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BFB3121 - BFF3121 - Investments and portfolio management - S1 2026

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As a financial analyst, you are tasked with evaluating a capital budgeting project. You were instructed to use the IRR method and you need to determine an appropriate hurdle rate. The risk-free rate is 5% and the expected market rate of return is 10%. Your company has a beta of 0.67 and the project that you are evaluating is considered to have risk equal to the average project that the company has accepted in the past. According to CAPM, the appropriate hurdle rate would be 
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8%, 15-year bond has a yield to maturity of 10% and duration of 8.05 years. 

If

the market yield changes by 25 basis points, how much change will there be in

the bond's price?

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Treasury bill with a par value of $100,000 due two months from now is selling

today for $98,039. 

The effective annual yield of this Treasury bill is,

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The following data are available relating to the performance of Seminole Fund and the market portfolio:

The risk-free return during the sample period was 6%.

Calculate the M2 measure for the Seminole Fund.

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The index model has been estimated for stock A with the following results:

RA,t = 0.01 + 0.80RM,t + eA,and

σM = 0.20; σ(eA) = 0.10.

The standard deviation of the return for stock A is

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You invest $600 in a security with a beta of 1.2 and $400 in another security with a beta of 0.90. The beta of the resulting portfolio is 
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You want to evaluate three mutual funds using the Sharpe measure for performance evaluation. The risk-free return during the sample period is 6%. The average returns, standard deviations, and betas for the three funds together with those for the S&P 500 Index are given below. 

The fund/Index with the highest Sharpe measure is 

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A firm reinvests 60% of its earnings in projects with ROE of 15%. The market capitalization rate is 10%. The expected year-end dividend is $2/share, paid out of earnings of $5/share. 

What is the PVGO?

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Have you finished both

1. Climate Change - Post Module Survey and 

2. Climate Simulation Game ? 

Select "True" if done, select "False" if not.

**If you missed out to do any of the above, the links are open until 26 May 11:55pm. Otherwise, please email us and we can reopen the link for you**

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You purchased a share of stock for $25. One year later, you received $1 as a dividend and sold the share for $29. What was your holding-period return?

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