🙋 Student Q&A (Lecture 10)

Click here to learn about timestamps and my process for answering questions. Section agendas can be found here. Email office hour questions to rob.mgmte2000@gmail.com. PS1Q2=“Question 2 of Problem Set 1”

📅 Questions covered Saturday, Apr 18

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❔ CAPM Jargon?

✔ https://2000.robmunger.com/formulas/#-l10---capm-and-emh

📅 Questions covered Tuesday, Apr 21

🕣 7:41pm
❔ Is the yen carry trade a good example of arbitrage?

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🕣 7:43pm
❔ What are the relative proportions on the final before the midterm and after the midterm?

✔ The final will be cumulative, and cover all the material presented in lectures, from the first lecture on Jan. 29 to the last lecture posted on May 5. However, it will be heavily weighted toward material presented since the midterm. There will only be a few questions on the material presented before the midterm.

🕣 7:45pm
❔ In general, if he asks if the stock price is fair, do we, in general, calculate the market cap and discount that?

✔ There are many ways to calculate the fair share price for a given stock. The most common one you’ll probably run into is when you’re given probabilities and a future dividend you expect to receive. You follow what was covered in the EMH lecture.

There are a million ways to do it, and all of them will be fair, but there are too many to list. You could use CAPM and try to predict the stock price. I can see him doing that, but there’s a lot.

The only thing you can be sure of is that you can’t predict what will be on the exam. The one takeaway is that you won’t know what will be on the exam, and there may be questions that aren’t like the homework. You should prepare with the homework and try to understand the material really well so you’re ready for anything. Try to understand it deeply so you can think things through. The more predictable the exam is, the less students will study. He wants you to study and really learn the material, so he’s not going to make it predictable.

🕣 7:47pm
❔ Thought this might be interesting in light of our recent sections… 

Looks like we might have another meme name!!! Avis up 300%. Hearing short squeeze..

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🕣 7:51pm
❔ Can we have an estimate on how many questions will be on the final?

✔ We can’t know for sure, but I will look up last year’s exam or last fall’s exam from the previous semester and see how many sub parts it had. Last fall there were 19 subparts, but some of the subparts were pretty small.