1. Give an explanation of average returns, arithmetic vs. geometric averages, and risk premiums. Also, explain how the average investor could benefit by knowing these concepts in order to assume the least amount of risk.
2. Which is better analysis type NPV or IRR and why? Pros and cons of each?
3. Explain the CAPM model. For Microsoft and Disney, Calculate the returns based on the CAPM model. What are the assumptions?