8 What exists between industries in a value chain (circle all that apply) ?

(A) Bond markets

(B) Markets for initial public offerings

(C) Equity markets

(D) Markets setting the price of a product supplied to the next

Industry in the chain

9 If you are run a manufacturing plant that buys rare earth metals to make semiconductors. Are you long or short rare earth metals ?

(A) Long

(B) Short

(C) Both

(D) Neither

10 If you are long something, in order to hedge what should you do ?

(A) Go long something else

(B) Go short something else

11 Your company is considering purchasing another company for $10 million. The present value of the cash flow from the company is projected by your staff to be $9 million. You believe you can even further improve the profitability of the company buy reducing the annual costs of the company by $1 million per year for the next 10 years. You have alternative investments available to you that earn 10% returns. What is the NPV of

this purchase?