1. Explain the challenges of investment in foreign companies. Be sure to mention their economy, political climate and exchange rate.
2. Assume that the CAPM holds. One stock has an expected return of 9% and a beta of 0.3. Another stock has an expected return of 13% and a beta of 1.5. What is the expected return on the market?
3. Bonds are issued by the Treasury, corporations, and municipalities. What are some common characteristics of these bonds and what are their differences? (risk, taxes, purpose for issue, how they are repaid)