QUESTION 1 What is the risk premium for T&S Footwear stock if its expected real return is 10.26%, the expected inflation rate is 4.19%, and the risk-free return is 2.84%? O 7.42% (plus or minus 0.05 percentage points) O 12.04% (plus or minus 0.05 percentage points) 10.69% (plus or minus 0.05 percentage points) 14.91% (plus or minus 0.05 percentage points) O None of the above is within 0.05 percentage points of the correct answer QUESTION 2 How many of the following statements are true if K's analysis involves analyzing publicly available company financial statements, government data, and industry reports and attempting to identify stocks of firms that are undervalued? Statement 1: There could be predictable benefits from K's analysis in markets that are not efficient. Statement 2: There could be predictable benefits from K's analysis in markets that are weak form efficient. Statement 3: There could be predictable benefits from K's analysis in markets that are semi-strong form efficient. Statement 4: There could be predictable benefits from K's analysis in markets that are strong form efficient. QUESTION 3 Over the past year (from one year ago to today), the inflation rate was 3.63% the risk-free rate was 4.12% and the real rate of return for a bond was 12.91%. The bond is currently priced at $999.00 pays annual coupons of $108.00 and just made a coupon payment. What was the price of the bond one year ago? $946.08 (plus or minus $1.00) $945.91 (plus or minus $1.00) $980.43 (plus or minus $1.00) $1027.38 (plus or minus $1.00) None of the above is within $1.00 of the correct