1, Is the Market Why or why not? What does it mean to say that the Market is (or is ) efficient? If the Market efficient, how do you explain situations like the Crash of 1987 when the value of the market dropped 25% in only one day? If the Market is efficient, what does that mean for investors, and the process of asset valuation?2.You have developed the following data for Asset A and the Market. Assume that the four states of nature include possible states:The rate on T-Bills is 2 percent.Given this information, and assuming that the CAPM holds, should the Asset (A) be added (bought) or sold (in a well-diversified portfolio)?3, What does the CAPM suggest for investors? What value does it hold for Corporate Financial Management, as opposed to investors in individual financial assets (like stocks and bonds)? What does market efficiency suggest about CAPM or ?4, An investor purchased a bond, at par, on the day it was issued. The bond carries a 5 percent coupon, , and has 20 years to maturity.5, A firm I am considering purchasing has $200 thousand in Free Cash Flow projected for next year (2011), $100 thousand in 2012, and that is expected to grow at a constant rate of 4.5% each year after 2012. You have determined that the appropriate discount rate to apply is 13%, based upon the WACC of the firm.6, In estimating the value of a firm, we first estimated the available. Explain the concept of . Why is it different than in valuing the shareholders investment? What is more important (and why), or ? What adjustments did we need to make to to arrive at , and why are those adjustments necessary? Explain your answers in a essay.