What made Harry Hess different from Alfred Wegener?

Bonus Question (2 points) If you were to scan the image sequence below, which imaging plane will be visualized in your resulting images?  

After the trial is completed, investigators learn that many participants who experienced nausea correctly guessed that they were receiving STAT-509. In addition, permanent treatment discontinuation was more common in the STAT-509 group than in the placebo group. Identify two distinct issues these findings raise when interpreting the primary efficacy result. For each issue, explain why it could affect interpretation of the trial.

What additional information, beyond the primary efficacy result, is needed to evaluate the overall benefit-risk profile of STAT-509? Use the trial results provided to support your answer.

The covariance between a stock’s returns and market returns is 0.0288, and the standard deviation of market returns is 15%. The risk-free rate is 3.5% and the expected market return is 9.5%. An analyst expects the stock to return 12.5%. Which statement is correct?

A portfolio holds 60% in a stock fund with a 20% standard deviation and 40% in a bond fund with an 8% standard deviation. The portfolio’s standard deviation is 13.02%. What is the correlation between the two funds?

Two investors can each borrow and lend at the same 4% risk-free rate, face the same menu of risky portfolios, and hold the same forecasts of expected returns, volatilities, and correlations. Each will combine the risk-free asset with exactly one risky portfolio. Investor 1 is highly risk averse; Investor 2 is far more risk tolerant. Which statement is most accurate?

A four-year project requires $800,000 of equipment (including installation) and $90,000 of net working capital at time 0. The working capital requirement rises to $120,000 at the end of year 1 and stays there until the project ends, when all of it is recovered. The equipment is depreciated straight-line to zero over five years for tax purposes and is expected to sell for $100,000 at the end of year 4. Annual revenue is $700,000 and annual cash operating costs are $330,000. The tax rate is 25% and the required return is 12%. What is the project’s NPV?

A capital-budgeting spreadsheet reports net income of $315,000 for each year of a project, after an annual depreciation charge of $180,000 and tax at 25%. What annual operating cash flow belongs in the project’s NPV calculation?

A firm has 60 million shares trading at $27.50, debt with a market value of $900 million, and $150 million of cash. It expects EBITDA of $320 million. What EV/EBITDA multiple is the market applying to this firm?