1. How can FCF in the terminal year of a project’s life differ from FCF in the other years? Provide an example.
2. You find a certain stock that had returns of 4 percent,-5 percent,-15 percent,and 16 percent for four of the last five years. The average return of the stock for the 5-year period was23 percent. What is the standard deviation of the stock ‘s returns for the five year period?
3. You plan to deposit $500 in now and $300 at the end of one year. If the account earns 3% interest per year, what will the balance be in the account right after you make the second deposit?