Discussion Post
• Obtain a current quote of McDonald's (MCD) from the Internet. Describe what has changed since the quote in Figure 8.1.
• Get the trading statistics for the three main U.S. stock exchanges. Compare the trading activity to that of Table 8.1.
• Describe the difference in the timing of trade execution and the certainty of trade price between market orders and limit orders.
• Under what conditions would the constant-growth model not be appropriate?
Characterize the historical return, risk, and risk-return relationship of the stock, bond, and cash markets.
• Which company is likely to have lower total risk,General Electric or Coca-Cola? Why?
• You receive an investment newsletter advertisement in the mail. The letter claims that you should invest in a stock that has doubled the return of the S&P 500 Index over the last three months. It also claims that this stock is a surefire safe bet for the future. Explain how these two claims are inconsistent with finance theory.
• Describe the diversification potential of two assets with a -0.8 correlation. What is the potential if the correlation is +0.8?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.