chap 8

7. according to the Modigliani-miller theorem, does it benefit a firm's shareholders when more leverage is added to the firm's financial structure? Why or Why not?

8.How do the following features of corporate bond affect its yield: call option, convertibility, collateralization, sinking fund, and senior status.

16. Why are the GSEs said to be characterized by moral hazard? Any evidence that this is a serious problem?