36N. Why the simple concept in finance that a price of a security is present value of the expected cash flows associated with that security may not be applicable to the option pricing? Because the value of an option does not depend on stock price. Because the value of an option depends on security price variance. Because the value of an option depends on market interest rate. Because the value of an option depends on the difference between stock price and striking price (an arbitrary number). 37N. If there are three values of cost of debts rd1, rd2, and rd3. Three values of cost of preferred stocks rp1, rp2, and rp3. Also, there are three values of cost equity, rs, re1 and re2. How many breakpoints are there in MCC schedule? You need not make any calculations to answer this question. 2 4 none of the given 6 38N. If there are three values of cost of debts rd1, rd2, and rd3. Three values of cost of preferred stocks rp1, rp2, and rp3. Also, there are three values of cost equity, rs, re1 and re2. How many MCCs are there on MCC schedule? You need not make any calculations to answer this question. none of the given 6 5 7