1. ABC Inc. repurchased 30 percent of its outstanding common stock from the open (secondary) market. What are the results from this activity?
   1. A decrease in total assets.
   2. A decline in earnings per share.
   3. An increase in cash.
   4. The number of stockholders would remain the same as a result of the preemptive right.
2. Hiral is considering the following AA rated bonds. Which of these has the most interest rate risk?
   1. A 10-year bond with a 4% coupon.
   2. A 10-year bond with a 3% coupon.
   3. A 15-year bond with a 3% coupon.
   4. A 20-year bond with a 3% coupon.
3. Which of the following is correct regarding a bonds YTM?
   1. The YTM is higher than the coupon rate when the bond is trading below $1,000.
   2. The rate that equates the future cash flows to the price of the bond, assuming the coupon payments are reinvested at the coupon rate.
   3. The YTM will equal the coupon rate if the par value of the bond equals $1,000.
   4. The YTM is always higher than or equal to the coupon rate.