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Core Finance Questions
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Core Finance Questions
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25 Questions

1. Systematic Risk

2. Expected Return = Risk-free rate + Risk Premium for _________ Risk ONLY

3. Correlation of stocks

4. Reduced ________________ of the components of a portfolio will ______________ the volatility of the portfolio

5. MM PROPOSITION WITHOUT TAXES

6. The __________ _________ should reflect the risk of the project

7. SML Overvalued

8. Higher B = higher amount of market risk = _______________ return for the company

9. Required return must take into account _________ of the firm's cash flows and the projects it undertakes

10. Cost of Equity capital (re)

11. If increasing debt increases the value of the firm, why not shift to 100% debt?

12. CAPM - Capital Asset Pricing Model

13. Estimates of Beta are usually

14. Standard deviation is the __________ of the variance

15. TAX SHIELD

16. If the NPV is _____________ it's a good investment and should proceed

17. 2/3 of observations on a bell curve represent ______________ of observations

18. Higher perceived risk (std dev) requires ______________ expected return

19. CAPM Explanation

20. systematic and unsystematic risk vs volatility

21. How to find standard deviation on the calculator

22. If you are choosing among 2 investments with the same return choose the one with the _______________ risk

23. By introducing debt, we have ______________ the overall benefits to investors

24. Your company has preferred stock that has an annual dividend of $3. If the current price is $25, what is the required Return of Preferred Stock?

25. MM PROPOSITION WORLD WITH TAXES