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Can someone please help me answer the following questions? Thumbs up Guaranteed for best answer! Which of the following statements is FALSE? A. Managerial entrenchment

Can someone please help me answer the following questions? Thumbs up Guaranteed for best answer!

Which of the following statements is FALSE?

  • A. Managerial entrenchment occurs when a company has such a weak Board of Directors and such strong anti-takeover provisions that senior managers feel there is little change of their being removed.
  • B. Poorly performing CEOs can be removed by a takeover or by the company's Board of Directors.
  • C. Managers are principals and stockholders are their agents.
  • D. Agency conflicts arise when the interests of principals and their agents differ.
  • E. All of the other answers are correct.

Capital IQ currently shows a PE ratio of 7.6 for GM and 92.8 for Amazon. How should you best interpret these results?

  • A. GM manages its fixed assets less well than Amazon and generates lower sales for each dollar invested in fixed assets.
  • B. Amazon is better able to satisfy its short-term liabilities using its current earnings.
  • C. It is not appropriate to compare the PE ratios of GM and Amazon as they operate in fundamentally different industries.
  • D. The market considers Amazon to have better growth opportunities than GM.
  • E. GM manages its fixed assets less well than Amazon and generates lower sales for each dollar invested in fixed assets.

Which of the following has the highest Effective Annual Rate (EAR) of interest?

  • A. 6.8% compounded monthly.
  • B. 6.78% compounded monthly.
  • C. 6.8% compounded semi-annually.
  • D. 6.78% compounded quarterly.
  • E. 6.8% compounded quarterly.

Which of the following statements about bonds is TRUE?

  • A. If a $1,000 bond with an annual coupon of $100 is selling at a discount, its YTM is greater than 10%.
  • B. If nothing else changes, a discount bond's price will tend to decrease as the bond matures.
  • C. If a premium bond's price decreases, its YTM will decrease too.
  • D. A premium bond with a coupon rate of 5%, has a YTM greater than 5%.
  • E. If a discount bond's YTM decreases, its price will decrease too.

Which of the following statements is FALSE?

  • A. Risk averse investors must be compensated with lower expected returns if they are to hold risky assets.
  • B. An efficient portfolio contains only diversifiable risk.
  • C. All of the other answers are FALSE.
  • D. The returns from continually investing in US Treasury bills over the period 1926 to 2012 would be significantly higher than the returns of continually investing in a portfolio of the stock of large US firms.
  • E. The total risk of an investment is measured by the beta of its returns.

Which of the following statements is FALSE?

  • A. The risk of Elon Musk being banned by the SEC from managing a US company is an example of a diversifiable risk.
  • B. Market risk can be eliminated by diversification.
  • C. There is a risk reduction benefit of diversification when the returns of two assets are uncorrelated (the correlation coefficient is equal to zero).
  • D. The impacts of COVID-19 are an example of a market risk.
  • E. The impact of the policies of a potential President Bernie Sanders is an example of systematic risk.

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