Questions from Corporate Finance

Q: State four important implications of the EMH for investors and two implications

State four important implications of the EMH for investors and two implications for corporate officers.

Q: 1. Which of the following statements about an efficient market is

1. Which of the following statements about an efficient market is false ? a. Prices fully and accurately reflect all available information. b. Prices reflect information about a firm’s future plans. c...

Q: 1. Which of the following statements about strong form EMH is

1. Which of the following statements about strong form EMH is false? a. It encompasses both the weak and semi-strong EMH. b. It is the most flexible form of market efficiency. c. It states that prices...

Q: Explain the difference between an insurance contract and a credit default swap

Explain the difference between an insurance contract and a credit default swap.

Q: How and why did AIG fail?

How and why did AIG fail?

Q: Why would making CDSs an exchange-listed product have avoided the

Why would making CDSs an exchange-listed product have avoided the collapse of AIG and averted the 2008–9 financial crisis?

Q: Complete the following table. The underlying asset is ounces of gold

Complete the following table. The underlying asset is ounces of gold. Assume no arbitrage.

Q: The Health Bracelet Company will need 1 ,000 kilograms of copper

The Health Bracelet Company will need 1 ,000 kilograms of copper in one year and is trying to decide between buying the copper on the spot market or using a forward contract. The spot price of copper...

Q: FinCorp Inc. wishes to examine the effect of correlation on the

FinCorp Inc. wishes to examine the effect of correlation on the efficient frontier that can be created by investing in ABC and FGI. The expected return of ABC is 6 percent, with a standard deviation o...

Q: Suppose the spot exchange rate is C$1.4665 per

Suppose the spot exchange rate is C$1.4665 per euro, while the six‐month forward rate is C$1.50 per euro. What will be the profit for an investor who assumes a €100,000 long position in the forward co...