In the 5-way DuPont deconstruction, which of the following would lead to an INCREASE in Return on Equity (ROE), all else kept equal?

a. reducing the debt/equity ratio by retiring debt

b. an increase in productive capacity (assets) without a change in sales

c. an increase to the firm's overall cost of debt

d. a decrease in the tax burden ratio used in DuPont analysis

e. a decrease in the gross margin

A writer of a call option can avoid having to deliver the stock at the exercise price of the option prior to the options expiration by:

a. writing a second call.

b. buying a put.

c. buying a comparable call.

d. writing a put.

Select which best describes the rights and/or responsibilities given a European style option if someone is: LONG one CALL contract on stock currently priced @ 27 having a strike of 25 with time to expiration of 5 months.

a. If the stock is priced above the strike at expiration, e.g. 30, this person will be obligated to sell it for 25 per share.

b. This person is obligated to buy the stock at expiration for 25 per share

c. This person has the right to buy the stock at expiration for 25 per share

d. This person has the right to sell the stock at expiration for 25 per share

e. If the stock is priced at 27 at expiration, this person would exercise their right to sell it for 25 per share.