Q6: ARTO PLC are offering a 5 for 1 rights issue to its existing shareholders. The current price of ARTO PLC stocks are 23. They are offering the 5 new shares at a 20% discount to the current stock price. Assuming the price of existing stocks does not change before the rights issue occurs, what is the theoretical ex-rights share-price? a) 18.40 b) 19.17 c) 23.00 d) 21.47 Q7: Stock Phas an alpha of 0.08, a Beta of 0.95, and residual variance of 17. The variance of the market return is 13.50. The proportion of market risk to total risk (i.e. the R2) for Stock P is: a) 40.75% b) 41.75% c) 42.75% d) 43.75% Q8: You are long 12,500 call options written on MOOTS INC stock with a strike price of $88.00; with each contract costing $4.70. If the stock price at maturity is $95, what is the profit on your position? a) -$28,750 b) -$2.30 c) $2.30 d) $28,750 Q9: You are a smoothie manufacturer who anticipates purchasing 105,000lbs of orange juice on the ICE FUTURES US Market (NOTE: lbs or pounds are an imperial measurement of mass). The current spot prce of orange juice is $0.94/lbs and the futures price is $0.97/lbs. Each contract is for the delivery of 15,000lbs of orange juice at maturity. In order to hedge exposure of upward price pressure on orange juice on the spot market you must go long how many contracts? a) 7 b) 6 c) 5 d) 4 Q10: Supposing the futures price of orange juice at today is $1.07/bs, the profit on your position for the strategy in 29 is: a) $6000 b) $7500 c) $10,500 d) $9,000