As volatility of the underlying asset increases, the value of an option falls.

A). True

B). False

Smart Corporations return on equity is 12% and its earning retention ratio is 60%. The

sustainable growth rate of the firms earning and dividends should be:

A). 6%

B). 7%

C). 8%

D). 9%

E). 10%

Hints: G = ROE x Retention Ratio