Generally not advantage of going public

Assignment Help Financial Management

Reference no: EM131560318

1. If the one-year forward rate implied by the Interest Rate Parity is F($/£)= 1.20, and the quotation you received from your bank is F($/£)= 1.23, you can take advantage of this arbitrage opportunity by taking a _______position in pound under the one-year forward contract with the bank, and also borrow in ___________to construct the arbitrage portfolio.

A. long; pound

B. long; dollar

C. short; pound

D. short; dollar

2. Which of the following is generally NOT an advantage of going public?

A. Increases the liquidity of the firm's stock.

B. Makes it easier to obtain new equity capital.

C. Establishes a market value for the firm.

D. Makes it easier for owner-managers to engage in profitable self-dealings.

E. Facilitates stockholder diversification.

Reference no: EM131560318

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