1. An investor wishes to invest 119% in the dominant portfolio, currently earning 7.5% when the risk-free rate is 1.25%. Determine the return on the portfolio assuming lending and borrowing both take place at the risk-free rate.
2. General Importers announced that it will pay a dividend of $4.20 per share one year from today. After that, the company expects a slowdown in its business and will not pay a dividend for the next 4 years. Then, 6 years from today, the company will begin paying an annual dividend of $2.30 forever. The required return is 12.5 percent. What is the price of the stock today?
3. Analyze and compose the significant components of international and domestic finance.