Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Question 3
a) What is the similarity between the internal rate of retum of a project and the yield-to-maturity
of a bond?
b) "If a stock had high returns so far, it will have low returns in the future". Discuss whether this
statement is true or false, based on the knowledge of the different theories and models out
there.
c) A salt sprinkler manufacturer considers making an investment in a ball-point pen factory.
Explain how you would evaluate this investment project and discuss the appropriate discount
rate to use.
d) Explain how you could eam a positive retum by following a momentum strategy.
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