Question 37 (1 point) Assume that 90-day U.S. securities have a 3.5% annualized Interest rate, whereas 90-day Canadian securities have a 4% annualized Interest rate. In the spot market. 1 U.S. dollar can be exchanged for 1.4 Canadian dollars. If interest rate parity holds, what is the 90-day forward rate exchange between U.S. and Canadian dollars? O 1) C$ 1.3714/$ O2) C$ 1.4017/5 3) C$ 1.5236/5 04 C$ 1.5910/$ Question 38 (1 point) Helms Aircraft has a capital structure that consists of 40% debt, 10% preferred stock, and 50% common stock. The before-tax costs of capital for the three components are 10%, 11%, and 15% respectively. If the company's tax rate is 35 percent, what is the company's weighted average cost of capital (WACC)? O 1) 8.33% O2) 11.20% 3) 12.60% 13.98% Question 39 (1 point) The betas of Stock A, Stock B, and Stock Care 1.6, 1.2, and 0.8 respectively. If you invest 50% in Stock A, 25% each in Stock Band Stock C, what is the beta of your investment? 1) 1.05 O2) 1.15 3) 1.30 04) 1.50 Question 40 (1 point) A major disadvantage of the payback period method is that: 1) it is useless as a liquidity risk Indicator how quick to recover the investment) O2) It ignores cash flows beyond the payback period. O 3) It does not directly account for the time value of money 4) Statements b and care correct