1. Historically, Stocks have returned more than bonds and cash. What is the likely reason for the return differences between cash, fixed income, and equities?
2. Compare and contrast mutual funds and hedge funds (clients, risk, minimum investment, etc.). Give an example of a provider of each fund. Why might you not presently be a hedge fund client?
3. Link the definitions of NOPAT and FCF. Invoking extreme simplicity, how would you describe NOPAT to a colleague? How would you map FCF with respect to NOPAT, net fixed asset investment, and net working capital?