41. Risk is best judged in
(A) portfolio context
(B) individual security context
(C) both of these
(D) none of these
42. In a well-functioning markets two investments that offer the same payoff must have the same
(A) beta
(B) return
(C) risk
(D) price
43. The mixture of debt and equity, used to finance a corporation is also known as
(A) capital structure
(B) capital budgeting
(C) investing
(D) treasury
44. The present value of $100 expected in two years from today at a discount rate of 5% is
(A) $105
(B) $110.7
(C) $95
(D) $90.7
45. What will be value of $100 after two years, if the interest rate during this period is 5%?
(A) $105
(B) $107.5
(C) $110.25
(D) $95
(A) levered equity
(B) unlevered equity
(C) both levered and unlevered
(D) bond equity
(A) Borrowing is not a good idea in this case
(B) No difference who (firm or shareholders) borrows
(C) It is better that the firm borrows
(D) It is better that the shareholders borrow
48. Corporations can return cash to their shareholders by
(A) paying cash dividends
(B) stock repurchase
(C) both A and B
(D) none of these
49. Which from the following is true about stock repurchases?
(A) Repurchases are more flexible
(B) Repurchases are tax-advantaged
(C) both A and B
(D) none of these
50. What should be the goal of a corporation?
(A) to maximize the profit of the shareholders
(B) to maximize the value of the corporation
(C) both A and B
(D) to take care of the interests of the management