Reference no: EM132546727
Question B1: Under the expectation hypothesis, if the yield curve is upward-sloping, the market must expect an increase in short-term interest rates. True/False/Uncertain?
Question B2: Explain how an increase in dividend payout would affect each of the following (holding all other factors constant): a) Sustainable growth rate b) Growth in book value
Question B3: What is the differences in cash flow between short-selling an asset and entering a short futures position?
Question B4: What is another name for unsystematic risk and why does it have that name?
Question B5: What are the P/E effect and Momentum effect considered efficient market anomalies? Are there rational explanations for any of these effects?
Question B6: Briefly explain what is the Spot-Futures Parity Theorem and how Arbitrage Possibilities can be exploited when this theorem is not valid.
Question B7: What are the trade-offs facing an investor who is considering buying a put option on an existing portfolio ?
Question B8: Explain each of the determinants of the value of a call option? Is there a positive or negative relationship between this determinant and the value of a call option?
Question B9: What are the implications for investing if a market is semi-strong-form efficient? What can you not do in a semi-strong-form efficient market?
Explain the disadvantages of a standard costing system
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