Please answer all questions

1. Which of the following best describes the need for capital budgeting? a. The company is aware of environmental issues and will only allocate to projects that are sustainable and for the good of the environment. b. The management of the company is against spending on projects at this time. C. A company's resources are limited so that it will only choose between those projects that will deliver the highest wealth increase for the company. d. The company should allocate to funds only to projects that produce a positive NPV as that will look good on any prospectus for potential new investors. 2. High risk, high return refers to: a investors go for higher returns because it gives them a chance to gamble for fun. b. investing in one company's shares as opposed to diversifying will get bigger profits. C. investing to the last dollar will naturally yield the highest returns. d. investors require a higher return to compensate for higher levels of uncertainty of future outcomes. 3. Which of the following statements is true for zero coupon bonds? a. They are unpopular investments because they offer poor value for money. b. Their price is equal to the present value of their face value. c. Their price is less volatile than a similar coupon paying bond. d. They are popular investments because they generally have higher yields. 4. IPOs are usually under-priced because a. the investment bank underwriting the issue has recommended a lower offer price. b. the company has misjudged the level of investors' interest. C. investors have misjudged the riskiness of the company. d. all of these are true. 5. Assuming all else stays unchanged, when interest rates fall a. bond prices go up. b. bond prices do down c. bond prices may go up or down, depending on whether it is a premium bond or a discount bond. d. bond prices may go up or down, depending on the time to maturity of the bonds