Questions from General Investment

Q: Define, discuss, and contrast the following terms. a

Define, discuss, and contrast the following terms. a. Interest b. Simple interest c. Compound interest d. True rate of interest (or return)

Q: Describe, compare, and contrast the concepts of future value and

Describe, compare, and contrast the concepts of future value and present value. Explain the role of the discount rate in calculating present value.

Q: What is an annuity? How can calculation of the future value

What is an annuity? How can calculation of the future value of an annuity be simplified? What about the present value of an annuity?

Q: What is a mixed stream of returns? Describe the procedure used

What is a mixed stream of returns? Describe the procedure used to find the present value of such a stream.

Q: What is an efficient portfolio, and what role should such a

What is an efficient portfolio, and what role should such a portfolio play in investing?

Q: What is the capital asset pricing model (CAPM)? What role

What is the capital asset pricing model (CAPM)? What role does beta play in the model? What is the risk premium? How is the security market line (SML) related to the CAPM?

Q: What are listed options, and how do they differ from conventional

What are listed options, and how do they differ from conventional options?

Q: Describe traditional portfolio management. Give three reasons why traditional portfolio managers

Describe traditional portfolio management. Give three reasons why traditional portfolio managers like to invest in well-established companies.

Q: What is modern portfolio theory (MPT)? What is the feasible

What is modern portfolio theory (MPT)? What is the feasible or attainable set of all possible portfolios? How is it derived for a given group of investments?

Q: Over the past 10 years, Molly O’Rourke has slowly built a

Over the past 10 years, Molly O’Rourke has slowly built a diversified portfolio of common stock. Currently her portfolio includes 20 different common stock issues and has a total mar...