Please give concise answers in 4 to 5 sentences for the given questions.
Problem 1) Would you ever use CAPM to make personal investment decisions?
Problem 2) What is your personal discount rate or rate of preferences? i.e. how much would you pay for a promise of $1000 to be received one year from now? Would you discount it by 10%, 5%, etc?
Problem 3) How accurate do you think a company's estimates of the net present value of a proposed project are?
Problem 4) Many of the small "dot-com" companies got financing in the form of an instrument called convertible debt. This is like ordinary debt, in that it pays a regular interest amount. But debtholders have the right to convert it to equity.
Why do you think these companies chose this instrument? Do you think it was a good idea?