Weakness of predictive validation strategy

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1. A company began the year with $40,000 of invested capital. By the end of the year, invested capital had grown by 5%, which represented an investment rate of 80% of NOPAT. The company's WACC is 8%. What was EVA for the year?

2. Discuss why the time interval between predictor and criterion data collection is both a strength and a weakness of a predictive validation strategy? In words

3. Pete is making a market in Hornbeck 5.875% senior notes of 2020 at 65- 65 1/2. How much profit would he make if he traded $3 million (par amount) at that exact market?

Reference no: EM131878406

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