Answer these questions succinctly but carefully and completely. Avoid cut-and-paste. Use your own words. Your answers should reflect, thoughtfully and knowledgeably, on the key learning points to date. When a judgment is asked for, make it. Incorporate material as necessary from Weeks 1-4 and Wk5: this is a cumulative take-home exam. The questions are equal-weighted, 20 points each.

1-Discuss on one page or less the mean-variance metrics associated with Markowitz as a risk management tool. To do that, listen carefully to the Taleb video where he refers to mean-variance nonsense. Explain what he means by this. Recall and comment about what you learned in Wk 3 about Markowitz.

2-Compare and contrast the characteristic line and the security market line and then discuss the practical significance of the capital asset pricing model, defining your terms as you go. One-page limit.

3-Your boss pays for your HCMBA so she feels justified in asking you to make a presentation about the Dodd-Frank legislation and rules at the company retreat. She wants you take a definite position about whether it has succeeded or failed, and lead a debate about it. To prepare, list the meaning of five key aspects of Dodd-Frank to frame the discussion, and examine articles you have read (especially Item #11 compendium in the Wk5 Contents about GE Capital, Metlife, Goldman, JP Morgan) to determine and justify your position. What are pros and cons of reinstating the Glass-Steagle Act? One-page limit.

4-Your boss asks you to write a short but pithy essay for publication on your companys employee pension plan website. She recalls an old Oldsmobile TV commercial touting the new designs as not your fathers Oldsmobile, suggesting that you explain to your colleagues who must make investment decisions that the 2015 financial markets are not your fathers financial markets. Explain why she thinks this way and advise your colleagues about why or why not it may matter to them. Be guided by articles you read so far in this course. One-page limit.

5-Some airlines hedge jet fuel prices and some do not. When oil prices declined earlier this year, some airlines that had hedged jet fuel prices were worse off than those that did not hedge. Using a numerical example, show your understanding of hedging by explaining why they were worse off. Explain whether or not this situation an argument against hedging? One-half page limit.