1.What is the meaning of stock repurchase. Explain why the stock price of a firm may rise when the firm announces that it is repurchasing its shares. (5marks)

2. Sri Elenaor had just received RM70,000 from an insurance company and decided to keep the money in a commercial bank for nine months with the intention of getting the highest return from the investment. Determine the money market instrument that suits this situation. Explain your answer. (5marks)

3a. Debentures. What are debentures? How do they differ from Mortgage? (5marks)

3b. Assume the following information for an existing bond that provides annual coupon payments: Par value = $1,000, Coupon rate = 11%, Maturity = 4 years & Required rate of return by investors = 11% What is the present value of the bond?