Question 1: Circle the correct answer: 1. Which of the following is an argument for the relevance of dividends? a. Informational content. b. Reduction of uncertainty. c. Some investors' preference for current income. d. All of the above. 2. Assume that Basket Wonders (BW) has common stock outstanding with a current value of $64.80 per share, current dividend of $3 per share, and a dividend growth ra forever. a. ke = 13% b. ke 2.6% c. ke = 21.6% d. ke = 3% 3. Which of the following statements is FALSE? a. Positive covariance means that asset returns move together. b. A zero covariance implies there is no relationship between two variables. c. If two assets have perfect negative correlation, it is impossible to re- portfolio's overall variance. d. The covariance is equal to the correlation coefficient times the standard d the first stock times the standard deviation of the second stock