What is a primary market?  What is a secondary market?

In the Index Model, what is the slope of the Security Characteristic Line (SCL) called?  

In what type of market do bonds trade? 

Your client sold short 700 shares of common stock at $147 per share.  The initial margin is 56%.  What amount of cash or T-bills would she have to deposit in her account?

The 1-year risk-free rate is 4% and the expected return on the market is 20%.  According to CAPM, what is the expected return on a stock with a beta of 1.27?

Calculate the standard deviation (4 pts) and calculate the geometric mean (4 pts) for the holding period returns in the table below. Use  4 decimal precision in your calculation. Day HPRs 1 -1% 2 -2% 3 -4% 4 -8%  

Use the data in the table below to answer the questions.  The 52-week T-bill is currently 5%. Scenario (Probability) Market Stock A Stock B Recession (40%) -30% -36% -18% Expansion (60%) 20% 24% 12%   What are E(rA), E(rB), and E(rM)? (6 pts) Assume βA = 1.25 and assume βB = 0.65.  Choose one of the following.  Show all work. (6 pts) Only stock A is overvalued Only stock B is overvalued Both A and B are overvalued Neither A nor B is overvalued Cannot determine.

The market capitalization rate is 15.55%. Find the intrinsic value of a stock which at the end of the year is expected to trade at $72 and pay a $1.57 dividend.  

Use the data in the table below to calculate A, B, C, and D. (hint: recall spreadsheet 6.6) Risk-free Rate Expected Return Stocks Expected Return Bonds Stdev Stocks Stdev Bonds Correlation(S, B) 4% 12% 6% 24% 9% -0.10   Weight Stocks Weight Bonds Expected Return Portfolio Stdev Portfolio Sharpe Ratio 0.6 A B C D

As you complete a module, the next module will become available to you. In other words, you must complete each module in full before you can proceed to the next module.