1. (2 marks) Provide a discussion on the similarities and differences of two companies: China Petroleum & Chemical and Alibaba. Minimum four key points for full marks. Hints: students may consider the following when attempting this question. • What services/products each company offers? • Which industry the company operates in? • Where their stocks are listed? • Where the company is found? Do not forget to cite the source of information. Referencing (Chicago 17B referencing) is mandatory. 2. (8 marks) Calculate the return and risk (standard deviation) of each stock. 3. (2 marks) Explain the relation (positive or negative) between risk and return based on your answers in the previous question. 4. (4 marks) Calculate the correlation coefficient between (1) Amazon and Alibaba, and (2) Amazon and China Petroleum & Chemical. 5. (3 marks) Calculate the expected (annual) return and standard deviation if you owned a portfolio consisting of 50% in Amazon and 50% in Alibaba. 6. (3 marks) Calculate the expected (annual) return and standard deviation if you owned a portfolio consisting of 80% in Amazon and 20% in China Petroleum. 7. (3 marks) Compare the portfolios in parts 5 or 6. Which portfolio (parts 5 or 6) provides better diversification? Define diversification and explain your answer(s).

5 List name of payer 6. Add the amounts on line 5. Enter the total here and on Form 1040 or 1040-SR, line 3b

7 a At any time during 2021, did you have a financial interest in or signature authority over a financial account (such as a bank account, securities account, or brokerage account) located in a foreign country? See instructions.. If "Yes," are you required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), to report that financial interest or signature authority? See FinCEN Form 114 and its instructions for filing requirements and exceptions to those requirements ..... b If you are required to file FinCEN Form 114, enter the name of the foreign country where the financial account is located 8 During 2021, did you receive a distribution from, or were you the grantor of, or transferor to, a foreign trust? If "Yes," you may have to file Form 3520. See instructions.

Your firm is considering manufacturing a new product. The equipment necessary to manufacture this item costs $800,000. The equipment has a life of eight years and straight-line depreciation will be used (with zero salvage value). The firm's tax rate is 30% and the required rate of return on this risky project is 12%. Fixed costs are expected to be $130,000 per year and variable costs are expected to be 30% of sales. Assume also that after the first year sales are expected to grow at a 5% rate per year. What is the year 1 sales revenue that the firm needs to achieve to break-even? Please show all your work and round to 0 decimal places.

Hydro-Québec is considering introducing a new power generator. The initial cost is $850,000, and it will have a life of 12 years. The power generator will be depreciated with a CCA rate of 20% and it is expected to be sold at $200,000 at the end of the 12th year. Sales revenues from the new power generator are expected to be $80,000 per year. Variable costs will be 15% of sales revenue and fixed costs are expected to be $16,000 per year. The firm also needs to invest $20,000 in net working capital at the beginning of the project, which will be recovered when the project ends. $10,000 has been spent in the last month projecting the profitability of the new power generator. Assume that the tax rate is 40% and the discount rate is 10%. Compute the NPV of the project and decide if Hydro-Québec should accept or reject the project. Please show all your work and round to 0 decimal places.

As the winner of the Housecleaners sweepstakes, you are entitled to one of the following prizes: A. $999,999 immediately. B. $100,000 per year forever, starting next year. C. $180,000 per year for 10 years starting immediately. D. $300,000 payable every 2 years over 20 years (first payment to occur 2 years from today). E. $39,000 starting next year growing by 6% forever. In terms of present values, which prize should be chosen if r = 9%? Please show all your work for each of the above and round to 0 decimal places.

The Capital Budgeting Decision 1. What are the relevant cashflows?

Question 3: Today you bought 100 shares of Merck (MRK) at $100 per share. A year from now MRK will pay a dividend of $2 per share for sure. The price of MRK a year from now is uncertain and depends on the state of the economy. A year from now the economy will either be in a recession, a state of "normal" growth, or a boom with probabilities of 30%, 40%, and 30% respectively. After analyzing MRK you determine that the price of MRK a year from now in these various states of the economy will be: What is the expected return over the next year to your investment in MRK? What is the standard deviation of that return?

9: The Cash Flow Statement 9.4: Analysing cash flow statements Analyse the three blocks of the cash flow statement of Ferrari and Marks & Spencer. Marks and Spencer (Retailer with Negative OWCR) ISIN Number GB0031274896 . . . Page 94 Cash flow Cash flow statement is on page: F9 Ferrari . ISIN NL0011585146 • Page 206 (pdf) Cash flow Analyze the three different blocks of the Cash-Flow segment of Ferrari in 2018-2019 (closed in December) and of Mark & Spencer in 2018-2019 (closed in March) and comment their operational performance and their Free Cash Flow. Using only the last year (2019), comment the consistency of each part of the cash flow statement with the income statement (for example the EBITDA and the Operational Cash Flow) and balance sheet (for example the variation of cash). What additional information does the cash flow statement provide with respect to the balance sheet and income statement?

2. Evaluate the project by calculating the possible investment rules.