a ANSWER: RATIONALE:Solution:Endingprice=$27.50(1.6393)=$45.08 HPR=($45.08-$25+$3.19)/$25=0.9308or93.08% premiumof4.04% premiumof3.98% premiumof3.91% discountof3.89% b ANSWER: RATIONALE:Solution:Premium=[(0.00717-0.00703)/0.00703](12/6)=0.0398 a.61.67% b.-19.17% c.21.67% d.6.17% a ANSWER: Whichofthefollowingreflect(reflects)theimplicationsofincometaxesforfinancialmanagers: Interestpaymentsondebtincurredbythefirmarenottaxdeductibleforthefirm. OnlystatementIiscorrect. OnlystatementIIiscorrect. BothstatementsIandIIarecorrect. NeitherstatementInorIIiscorrect. d ANSWER: Savingsandloanassociationsareconsidered: commercialbanks investmentcompanies thriftinstitutions loansharks c ANSWER: Whichofthefollowingiscorrectregardingtheformsofmarketefficiency? I.Inanefficientcapitalmarketstockpricesprovideanunbiasedestimateofthetruevalueofanenterprise.
ANSWER: a RATIONALE:Solution:Endingprice=$27.50(1.6393)=$45.08 HPR=($45.08-$25+$3.19)/$25=0.9308or93.08% premiumof4.04% premiumof3.98% premiumof3.91% discountof3.89% ANSWER: b RATIONALE:Solution:Premium=[(0.00717-0.00703)/0.00703](12/6)=0.0398 a.61.67% b.-19.17% c.21.67% d.6.17% ANSWER: a Whichofthefollowingreflect(reflects)theimplicationsofincometaxesforfinancialmanagers: Interestpaymentsondebtincurredbythefirmarenottaxdeductibleforthefirm. OnlystatementIiscorrect. OnlystatementIIiscorrect. BothstatementsIandIIarecorrect. NeitherstatementInorIIiscorrect. ANSWER: d Savingsandloanassociationsareconsidered: commercialbanks investmentcompanies thriftinstitutions loansharks ANSWER: c Whichofthefollowingiscorrectregardingtheformsofmarketefficiency? I.Inanefficientcapitalmarketstockpricesprovideanunbiasedestimateofthetruevalueofanenterprise.