1. What are the three pillars of DFA's business strategy?
2. In the framework of trade-off theory, do you think Amazon has too much debt? Can you increase Amazon’s value by changing its capital structure? Hint: think about whether Amazon can service its current debt? To find related information, you can use the same source (MSN Money) and go to the “Analysis” tab.
3. The real risk-free rate is 2%, and inflation is expected to be 2% for the next 2 years. A 2-year Treasury security yields 5.4%. What is the maturity risk premium for the 2-year security?
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