1. âThese days in particular, international stocks are toovolatile to hold in a diversified portfolio.â Discuss.
2. You work for a publicly traded company that is considering abid for another firm. As part of this work, you have been taskedwith valuing this âtargetâ firm. The target firm is closely held bya single family; the firm is the only valuable asset that thefamily holds. What is the role of idiosyncratic risk in preparingan initial bid for the target firm?
3. True, False or Uncertain (Justify your answer). An economicdownturn may cause many firms to âstreamlineâ their productionactivities, focusing on a single product line. In thosecircumstances, the CAPM is less useful than it would be otherwise,when firms have more diversified lines of business.
4. True, False or Uncertain (Justify your answer). I have theopportunity to hold an equally-weighted portfolio of 10,000investment projects which are uncorrelated with each other, or theeconomy. The investment projects are extremely volatile. Inequilibrium, I should expect to earn approximately the risk-freerate.
1. âThese days in particular, international stocks are toovolatile to hold in a diversified portfolio.â Discuss.
2. You work for a publicly traded company that is considering abid for another firm. As part of this work, you have been taskedwith valuing this âtargetâ firm. The target firm is closely held bya single family; the firm is the only valuable asset that thefamily holds. What is the role of idiosyncratic risk in preparingan initial bid for the target firm?
3. True, False or Uncertain (Justify your answer). An economicdownturn may cause many firms to âstreamlineâ their productionactivities, focusing on a single product line. In thosecircumstances, the CAPM is less useful than it would be otherwise,when firms have more diversified lines of business.
4. True, False or Uncertain (Justify your answer). I have theopportunity to hold an equally-weighted portfolio of 10,000investment projects which are uncorrelated with each other, or theeconomy. The investment projects are extremely volatile. Inequilibrium, I should expect to earn approximately the risk-freerate.
