Prepare a PowerPoint or Prezi Presentation to define the following terms, using graphs or equations to illustrate your answers where feasible. · Risk in general; stand-alone risk; probability distribution and its relation to risk · Expected rate of return, ^r · Continuous probability distribution · Standard deviation, σ; variance, σ2 · Risk aversion; realized rate of return, r · Risk premium for Stock i, RPi; market risk premium, RPM · Capital Asset Pricing Model (CAPM) · Expected return on a portfolio, r^p; market portfolio · Correlation as a concept; correlation coefficient, ρ · Market risk; diversifiable risk; relevant risk · Beta coefficient, b; average stock’s beta · Security Market Line (SML); SML equation · Slope of SML and its relationship to risk aversion · Equilibrium; Efficient Markets Hypothesis (EMH); three forms of EMH · Fama-French three-factor model · Behavioral finance; herding; anchoring

Which of the following statements is correct? large corporations are taxed more favorably than sole proprietorships. corporate stockholders are exposed to unlimited liability. due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of u.s. businesses (in terms of number of businesses) are organized as corporations. most businesses (by number and total dollar sales) are organized as partnerships or proprietorships because it is easier to set up and operate in one of these forms rather than as a corporation. however, if the business gets very large, it becomes advantageous to convert to a corporation, mainly because corporations have important tax advantages over proprietorships and partnerships. most business (measured by dollar sales) is conducted by corporations in spite of large corporations’ often less favorable tax treatment, due to legal considerations related to ownership transfers and limited liability.

Parks corporation is considering an investment proposal in which a working capital investment of $10,000 would be required. the investment would provide cash inflows of $2,000 per year for six years. the working capital would be released for use elsewhere when the project is completed. if the company's discount rate is 10%, the investment's net present value is closest to (ignore income taxes) ?

Acoase solution to a problem of externality ensures that a socially efficient outcome is to