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NEW QUESTION: 1
Amie Lear, CFA, is a quantitative analyst employed by a brokerage firm. She has been assigned by her supervisor to cover a number of different equity and debt investments. One of the investments is Taylor, Inc. (Taylor), a manufacturer of a wide range of children's toys. Based on her extensive analysis, she determines that her expected return on the stock, given Taylor's risks, is 10%. In applying the capital asset pricing model (CAPM), the result is a 12% rate of return.
For her analysis of the returns of Devon, Inc. (Devon), a manufacturer of high-end sports apparel, Lear intends to use the Fama-French model (FFM). Devon is a small-cap growth stock that has traded at a low market-to-book value in recent years. Lear's analysis has provided a wealth of quantitative information to consider. The return on a value-weighted market index minus the risk-free rate is 5.5%, the small-cap return premium is 3.1%, the value return premium is 2.2%, and the liquidity premium is 3.3%. The risk-free rate is 3.4%. The market, size, relative value, and liquidity betas for Devon are 0.7, -0.3, 1.4, and 1.2, respectively. In estimating the appropriate equity risk premium, Lear has chosen to use the Gordon growth model.
Lear's assistant, Doug Saunders, presents her with a report on macroeconomic multifactor models that includes the following two statements:
Statement 1: Business cycle risk represents the unexpected change in the difference between the return of risky corporate bonds and government bonds.
Statement 2: Confidence risk represents the unexpected change in the level of real business activity.
Lear is also attempting to determine the most appropriate method for determining the required return for Densmore, Inc. (Densmore), a closely held company that is considering a debt issue within the next year.
The company has not previously issued debt securities to the public, relying instead on bank financing.
She realizes that there are a number of models to consider, including the CAPM, multifactor models, and build-up models.
Lear's choice of the Gordon growth model is an example of which of the following types of estimates of the equity risk premium?
A. Forward-looking estimate.
B. Historical estimate.
C. Macroeconomic model estimate.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
The Gordon growth model is a popular method to generate forward-looking estimates using current information and expectations concerning economic and financial variables.
A historical estimate of the equity risk premium consists of the difference between the historical mean return for a broad-based equity market index and a risk-free rate over a given time period.
A macroeconomic model estimate of the equity risk premium is based on the relationships between macroeconomic variables and financial variables. (Study Session 10, LOS 35.b, c, d)

NEW QUESTION: 2
Senior IT leadership wants information to help determine workload placement and tradeoffs between buying new hardware or using a public cloud provider.
What VMware product provides that information?
A. vCenter Configuration Manager
B. vCenter Operations Manager
C. vCenter Chargeback
D. IT Business Management
Answer: D

NEW QUESTION: 3
You recently created a global option set with the values North, South, and West.
The global option set values should always remain the same.
You need to add an option set to an entity with the values North, South, West, and East.
What should you do?
A. Create an option set for the entity. Add the values North, Sooth. West, and East to it.
B. Create an option set field for the entity that uses the global option set and set the field type to calculated. Add an action that adds East as a value to the option set when the form loads.
C. Create an option set field for the entity that uses the global option set. Set the default value for the entity option set to East.
D. Create an option set field for the entity that uses the global option set. Add the value East to the entity option set.
Answer: D

NEW QUESTION: 4
Installation of AppInternals agent software in a Windows environment requires access rights associated with:
A. AppInternals console
B. VMware ESXi
C. Windows user
D. Windows administrator
Answer: D
Explanation:
Explanation/Reference:
Reference: https://support.riverbed.com/bin/support/static/4ssb9o87q6dv6c436qs8b5rfqq/html/ l6cdgv2q8tkeeab3ed7g4ntpu/Panorama/Installation/Installation.pdf