1. What is capital market?

2. Name a few major stock indices in the U.S. (Example: Russell 2000 index) Describe what they represent (Example: Russell 2000 represent 2000 small stocks) and what type of weights they use in estimation of the index (Example: Russell 2000 is a value-weighted index). Are there any ETFs that represent these indices? (Example: IWM is one ETF for Russell 2000).

3. Name some major bond indices in the U.S. What are their ETF? (This is similar to Q2 but for bonds and not equity (Stocks)). See page 369.

4. Name a few major sector and their ETFs. (Example: Energy Sector, one ETF that represents energy sector is XLE)

5. Name a couple of volatility ETFs. Is there a relationship between market price and volatility?

6. Choose one stock index (or one sector index) and one bond index. Go to yahoo/Finance and download 5 years of monthly data into your Excel for each stock index (Sector index) and bond index. Calculate the monthly rate of return (P1-P0/P0) for stock and bond index in your Excel. Compare the average return of your stock index ( Or sector index if you chose a sector index and not a stock index) with the average return of your bond index. Finally estimate the correlation of returns between bond index with stock or sector index over the past 5 years. (In Excel you can easily find the correlation of returns by using the CORREL function).

Notes: We have many sectors with many ETFs that represent these sectors. For example S&P 500 index is represented by the following ETFs: SPY, IVV, VOO. We also have too many bond index like: long term government bond index, 10-year bond index, 5 year bond index, Treasury Bill index, Long term, short term, intermediate corporate bond index, inflation protected bond index, Junk bond index, Sovereign bond index, .