Which one of the following problems is adverse selection? A. Metered taxis often do not take the shortest route to a destination. B. Risky firms are willing to borrow at high interest rates because they often default. C. Too Big to Fail D. Homeowners with underwater mortgages sometimes neglect routine maintenance. A coupon bond has a face value of $1,000,9% coupon rate (annualized), and a maturity of 5 years. If the price of this bond is 5961.3913, what is the annualized yield to maturity? (Hint: No Calculation Needed) CA. 10% . 99% CC.8% CD.7% Suppose that Steve buys a bond maturing 2/25/08, trading at 100:16 for settlement 2/25/07 (M100,000). He uses this bond as collateral in a one-week repo, for settlement 2/25/07. This repo has a 2% haircut. Assume that the party doing the reverse (the counterparty of Steve) sells this bond on 2/25/07 to repurchase it on 3/4/07. The trading price of this bond on 3/4/07 is 101:24. The net cash flow for Steve on 2/25/07 is_ CA(100+16/32)% x 100,000 X (1-2%) - (100+16/32)% x 100,000 CB.100,000 x (1-2%) - (100+16/327% x 100,000 C. 100,000 X (1-2%) - (101+24/32)% x 100,000 D.(101+24/32)% x 100,000 X (1-2%) - (101+24/32)% x 100,000