21) 21) LMN, Co. and XYZ Enterprises are both manufacturers of plastic products. These two firms have decided to work together to find a more efficient way to recycle rejected products. Thus, the two companies are each going to assign two engineers to this project and have agreed to share any and all costs. This project is an example of a A) Strategic alliance B) Merged alliance C) Joint venture D) Consolidation E) Takeover project 22) 22) Long-run exposure to exchange rate risk relates to: A) Daily variations in exchange rates. B) Differences between future spot rates and related forward rates. C) Unexpected changes in relative economic conditions. D) Accounting gains and losses created by fluctuating exchange rates. E) Variances between spot and future rates. 25) 23) ABC stock is selling for $43 a share. A 6-month call on this stock with a strike price of $45 is priced at $.30. Risk-free assets are currently returning. 18 percent per month What is the price of a 6-month put on this stock with a strike price of $45? A) $1.29 B) $1.70 C) $1.49 D) $1.99 E ) $1.82 24) 24) Assume a risk-free asset in the U.S. is currently yielding 2.7 percent while a Canadian risk-free asset is yielding 2.8 percent and the current spot rate is Can$.8829 =$1. What is the approximate 6-month forward rate if interest rate parity holds? A) CanS.8843 B) Can$.8839 C) Can.8850 D) CanS.8825 E) CanS.8833 25) 25) ABC's and CMU are all-equity firms, ABC's has 2,500 shares outstanding at a market price of $16.70 a share. CMU has 3,000 shares outstanding at a price of $22.50 a share. CMU is acquiring ABC's for $45,000 in cash. What is the merger premium per share? A) $1.30 B) S. 32 C ) SO D) $1.11 E) $1.28