Fight Finance

Will you or politely Katya's deal?

(a) Lower yields to maturity.

(b) Higher probabilities of default.

(c) Lower coupon rates when priced at par.

(d) Lower total risk.

(e) Lower credit risk.

(a) $116.25

(b) $74.04

(c) $85.89

(d) $83.75

(e) $71.38

(a) 140,202

(b) 184,280

(c) 184,460

(d) 186,881

(e) 200,000

(a) Short sellers benefit from price falls.

(b) To short sell, you must borrow the asset from person A and sell it to person B, then later on buy an identical asset from person C and return it to person A.

(c) Short selling only works for assets that are 'fungible' which means that there are many that are identical and substitutable, such as shares and bonds and unlike real estate.

(d) An investor who short-sells an asset has a negative weight in that asset.

(e) An investor who short-sells an asset is said to be 'long' that asset.

In a takeover deal where the offer is 100% scrip (shares), the merged firm's number of shares will be equal to the acquirer firm's original number of shares. or ?

(a) 80%, 20%

(b) 60%, 40%

(c) 40%, 60%

(d) 20%, 80%

(e) 20%, 20%

(a) Equity futures prices tend to be higher than spot prices. This is called contango.

(b) Equity futures prices tend to be equal to spot prices.

(c) Equity futures are generally under-priced.

(d) Equity futures are generally over-priced.

(e) Long equity futures traders tend to make more money than short equity futures traders.

(a) Alice buys Alan’s shares using their share brokers and the securities exchange.

(b) Bell buys Bob’s house using his real estate agent.

(c) Carla lends Carlos money at an interest rate of 10% pa for 3 years.

(d) Dora lends money to her bank at 2% pa and the bank lends the funds to David at 5% pa.

(e) Eve buys Ernie’s government bond using their brokers and the securities exchange.

(a) Bank accepted bill (BAB).

(b) Certificate of deposit (CD).

(c) Fixed coupon bond.

(d) Promissory note (PN)

(e) Treasury note or bill.