1. Critically discuss the merits and limitations of the Discounted Cash Flow, Dividend Discount and Residual Income valuation models, both from the theoretical and practical perspectives. In your answer you are expected to demonstrate familiarity with the relevant literature.

2. Consider a mutual fund with $500 million in assets at the start of the year and 12 million shares outstanding. If the gross return on assets is 21% and the total expense ratio is 3% of the year-end value, what is the rate of return on the fund?

3. Suppose you bought one S&P 500 index futures contract when futures price was 1,600. The contract multiplier is $250. If the futures price becomes 1628 today, what' is your profit? If a loss, report a negative number. (margin of error: +/- 1 percent)