If you invest your entire capital in a biotechnology sector mutual fund or biotech exchange traded fund (ETF) with 50 biotech stocks in each fund, then you would have eliminated all of the company-specific risks and your portfolio will be almost fully diversified. Explain whether or not this is a valid diversification argument according to the discussion in Chapters 6 and 25. Limit your answers to no more ten sentences.

Chapter 25 explains that it is better for investors to have part of their money invested in a risk-free asset. Remember that the return (reward) to risk ratio from the new efficiency frontier with the risk-free asset (CML) is better than from the old efficiency frontier with no risk-free asset. Explain why this the addition of a risk-free will lower the overall portfolio risk and raise reward to risk ratio. Limit your answers to no more ten sentences.

 

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I need help please …

If you like, you can use the YTM on a bond issue that is not callable as the pre-tax cost of debt for the company.

As you recall, the formula for WACC is:

rWACC = (E/E+D) rE + D/(E+D) rD (1-TC)

The formula for the required return on a given equity investment is:

ri= rf + βi * (RMkt-rf)

RMkt-rf is the Market Risk Premium. For this project, you may assume the Market Risk Premium is 5% unless you can develop a better number.

rf is the risk free rate. The risk free rate is normally the yield on US Treasury securities such as a 10-year treasury. For this assignment, please use 3.5%.

You may assume a corporate tax rate of 40%.

Conplete areport that contains the following elements:

·      Your calculated WACC.

·      How data was used to calculate WACC. This would be the formula and the formula with your values substituted.

·      Sources for your data.

·      A discussion of how much confidence you have in your answer. What were the limiting assumptions that you made, if any?

Include a Microsoft® Excel® file showing your WACC calculations discussed above.

 

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If you obtain an average proportion of women of 52% from a series of randomly drawn samples, and this proportion has a standard error of 0.07, what can you say about the population parameter? Provide your answers with three levels of confidence.

 

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If you plotted a bond’s price against different possible interest rates and the resulting plot turned out to be a downward sloping straight line (going down from left to right the way a typical demand curve is plotted in economics, not a straight horizontal line), would that bond have non-zero duration? Would it have non-zero convexity? Explain.

• Attachment 1
• Attachment 2

 

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If you prepare a 1.00 m solution of NH4ClO4 beginning with water at 29.5C, what is the final temperature of the solution in C? Assume that the specific heats of both pure H2O and the solution are the same, 4.18 J/( K*g)

 

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