Review Questions: Section 5
Define return in both the expost and exante sense. Describe the various components of return.
If a project cost $6,000 and has a $2,000, $1,200, and $6,000 cash flow over the next three years, calculate the IRR, NPV, Payback, and the MIRR.
Define beta and calculate beta for slide 12 using 2.7% instead of
What is margin trading? Rework the problem on slide 15 using a margin of only 20%.
Suppose you short sell 100 shares of AW stock at $50. Assume the price of the stock falls to $46. What is your net dollar and percentage
A low beta stock is always better than a high beta stock in the long-run. Explain.