Questions from General Investment

Q: Are market timing and tactical asset allocation similar? Why or why

Are market timing and tactical asset allocation similar? Why or why not?

Q: What is the reason margin requirements exist?

What is the reason margin requirements exist?

Q: The returns we have examined are not adjusted for inflation. What

The returns we have examined are not adjusted for inflation. What do you suppose would happen to our estimated risk premiums if we did account for inflation?

Q: The returns we have examined are not adjusted for taxes. What

The returns we have examined are not adjusted for taxes. What do you suppose would happen to our estimated returns and risk premiums if we did account for taxes? What would happen to our volatility me...

Q: As a practical matter, most of the return you earn from

As a practical matter, most of the return you earn from investing in Treasury bills is taxed right away as ordinary income. Thus, if you are in a 40 percent tax bracket and you earn 5 percent on a Tre...

Q: In Problem 12, what would the risk-free rate have

In Problem 12, what would the risk-free rate have to be for the two stocks to be correctly priced relative to each other? Data from Problem 12: Stock Y has a beta of 1.05 and an expected return of 1...

Q: Using the CAPM, show that the ratio of the risk premiums

Using the CAPM, show that the ratio of the risk premiums on two assets is equal to the ratio of their betas.

Q: You have $100,000 to invest in a portfolio containing

You have $100,000 to invest in a portfolio containing stock X, stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 13 p...

Q: Based on the dividend growth models presented in the chapter, what

Based on the dividend growth models presented in the chapter, what are the two components of the total return of a share of stock? Which do you think is typically larger?

Q: Aero tech, an aerospace technology research firm, announced this morning

Aero tech, an aerospace technology research firm, announced this morning that it hired the world’s most knowledgeable and prolific space researchers. Before today, Aero tech’s stock had been selling f...