Order Description
Question 1
Three important functions within Corporate Finance are: The Portfolio Theory efficiency frontier; the Capital Market Line and the Security Market Line. Clearly explain each of these and discuss how
they may be useful for application within management decision-making.
Question 2
The CML and the SML provide similar focuses for investment portfolio management. Either can be used as a benchmark by managers when managing corporate investment portfolios.
Discuss.
Question 3
The Expected Net Present Value model recognizes the possibility of various outcomes. However, it does not provide a fully effective tool for corporate decision-makers operating within a risky
environment. Portfolio theory provides further relevant focuses to aid such decision-making. Discuss
Question 4
‘A corporate decision-maker might use the Capital Asset Pricing Model as a tool. However, to gain the greatest potential from such use, it is important that the decision-maker understands the
model’s limitations.’ Analyze this statement using relevant examples