6.a

b.

c.

d.

e.

All else equal, the efficient frontier: Shifts to the left as the correlation between assets decreases. Identifies portfolios that are risk efficient but not return efficient. Shifts to the left as the number of investable assets decreases. Is the location of a portfolio invested 100% in bonds. None of the above. Analysts predict that Ottawa Toys will pay dividends of $3 per share in year 1, $3.5 per share in year 2, and $3.8 per share in year 3. The firm then expects its dividend to decrease by 5% per year for three years (year 4, 5, 6). Thereafter the dividends will grow at 6% indefinitely. The required rate of return is 12%. What is the value of the stock today? 29.2 32.7 38.6 43.2 None of the above. The firm-level FCF of New Media Inc. is estimated to be $9.8 million. The company has 2.1 million shares outstanding. You also now that the average P/FCF multiple for comparable companies is 12.9. Using a relative valuation approach, what is the estimated price of a share of New Media Inc Stock? $60.20 $93.40 $126.40 $175.10 None of the above. Which one of the following would provide the best indication that a portfolio is being effectively diversified? An increase in the portfolio beta A decrease in the portfolio beta An increase in the portfolio rate of return O A decrease in the portfolio standard deviation None of the above. The payback method: is the amount of time it takes for a project to recoup its profits. is the best method for evaluating complex projects. fails to explicitly consider the time value of money, O is never used by businesses today. None of the above