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Cornerstone Industries has a bond outstanding with an 8% coupon rate (APR) and a market price of $870.72. If the bond matures in 6 years and interest is paid semi-annually, what is the YTM (as an APR)?

You have discovered from looking at charts of past stock prices that if you sell just after a stock price has declined for two consecutive weeks, you make money every time in the following week! This is clearly a violation of the _____ of market efficiency.

A firm should try to be as liquid as possible.

Your required return is 15%. Should you accept a project with the following cash flows?                         Year                                 0                1                2                3                         Cash Flow                     -$25           $10            $10            $25

According to the CAPM, what is the expected return on asset A if it has a beta of 1.2, the expected market risk premium is 15%, and the T-bill rate is 1%?

The cash flows of a new project that come at the expense of a firm’s existing projects are:

A project requires an initial investment of $12 million. The target D/E ratio is 1.5. Flotation costs for equity are 10% and flotation costs for debt are 3%. What is the true cost (in dollars) of the project when you consider flotation costs?

An investment earned the following returns for the last four years: –30%, +28%, +15%, and +7%. What is the variance of returns for this investment?

Use the following to answer question 3: State                Probability       Return A         Return B Boom                 .65                   0.30                0.05 Bust                   .35                   0.10                 0.20 What is the standard deviation of a portfolio with one-quarter of the funds in A and the remainder of the funds in B? (Do not round your intermediate results.)

The risk that affects only one stock or a small group of stocks, is called: