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Assist me please Thanks 35. For a Treasury Bill, the BYE [(F-P)/P)/t where t = x/365] a) assumes compounding within a year b) assumes simple

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35. For a Treasury Bill, the BYE [(F-P)/P)/t where t = x/365] a) assumes compounding within a year b) assumes simple interest c) takes the periodic rate and multiplies by the number of periods d) b and c are true 36. Assuming you hold an annual pay coupon bearing bond to maturity, its annual return [r-ann = (Vt/Vo) (1/t)-1] is equal to a) the YTM if you can and do reinvest at a fixed rate b) the EAR c) the YTM if you can and do reinvest at the YTM d) none of the above 37. In a downward sloping yield curve environment, a) the liquidity premium cannot exist b) according to the expectations approach, long-term rates are no longer an average of current and expected future rates c) expected future short term rates cannot be greater than the current short term rate d) a and b are correct 38. According to the Expectations Approach to the term structure a) the forward rate is not a good estimate of the expected future 1-year rate b) investors are risk averse c) when the term structure is in equilibrium, the forward rate is equal to the expected rate d) none of the above39. According to the liquidity premium approach to the term structure a) The investors' subjective degree of risk aversion is embedded in the 2-year rate b) the equilibrium 2-year rate > an average of 1-year and expected future 1-year rate c) the forward rate > the expected rate due to a risk premium d) all of the above46. If the stock price falls and the call price rises, then what has happened to the call option's implied volatility (assuming nothing else has changed)? a) UP b) Down c) Same d) Can't tell 47. Two-year zero coupon securities have greater price volatility than one-year zero-coupon securities over an identical one month period: a) under all circumstances b) when investors are risk averse c) only for parallel shifts in a flat yield curve d) as long as the law of one price holds 48. The price (per $100 face value) of a 7% semi-annual pay bond with exactly 2-1/2 years to maturity and a yield to maturity of 8.75% is: a) 93.4381 b) 96.9111 c) 96.1454 d) none of the above 49. Assuming the plowback ratio (b) is greater than zero and less than one, if a company has a higher ROE on its investments, then all else the same, which of the following must be true (more than one may be correct): a) the P/E ratio of its stock will be higher b) the stock's beta will be higher c) the company's growth rate will be higher d) the implied volatility of call options on the stock will be lower4d. The buyer of a put and seller of a call a) both are potential sellers of the underlying asset h} both have rights and not obligations c) hoth prot it' the price of the underlying asset falls d] a and c are correct 41. A protective put a) combines a long put with long stock h} creates a long call c) prots when the underlying asset's stock price increases d} has downside protection e) all of the above 42. Long a straddle a) is a bet on volatility b} prots when nothing happens c) profits with wide swings in either direction of the price of the underlying asset d} is the same as a protective put c) a and c are correct 43. The price volatility of a bond during a year, in general, depends upon {a} the duration of the bond {b} the volatility of interest rates {c} the volatility ofeth'Cted ination (d) all of the above 44. Which of the following statements is false: a) When current yield is greater than yield to maturity, the bond is selling at a premium b) The price of a semi-annual or an annual coupon paying bond will be the same if their coupon rate is the same as yield to maturity regardless of differences in maturity c) The concept of yield to maturity suffers from the reinvestment assumption for both semi-annual and annual coupon paying bonds d) If I invest $100 in a 10% coupon, 2-year bond at par, I will certainly get $121 at the end of the two years 45. An executive is given two choices, either receive nontransferable one-year European call options on 1000 shares with an exercise price of 100 or get an extra $1,000 in bonus at the end of the year for every point that the company's stock exceeds 100 dollars. Which bonus plan should she choose to provide her with the largest dollar payout? a) Take the options b) Take the money c) They are the same

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