1.At 10:59 A.M., the price of Nexus Corp. stock is $25 on the stock exchange. At 11:00, Nexus management unexpectedly announces that the firm has just struck oil in Northern Timbuktu (a good thing). There are no other relevant announcements during the day. At 11:01, Nexus stock is selling for $28.10. At 12:01, the stock is selling for $28.00 on the stock exchange. At 4:00 at the close of trading, Nexus stock is still selling for $28.05. Which of the following statements is most consistent with the above information?a)The market is weak form efficientb)The market is not weak form efficientc)The market is semi-strong form efficientd)The market is not semi- strong form efficiente)The market is strong form efficient
2.You have just gotten a mortgage for $150,000. The interest rate on the mortgage is 6% per year, compounded semi-annually. If the amortization period is 25 years, and you are going to make weekly payments what will be the size of each payment?
3.In a truly competitive environment in which everyone has the same capabilities, where there are no barriers to entry, where there are no patent or copyright laws, and where everyone has equal access to funding, investments…
4.You have been asked to calculate the required rate of return on ABC’s common stock. The stock just paid a dividend of $2. The dividend is expected to increase by 6% per year in perpetuity. The stock’s current price is $10 per share.
5.Given no change in required returns, the value of a share of stock whose dividend is constant will:a)increase over time at a rate of r percent b)decrease over time at a rate of r percent c)increase over time at a rate equal to the dividend growth rate d)decrease over time at a rate equal to the dividend growth rate e)remain unchanged
6.A bond is issued on January 1st, 1994. It is a 20-year 5% annual coupon bond with a $1000 face value. If the price of the bond at issue is greater than $1000,