Georgie is a finance and economics student who has inherited $50,000. Which of the following securities would be the most attractive investment for her if she is expecting inflation rates to increase? Select one: a. 2-year government bonds (zero coupon). o b. 5-year government bonds (2% coupon rate). o c. 2-year government bonds (2% coupon rate), O d. 5-year government bonds (zero coupon). ABC Company needs additional equity capital and is considering either an IPO or a private placement. Which of the following is an advantage of raising funds through an IPO? Select one: o a. Usually faster than private placement. b. Investors will pay higher prices for more liquid shares. O c. Lower cost of compliance with ASIC disclosure requirements. o d. Increased transparency of information. Suppose you buy a share for $100 and expect that the price next year will be: $125 with a probability of 30% $115 with a probability of 30% $105 with a probability of 40% The standard deviation return on your investment expressed as a percentage to 2 decimal places is: Select one: O a. 8.31% O b. 12.79% c. 10.00% O d. 14.00% Can the total holding return on a share that pays high dividends be less that its dividend yield, Why or why not? Select one: oa. Yes. The share price could decrease implying a capital loss component of the return. b. Yes. If the dividend yield is very high, then if the capital appreciation cannot keep up, the average will fall implying a negative total holding return c. Yes. There is a strong negative correlation between dividend yield and total return, especially at the extreme end. O d. No. A high dividend yield implies a successful company giving a positive total holding return O Which statement is typically true of preference shares? Select one: o a. The dividend rate is variable. O b. All of these statements are true. . O c. The maturity date is fixed. Georgie is a finance and economics student who has inherited $50,000. Which of the following securities would be the most attractive investment for her if she is expecting inflation rates to increase? Select one: a. 2-year government bonds (zero coupon). o b. 5-year government bonds (2% coupon rate). o c. 2-year government bonds (2% coupon rate), O d. 5-year government bonds (zero coupon). ABC Company needs additional equity capital and is considering either an IPO or a private placement. Which of the following is an advantage of raising funds through an IPO? Select one: o a. Usually faster than private placement. b. Investors will pay higher prices for more liquid shares. O c. Lower cost of compliance with ASIC disclosure requirements. o d. Increased transparency of information. Suppose you buy a share for $100 and expect that the price next year will be: $125 with a probability of 30% $115 with a probability of 30% $105 with a probability of 40% The standard deviation return on your investment expressed as a percentage to 2 decimal places is: Select one: O a. 8.31% O b. 12.79% c. 10.00% O d. 14.00% Can the total holding return on a share that pays high dividends be less that its dividend yield, Why or why not? Select one: oa. Yes. The share price could decrease implying a capital loss component of the return. b. Yes. If the dividend yield is very high, then if the capital appreciation cannot keep up, the average will fall implying a negative total holding return c. Yes. There is a strong negative correlation between dividend yield and total return, especially at the extreme end. O d. No. A high dividend yield implies a successful company giving a positive total holding return O Which statement is typically true of preference shares? Select one: o a. The dividend rate is variable. O b. All of these statements are true. . O c. The maturity date is fixed
