Statements are true about when issued trading

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Reference no: EM132025432

1. Which of the following statements are true about when issued trading?

A) It takes place before an auction

B) It provides an efficient means of price discovery

C) It is a forward contract

D) All of the above

2. Project S costs $19,000 and it's expected cash flows would be $6500 per year for 5 years. Mutually exclusive Project L costs $42,500 and it's expected cash flows would be $13,200 per year for 5 years. If both projects have a WACC of 15%, which project would you recommend?

a. Project L, since NPVL > NPVs

b. Both projects S and L, since both projects have IRR's > 0.

c. Both projects S and L, since both projects have NPVs > 0.

d. Project S, since the NPVs > NPVL

e. Neither project S nor L, since each project NPV < 0.

3. SHOW CLEAR WORK ON EXCEL

A fully amortizing mortgage is made for $80,000 for 25 years. Total monthly payments will be $900 per month. What is the interest rate on the loan?

Reference no: EM132025432

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