Q15 1 Point Triangular arbitrage would take place if the rate between two currencies was the ratio of the two direct rates. Choice 1 of 5:Cross; greater than Choice 2 of 5:Spot; less than Choice 3 of 5:Cross; less than Choice 4 of 5:Cross; unequal to Choice 5 of 5:Spot; equal to Q16 1 Point A portfolio contains three assets. The first asset comprises 30% of the portfolio and has a beta of 0.98. The second asset comprises of 25% and has a beta of 1.26 and the third asset has a beta of 2.38. The portfolio beta is: Choice 1 of 5:1.98 Choice 2 of 5:1.35 Choice 3 of 5:1.68 Choice 4 of 5:1.38 Choice 5 of 5:1.54 Q17 1 Point The trade-off theory suggests that the optimal capital structure is J achieved when the: Choice 1 of 5:Debt-equity ratio is equal to one. Choice 2 of 5:Debt-equity ratio is equal to zero. Choice 3 of 5:Cost of equity is maximised given a pre-tax cost of debt . Choice 4 of 5:Debt-equity ratio is such that the cost of debt exceeds the cost of equity. Choice 5 of 5:Debt-equity ratio results in the minimum weighted average cost of capital