Question 235 SML, NPV, CAPM, risk
The security market line (SML) shows the relationship between beta and expected return.
Investment projects that plot on the SML would have:
Question 578 inflation, real and nominal returns and cash flows
Which of the following statements about inflation is NOT correct?
Question 626 cross currency interest rate parity, foreign exchange rate, forward foreign exchange rate
The Australian cash rate is expected to be 2% pa over the next one year, while the Japanese cash rate is expected to be 0% pa, both given as nominal effective annual rates. The current exchange rate is 100 JPY per AUD.
What is the implied 1 year forward foreign exchange rate?
A trader buys one crude oil European style call option contract on the CME expiring in one year with an exercise price of $44 per barrel for a price of $6.64. The crude oil spot price is $40.33. If the trader doesn’t close out her contract before maturity, then at maturity she will have the:
Question 658 CFFA, income statement, balance sheet, no explanation
To value a business's assets, the free cash flow of the firm (FCFF, also called CFFA) needs to be calculated. This requires figures from the firm's income statement and balance sheet. For what figures is the income statement needed? Note that the income statement is sometimes also called the profit and loss, P&L, or statement of financial performance.
Which of the following quantities is commonly assumed to be normally distributed?
Question 810 CAPM, systematic and idiosyncratic risk, market efficiency
Examine the graphs below. Assume that asset A is a single stock. Which of the following statements is NOT correct? Asset A: