100 word original notes in answering the following questions:
project?
2. What are the two methods for estimating debit cost of
capital, and what do you do when there is default risk? Explain the
circumstances in which you would use each method.
3. In what instances would an investor want to “beat
the market” and “hold the market”? Discuss the strategies for
each and their dependence on an investor’s information and trading skills.
4. In what ways do uninformed investors trade too much?
Discuss how uninformed investors use the CAPM and how their behaviors deviate.
original notes that exceed 250 words per question for
the following questions:
1. What additional assumptions (to the main three) are
important when applying the Capital Asset Pricing Model and what are the
underlying strengths and weaknesses of this application? Discuss the
reliability of the model and give examples in your explanation.
2. Discuss the Arbitrage Pricing Theory and the Fama-French
factor and the “preciseness” of techniques used to calculate cost of
capital. How does one decide on which technique is best to use?
