Questions: 1. What are some of the limitations of the payback method and how are these addressed by the net present value (NPV) method?
2. Identify the factors used to calculate present and future cash flows.
3. Distinguish between the annual percentage rate and effective annual rate, and how each is used in financial decision making.
4. Describe the various types of annuities and how they are calculated.
5. If you hold a large portfolio of corporate bonds and you wake up one morning to learn that interest rates have risen unexpectedly, are you concerned? If so, why? If not, why not?
6. Understand the relationship between interest rates and bond values.
7. Review how time to maturity and the coupon rate affect interest rate risk
8. Compare and contrast the characteristics of zero coupon bonds, government bonds and corporate bonds.
9. Describe the difference between real and nominal rates.
10. The total return on a particular stock consists of both the dividend yield and the capital gain. Does it matter in what form an investor earns his/her return? Are there some instances where investors might be very particular regarding the composition of the total return i.e. how much is from dividends and how much is from capital appreciation?
11. Describe how capital gains and dividend growth affect stock prices.
12. Review how the price-to-earnings ratio and enterprise value ratios are used to compare stock values.
13. Understand how the NYSE and NASDAQ are organized and operate.
Answer each question in 200 or more words.
Use citations and references.
Use APA guidelines please.