Question 2: [01, 02, 03] [1 mark x 10 = 10 marks] State whether the following statements are true or false. 1. Bond represents a hybrid debt instrument whereas preferred stock is ownership rights. 2. Ahmed bought a bond with OMR (1000) par value at OMR (950), which means a market interest rate is greater than the coupon rate of the bond 3. One use of the cost of capital is to design a firm's equity policy. 4. Efficient Market Hypothesis means Securities are normally in equilibrium and are "fairly priced. 5. The market is IN equilibrium when the required rate of return larger than the dividend growth rate. 6. Hedging is an investment to reduce the risk of adverse price movements in an asset. 7. The limitation of CAPM is beta does not remain stable over time. 8. Interest on debts is an expense deducted before tax, which contributes to reducing the cost of deb. 9. When investors become more risk-averse will lead the required rate of return to increase 10. Ahmed has a bond with a par value of OMR (1000), he sold it at OMR (1100), which means a market interest rate is equal to the coupon rate of the bond