1. At an interest rate of 10%, which of the following cash flows should you prefer?

Year 1	Year 2	Year 3
Investment 1	500	300	100
Investment 2	100	300	500
Investment 3	300	300	300

1. Investment 1
2. Investment 2
3. Investment 3
4. Any of the above as they all add up to £900

2. When the investor’s required rate of return equals the coupon rate of a fixed income security, then

1. The par value of the security is greater than its redemption value
2. The par value of the security equals its present value
3. The par value of the security will be greater than its present value
4. The redemption value of the security will be greater than the par value of the security

3. The growth rate in dividends is a function of two ratios. They are:

1. ROA and ROE
2. Dividend yield and growth rate in dividends
3. ROE and the Retention Ratio
4. Book value per share and EPS