Which of the following is/are NOT an advantage of a company issuing stocks rather than bonds?

I. The company has no obligation to make regular payments to stockholders

II. Bondholders usually require a higher return than stockholders

III. Issuing stock does not increase the risk of bankruptcy for the firm

IV. Dividends are tax-deductable, unlike bond coupon payments

Multiple Choice

Only II and IV

Only I, II, and IV

Only II, III, and IV

All of them

Only II

You are buying a house priced at $250,000. You need to make a 10% down payment, and closing costs will be 4%. Which of the following is/are true?

I. The amount of the loan will be $250,000

II. The required down payment is $25,000

III. Closing costs will be $10,000

IV. You will need to bring a total of $34,000 to the bank in order to get the loan

Multiple Choice

Only II and IV are True

Only III and IV are True

Only II is True

All of them are True

Only II and III are True

Which of the following is/are True about efficient markets?

I. If the stock market is perfectly efficient, then all stocks will constantly be priced at their fair value

II. Studies showing that 80-90% of professional investors and analysts fail to beat the returns of the overall market support the theory that markets are efficient in the long term.

III. Buy and selling forces cause stock price to move toward their fair value over the long term

IV. Efficient markets make it easier to identify mis-priced investments

Multiple Choice

Only I, II, and III are True

Only II and III are True

All are True

Only I, III, and IV are True

Only I and II are True