Fight Finance

(a) $116.25

(b) $74.04

(c) $85.89

(d) $83.75

(e) $71.38

(a) 116

(b) 61

(c) 56

(d) 41

(e) 11

A levered company's required return on debt is always less than its required return on equity. or ?

(a) Pay no income cash flow.

(b) Have a nominal total return of zero.

(c) Have a nominal capital return of zero.

(d) Have a nominal income return of zero.

(e) Have a real total return of zero.

(a) 0.6

(b) 0.319508

(c) 0.269705

(d) 0.245731

(e) 0.219755

If a stock's future expected effective annual returns are log-normally distributed, what will be bigger, the stock's or effective annual return? Or would you expect them to be ?

(a) $1,108.390216

(b) $1,114.640575

(c) $1,123.457853

(d) $1,127.892613

(e) $1,132.344879

(a) immediately after the option purchase date.

(b) After the option matures but only if it is exercised.

(c) After the option matures but only if it lapses and is not exercised.

(d) After the option matures, regardless of whether it is exercised or not.

(e) The option price is never a sunk cost.

(a) The option’s expected future continuously compounded returns are always more than or equal to the underlying stock’s expected future continuously compounded returns.

(b) The option’s standard deviation of dollar price changes is always less than or equal to the underlying stock’s standard deviation of dollar price changes.

(c) The option’s standard deviation of continuously compounded returns are always less than or equal to the underlying stock’s standard deviation of continuously compounded returns.

(d) As time elapses and the maturity date of an option approaches, its price will fall, all other things remaining equal.

(e) If the underlying stock’s price rises by $0.01, the call option’s price will rise by less than $0.01 and the put option’s price will fall by less than $0.01.

(a) Americans

(b) Chinese

(c) Japanese

(d) Germans

(e) Norwegians