The Yield to Maturity (YTM) on a 5-year government zero coupon bond is 5% and the YTM on a 4-year o coupon government bond is 496, what is the forward rate for the 5a year? d. 0.97% C. 9.097% D. none of the above 19. Which of the following observations appear to indicate semi-strong market inefficiency? a. Managers make superior returns on their purchases of their company's stock b. There is a positive correlation between the return on a broad market index in one quarter and the change in aggregate profits in the following quarter e. Stocks of companies with unexpectedly high earnings appear to offer high returns for several months after the earnings announcement. A. a and b only. B. a, b and c. C. c only D. a and c only E. b and c only. 20. A stock has a correlation with the market of 0.4. If the Sharpe ratio of the market portfolio is 0.7, what is the Sharpe ratio of the stock? (Hint: algebraically manipulate the SML equation.) A. 0.28 B. 0.75 C. 0.60 D. 0.55 21. An investor buys a T-bill at a bank discount quote of 3.60% with 180 days to maturity. The investor's actual annual rte of return on this investment was A. 3.75% B. 3.97% C. 4.07% D. 4.14% 22. Which one of the following is a true statement? A. Dividends on preferred stocks are tax-deductible to individual investors but not to corporate investors B. Common dividends cannot be paid if preferred dividends are in arrears on cumulative preferred stock C. Preferred stockholders have voting power D. Investors can sue managers for nonpayment of preferred dividends