Question 5 (1 point) Which one of the following statements concerning market efficiency is correct? Investors will generally receive a fair price when they sell shares of stock. New information will gradually be reflected in a stock's price to avoid any sudden change in the price of the stock. In a strong-form efficient market, some market participants will have an advantage over others. Real asset that are infrequently bought and sold (e.g., real estate, timber) are more efficient than financial assets (e.g. stock, bonds) that are heavily traded. Question 6 (1 point) ABC Corp. has a covariance of 0.08 with the market portfolio, and the standard deviation of the market portfolio is 0.2. The market risk premium is 10% and the risk free rate is 2.5%. ABC Corp. has 1 million outstanding bonds trading at $100 currently. ABC Corp. has 10 million shares outstanding trading at $10. What is the weighted average cost of capital for ABC Corp. if the yield to maturity of its bond is 10%? Assume that corporate tax rate is 40%. 13.25% 14.25% 15% 12.25% None of the above