1) Utilize the suitable example to show the facilitation of flow of funds by mortgage markets. What made Google’s IPO unique? Describe.
2) Do you think secondary stock offerings send positive or negative signals about firm whose stock is being offered? Explain why?
3) Explain the factors which affect stock prices. Which of these factors are important now? Describe why? Futures are measured risky investments. Are there any elements of institutional trading, structure and trading in common that lead to this conclusion?
4) Suppose the following information over a 5-year period.
Average risk-free rate 7%
Average return for C stock 12%
Average return for L stock 15%
Standard deviation for C stock returns 1.5%
Standard deviation of L stock returns 5%
Beta of C stock 0.8
Beta of L stock 1.1
Find out which stock has higher risk-adjusted returns according to Sharpe index. Which stock has higher returns by using the Treynor Method?