Suggested Questions for Strategic Capital Management

1. What are the costs/benefits of investing in a hedge fund (answer based on related readings)?
2. What is the current stock market valuation of Creative Computers and of Ubid based on the stock
prices as of December 9? As stock market valuation reflects assets in place plus growth
opportunities, estimate the market’s assessment of the growth opportunities of each firm.
(Remember that balance sheets have to balance). Are these assessments reasonable?
3. What should Elena do? Buy Creative Computers? Buy Ubid? Buy both Creative Computers and Ubid?
Is there some other investment strategy involving Creative Computers and Ubid that you would
suggest? (Use what you learnt hedge fund strategies from the above readings)
4. What are the risks associated with this strategy?