1. Explain the difference between a yield that is based on cost, as opposed to one that is based on current market value. What would be the different uses of both?
2. In a world where there’s a risk-free asset available in addition to other risky assets, what is the significance of the tangency portfolio (i.e. why do we care so much about it)?
3. There are many ways to segment a market, but not all segmentations are effective. Explain the five requirements for effective market segmentation.