Reference no: EM131019353
A) What are the differences between the Security Market Line and the Capital Market Line? Show their formulas.
B) What are the assumptions of the Capital Asset Pricing Model (CAPM)?
C) What are the differences between the Capital Asset Pricing Model (CAPM) and the Arbitrage Pricing Theory (APT). Indicate at least 2 other factors affecting stock returns according to Arbitrage Pricing Theory models.
D) Your client has offered a 5-year, $1,000 par value bond with a 10 percent coupon. Interest on this bond is paid quarterly. 1) If your client is to earn a nominal rate of return of 12 percent, compounded quarterly, how much should he pay for the bond? 2) How much should he pay if it is a perpetual bond?
E) What are the differences of the following: required rate of return on a stock, expected rate of return on a stock, actual or realized rate of return on a stock.
F) What does market efficiency mean? Define the 3 forms/levels of market efficiency. Where would the current stock markets fall and why?
G) Is negative free cash flow always bad? Explain why or why not.
H) Describe Market Value Added (MVA) and Economic Value Added (EVA).
I) What is free cash flow? Explain the 3 determinants of free cash flow.
J) Define the determinants of nominal market interest rates.
K) What is the present value of a 5 year ordinary annuity with annual payments of $200, evaluated at a 15 percent interest rate?
L) What is the difference between interest rate risk and reinvestment rate risk?
M) What is the difference between stand-alone risk and market risk? How are they measured?
N) What is the Du Pont Equation? And why is it useful?
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Problem regarding the evaporation of river water
: To avoid this "thermal pollution" of the river, the plant could instead be cooled by evaporation of river water. (This is more expensive, but in some areas it is environmentally preferable.) At what rate must the water evaporate? What fraction of ..
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Find the value of ron
: The CMOS inverter of Fig. is implemented in a 0.13-μm process for which μnCox =500 μA/V2, μpCox = 125 μA/V2, Vtn =-Vtp =0.4 V, and VDD 1.2 V. The NMOS transistor has (W/L)n = 1.5. What must (W/L)p be if QN and QP are to have equal Ron resistances..
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Maximum possible efficiency of this plant
: At a power plant that produces 1 GW (109 watts) of electricity, the steam turbines take in steam at a temperature of 500°C, and the waste heat is expelled into the environment at 20°C. (a) What is the maximum possible efficiency of this plant?
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Evaluate the efficiency of engine
: Evaluate the efficiency of this engine for the case V2 = 3Vl, P2 2Pl. Calculate the efficiency of an "ideal" engine operating between the same temperature extremes.
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What are the assumptions of the capital asset pricing model
: What are the differences between the Security Market Line and the Capital Market Line? Show their formulas. What are the assumptions of the Capital Asset Pricing Model (CAPM)?
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Way of stating the third law of thermodynamics
: A common (but imprecise) way of stating the third law of thermodynamics is "You can't reach absolute zero." Discuss how the third law, as stated in Section 3.2, puts limits on how Iowa temperature can be attained by various refrigeration technique..
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Limiting temperature for rubidium atoms
: Make a rough estimate of this limiting temperature for rubidium atoms that are cooled using laser light with a wavelength of 780 nm.
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Find ron of an nmos transistor
: Consider MOS transistors fabricated in a 65-nm process for which μnCox = 470 μA/V2, μpCox = 190 μA/V2, Vtn =-Vtp = 0.35 V, and VDD =1 V. Find Ron of an NMOS transistor with W/L = 1.5.
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Discuss the importance of an investment advisor
: Discuss the importance of an investment advisor being able to explain to his or her client why a mutual fund characterized by a very low standard deviation could be riskier than a similar type fund with a higher absolute number
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