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DISCUSS FULLY THE VALIDITY OF EACH OF THE FOLLOWING STATEMENTS Question 1: The yield to maturity of a bond is the discount rate that sets

DISCUSS FULLY THE VALIDITY OF EACH OF THE FOLLOWING STATEMENTS

Question 1: The yield to maturity of a bond is the discount rate that sets the future value of the promised bond payments equal to the face value of the bond. Question 2: A firm should try to depreciate its assets in the shortest possible period.

Question 3: In general the riskiness of a portfolio can be reduced to zero by increasing the number of stocks in the portfolio. Discuss fully the validity of this statement.

Question 4: The investment decision determines the debt-equity ratio of the firm. Discuss fully the validity of this statement.

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