 10.
In each method, give enough details to show your work. You may want to attach a print-out of your Excel spreadsheet(s).
Homework 10 Solutions
- (4/15) Homework 11 (due on April 24): problems 7.8, 7.12, 7.15, 7.18, 7.26, 7.27, 7.33 from the textbook.
In each problem, justify as precisely as possible the number of rate of return values (even if not explicitly asked)
and give some details on how you obtained the numerical solution(s).
In problem 7.18, assume that the compounding period is a quarter.
Homework 11 Solutions