1. Critically analyze some of shortcomings of the Capital Asset Pricing Model (CAPM). What are some better alternatives to provide a quantitative relationship between risk and return?
2. If you need an estimated S250,000 for your kid's college education in 7 years, how much money should you set aside today on a U.S. savings bond earning 7.5% per year with continuous compounding?
3. A Consol (perpetual) Bond pays £100.00 at the end of each year. If the market interest rate is 7.50%, what is the selling price for this bond?