A$.$PROBLEMS. $1.$ We have a stock Bottine and Despotakis $($B&D$)$ which we buy for $$10.$ We keep it for $6$ years at which point we sell it for $$25.$ During the six year period, it pays us $$12($payable as $$2$ at the end of every year$)$ which we reinvest at $5\%$ annual return. Calculate the rate of return we make per annum in the total investment. $2.$ We have the following information. We have two companies we are considering. They are Anthony and Ben and their betas are $1$ and $1\mathrm{.}4,$ respectively. The T bond rate is $\mathrm{.}02$ and the rate of return in the market is $\mathrm{.}12.$ The debt rates of the two firms are $\mathrm{.}30$ and $\mathrm{.}60$ in order we have mentioned them. Finally, their tax rates are $\mathrm{.}25$ and $\mathrm{.}40,$ respectively. Compute their cost of equity. If they each pay $$4$ and their growth rate is $\mathrm{.}01,$ what are their prices? Expound on the differences, and in which one you would invest and why. $$ B$.$ ESSAYS $1.$ Expound on the determinants of beta. $2.$ Discuss systematic versus unsystematic risk. Give examples of each. Which one is more important and why? $3$ There are a few specific return objectives, such as capital preservation and current income.. Use each and apply it to a person with different ages and wealth. Be thorough. $4.$ Do the same as in $3$ above for capital appreciation and total return. $*5.$ Create an IPS for $2$ of your clients. Jill is $25$ years old and she has $$40,000$ and her income is $$55,000.$ Joe has $$40$ million, has an income of $$100,000$ and has an age of $45.$ Both have medium risk. Jill wants capital appreciation. Joe wants capital preservation. Pay particular attention to the concept of return, age and time horizon of the two individuals. Explicate how you would invest their money and why. $6.$ What are the factors influencing the risk premium? $7.$ Explicate the appropriate asset allocation during the life cycle. $8.$ Explicate how the investment constraints affect one$$s decision making. Include tax concerns and liquidity $9.$ Discuss the $2$ constraints of investments of time horizon and regulatory$/$legal reasons. $10.$ Elaborate on the two objectives of return and risk. You do not need to repeat the details of questions three and four.