Assignment 1

1. Set up an amortization schedule in Excel that caters to possible prepayments (or excess payments). The loan details are: $38,500, 6.5% APR, 5 year loan with Monthly payments. Show, on the spreadsheet, the impact of an extra $6000 payment in month 11.

Assignment 2

1. From Yahoo Finance (or Bloomberg) download 3 years of daily stock price data for

a. a US corporation of your choice

b. GLD (gold etf)

c. ^GSPC (S&P 500 index)

Make sure the data are aligned and matched from earliest to most recent.

2. Run the Market Model regression for the corporation's returns (regression of returns on returns of the S&P 500 index). Interpret the R-square, intercept, and slope. What is the required rate of return for this stock (you will need the current T-bond yield for this)?

3. Run a regression of returns of GLD on returns of the S&P 500 index. Interpret the R-square, intercept, and slope.