1. Financial economics is considered a branch of *
   1. Consumer choice theory
   2. Microeconomics
   3. Macroeconomics
   4. None of these
2. Consider two income stream (y*1, y*2)=(500,2200) and (y1, y2)=(1500,990) . The market interest rate is 7%. Suppose that income stream (y1, y2)=(1500,990) lies on market opportunity line (L1) and that market opportunity line L2 lies to the right of L1 and market opportunity line L3 lies below L1. On which market opportunity line will (y*1,y*2) lie? *
   1. L1
   2. L2
   3. L3
   4. None of these
3. Consider two income stream (y*1, y*2)=(500,2200) and (y1, y2)=(1800,990) . The market interest rate is 10%. Suppose that income stream (y1, y2)=(1800,990) lies on market opportunity line (L1) and that market opportunity line L2 lies to the right of L1 and market opportunity line L3 lies below L1. On which market opportunity line will (y*1, y*2) lie? *
   1. 5 points
   2. L1
   3. L2
   4. L3
   5. None of these
4. The equity to debt ratio of a corporation X is 1.38. The capital structure of corporation X is: *
   1. 42% debt and 58% equity
   2. 58% debt and 42% equity
   3. 100% debt and 0% equity
   4. None of these