Which of the following is most closely linked to interest rate risk?

1. market risk
2. liquidity risk
3. Inflation risk
4. Business risk

What is the importance of indifference curves for an investor?

A. They are a necessary step in moving from the CML to defining the SML

B. They help determine which portfolio an investor will choose from the efficient frontier

C. They define the opportunity set of possible risk and return combinations for all investors

Which type of model does not require an analyst forecast a firm's cash flows?

A. DCF models

B. Price multiple models

C. Relative value models

Assume a firm has a required rate of return of 12%. The firm will pay a dividend one year from now c410 of $2.40. Dividends will grow at 5% forever. The intrinsic value of this stock as of the beginning of year 4, meaning immediately after the year 3 divided has been paid, is closest to

1. 34.29
2. 36.17
3. 39.69
4. 41.67