18. Which of the following unrelated statement/s is/are true?

I.The bears in the saying "The bulls make money,the bears make money,the pigs get slaughtered"make money by shorting

II.If a borrower has been faithful in paying its coupon payments but unintentionally breached a covenant,then the borrower is in technical default

III.Cash dividend payments on preferred stocks should be declared and approved by the companys board of directors

IV.If Ayala Corp stock has a beta coefficient of 0.7 and the PSEi went up by 3%, then Ayala Corp stock will go up by 2.1%

a. II only

b. I only

c. IV only

d. I, II, III & IV

19. Which of the following unrelated statement/s is/are true?

I.The beta coefficient of a stock is always compared to the movements of a market index

II. By virtue of the tax deductibility of debt, a firm that has some level of debt would pay more tax in absolute/ monetary terms than a firm that does not have any debt given the same tax rate

III. If a Philippine stock has a beta coefficient of 1.65 and the risk- free return is 2.9%, the required rate of return on the stock is 22.70% if the stock market return is 12%.

IV.If one wants to buy an entire business, then he has to pay the market cap of the target business.

a. I only

b. IV only

c. I & III

d. III & IV