1. You purchased a stock and have now reached the end of your holding period. All else the same, with respect to the discount rate the market applies now to this stock's expected cash flows, you prefer it to be:

a) high

b) low

c) depends on the discount rate at the time of your purchase

2. S.I.D. Investment Company is an open-end mutual fund which owns shares in Farm Fresh Foods. Jim Beam is an investor in S.I.D. Which of the following is usually not taxed?

1. Farm Freshs revenue less its operating and financing costs
2. SIDs dividends that it receives from Farm Fresh Foods
3. Jims dividends received from S.I.D.

a) A

b) B

c) C

d) A & B

e) A & C

f) B & C