a) In the context of an IPO, what do the terms "underpricing" and "money left on the table" imply? (5 marks) b) What will be the EAR on a $125,000 mortgage loan that has an interest rate of 6% per annum and is taken with 2 discount points? Assume that the borrower will not prepay the loan. The term of the loan is 30 years. (5 marks) c) You observe the following FOREX quotes: Yen 80/$ $0.5/SF \$0.5/SF What is the cross rate between Yen and SF (2 marks) d) What effect would be reducing income tax rates have on the interest rates of municipal bonds? Would interest rates of Treasury securities be affected and if so, how? (3 marks) a) In the context of an IPO, what do the terms "underpricing" and "money left on the table" imply? (5 marks) b) What will be the EAR on a $125,000 mortgage loan that has an interest rate of 6% per annum and is taken with 2 discount points? Assume that the borrower will not prepay the loan. The term of the loan is 30 years. (5 marks) c) You observe the following FOREX quotes: Yen 80/$ $0.5/SF \$0.5/SF What is the cross rate between Yen and SF (2 marks) d) What effect would be reducing income tax rates have on the interest rates of municipal bonds? Would interest rates of Treasury securities be affected and if so, how