The pure expectations theory predicts

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Reference no: EM131985297

1. The shareholders of XYZ Company have cumulative voting rights. The company is planning to elect 3 directors. You are one of the candidates. If you have 1,000 shares, how many votes can you cast for yourself?

A. None – you cannot vote for yourself.

B. 1 vote

C. 1,000 votes

D. 3,000 votes

E. None of the above

2. If the expected path of one-year interest rates over the next five years is 2 percent, 4 percent, 1 percent, 4 percent, and 3 percent, then the pure expectations theory predicts that the bond with the highest interest rate today is the one with a maturity of?:

A) 4 years

B) 3 years

C) 2 years

D) 5 years

E) 1 year

Reference no: EM131985297

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