Reference no: EM13749056

Question 1: What is something you believe you can do better or understand substantially better than most people? (Something productive/mildly related to the world please, no balancing on 2 fingers)

Question 2: What is the most important cornerstone to successful investing?

Question 3: On the day of Alibaba's IPO, September 19, 2014, the S&P 500 moved down 0.96 points, why?

Question 4: Seeing that you have some knowledge of the business world, your friend comes to you for an investment advice. Your friend asks "Based on the projected economic trends, should I be long or short the S&P 500 in the next 12-month period?" What is your answer to your friend?

Question 5: Stock A has a beta of 2 and trades at $10. Stock B has a beta of 0.5 and trades at $50. Both stocks are worth $55. Which stock is risker?

Question 6: What is the most important determinant of return? In other words, if you are searching for higher returns, what should you do?

Question 7: Looking at the model below, point out a major strategic mistake the management has been making. As a background, the average enterprise makes roughly 12% return on invested capital, which is reasonably the same rate that investors use as a discount rate in valuing businesses.

	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014
Minket share	30.0%	31.5%	33.0%	34.5%	36.0%	37.5%	39.0%	40.5%	42.0%	43.5%	45.0%
Revenue	600	643	687	732	779	828	878	930	984	1040	1097
COGS	360	386	412	439	468	497	527	558	591	624	658
Gross profit	240	257	275	293	312	331	351	372	394	416	439
SG&A	72	77	82	88	94	99	105	112	118	125	132
R&D	36	39	41	44	47	50	53	56	59	62	66
Operating profit	132	141	151	161	171	182	193	205	217	229	241
Interest expense	0	0	0	0	0	0	0	5	5	10	15
Pretax income	132	141	151	161	171	182	193	200	212	219	226
Tax proNision (20,0)	26	28	30	32	34	36	39	40	42	44	45
Net income	106	113	121	129	137	146	155	160	169	175	181
Shares outstanding	100	100	100	100	100	100	100	100	100	100	100
Earnings per share	S1.06	$1.13	$1.21	S1.29	S1.37	$1.46	$1.55	S1.60	S1.69	S1.75	$1.81
Cument assets	150	203	261	325	396	475	564	664	778	908	1059
Cuttent liabtlities	100	135	174	217	264	31'	3"6	443	518	605	706
Working capital	50	63	87	108	132	15S	1SS	221	259	303	353
PP&E	200	271	348	434	528	634	752	885	1037	1210	1412
Total operating assets	250	338	435	542	661	792	940	1107	1296	1513	1765
Current assets	150	203	261	325	396	475	564	664	778	908	1059
PP&E	200	271	348	434	528	634	752	885	1037	1210	1412
Intangibles	0	0	0	0	0	0	0	0	0	0	0
Total assets	350	473	609	759	925	1109	1316	1549	1814	2118	2472
Current hataities	100	135	174	217	264	317	376	443	518	605	706
Total debt	0	0	0	0	0	0	0	50	50	100	150
Total liabilities	100	135	174	217	264	317	376	493	568	705	856
Shareholder's equity	250	338	435	542	661	792	940	1057	1246	1413	1615