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For what purposes are they used and how do they relate to one another: efficient portfolio, individual investor, short selling, Sharpe ratio, beta and CAPM.
Would you ever use CAPM to make personal investment decisions? Why or why not?
How would Bonus Depreciation affect company's stock price. If CEO wanted to take his/her company public, how would ARRA assist company to minimize risk-return.
For each portfolio, calculate the risk premium per unit of risk that you expect to receive ([E(R) - RFR]/s). Assume that the risk-free rate is 3.0 percent.
On the basis of the results of parts a through c, what would be your estimate of Shelby’s cost of equity?
For the following article from the Journal of Finance & Accounting: Explain the methodology, gap and key conclusions.
Calculate excess returns for the S&P 500 index, Apple and Exxon.
CAPM recommended to use or not for measurement as a good indicator of an assets performance?
Bloom and Co. has no debt or preferred stock; it uses only equity capital, and has two equally- sized divisions.
Find out what is the present Yield to Maturity (YTM) on a US Government bond that matures in one year. That rate is the 'risk-free rate'.
Current Yield to Maturity (YTM) on a U.S. Government bond that matures based on the Treasury Bill Rate for 1 year is 0.10 and for 13 weeks is 0.02.
Show the work you did to obtain the cost of equity for Google.
Discuss the Arbitrage Pricing Theory and the Fama-French factor and the "preciseness" of techniques used to calculate cost of capital.
Is it possible for a stock to have a negative standard deviation in returns? Explain.
Within the context of investment, explain how CAPM can be useful to investors.
Hurdle Rate - Explain why the cost of capital is referred to as the "hurdle" rate in capital budgeting.
AA Industries stock has a beta of 0.8. The risk-free rate is 4% and the expected return on the market is 12%. What is the required rate of return on AA’s stock?
Ralston Purina had AA-rated, 10-year bonds outstanding with a yield to maturity of 2.05%. a. What is the highest expected return these bonds could have?
Q1) According to the CAPM, what is the expected rate of return on Acme equity? Q2) What is the Beta of the Acme assets?
What are the primary advantages and disadvantages of the Capital Asset Pricing Model (CAPM) compared with the Constant Dividend Growth Model
Calculate the monthly return for each stock or ETF. For stocks and the ETF, do this the normal way, but make sure you are moving the correct way through time
What is the average (historic) return on the stock market? Note the returns are reported monthly. Need to answer with annual returns.
Briefly set out arguments in favour of - and against - the Capital Asset Pricing Model (CAPM), outline its uses and make a critique of its underlying assumption
Problem: Review the balance sheet and income statement of Apple Inc's 2015 Annual Report.
Which of these cash flow streams has the higher present value if the discount rate is 5%? If the discount rate is 15%?