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What is the mispricing if an Equity Premium exists? Should more bonds or more equity be added to a portfolio? Please provide references.
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- What is the biggest disadvantage to be considered when exploring the option of equity financing versus debt financing?What are the differences between stocks and bonds in terms of predicted future payments? Which sort of investment is regarded to be riskier (stocks or bonds)? Given your knowledge, which investment (stocks or bonds) do you believe is often referred to as "fixed income"?What are the principles of responsible investment and why is ESG important for generating higher investor returns? How will ESG impact bond rating? Is the yield to maturity on a bond the same thing as the required return?
- a. How much is the cost of equity using the capital asset pricing model? b. How much is the cost of equity using the bond plus risk premium?How does equity valuation differ from bond valuation?Duration is important in understanding a fixed income portfolio because A. it is used in the capital asset pricing model B. it measures the interest rate sensitivity of a bonds value C. It measures the correlation with a bank's stock price D. It causes contagion
- How do stocks and bonds differ in terms of the future payments that they are expected to make? Which type of investment (stocks or bonds) is considered to be more risky? Given what you know, which investment (stocks or bonds) do you think commonly goes by the nickname “fixed income”?How would bond convexity be used as a risk-management tool in managing a bond portfolio?What is equity risk premium?
- which of the below has a negative correlation with the return on bonds ? a. Taxability b. Default risk c. Callable bonds d. Liquidity e. DebentureWhich of the following is NOT a defining quality of a standard bond cash flow? a) Coupon b) Maturity c) Perpetuity Cash Flow d) Face ValueExplain the differences between a bond's yield to maturity (YTM) and its yield to call (YTC). Is there a reason why the return to the investor would alter if a bond is called? Please provide justification for your response.
