Q1:Choose the correct answer based on the attached reference file:

1- the is the most important dealer market in the United States, and the is the most important auction market.

A. NYSE; NASDAQ

B. NASDAQ; NYSE

C. CME; OTC

D. AMEX; NYSE

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2- According to multiple studies by Ritter, initial public offerings tend to exhibit   performance initially and       performance over the long term.

A.good; bad

B.Bad; good

C.bad; bad

D.good; good

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3- _____assets generate net income for the economy, and assets define the allocation of income among investors.

A.Real; financial

B.Real; real

C.Financial; real

D.Financial; financial

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4. ______portfolio management calls for holding diversified portfolios without spending effort or resources attempting to improve investment performance through security analysis.

A. Momentum B. Passive

C. Active

D. Market-timing

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5- Consider the CAPM. the risk-free rate is 6%, and the expected return on the market is 18%. What is the expected return on a stock with a beta of 1.3?

A. 6.00%

B. 18.00%

C. 15.60%

D. 21.60%

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6- You can earn abnormal investment returns via macro forecasting. Firm B produces gadgets. the price of the gadgets is $2 each. Firm B has total fixed costs of $300,000 and variable costs of $1.40 per gadget. the corporate tax rate is 30% (Federal and State combined). What is the breakeven number of gadgets B must sell to make a zero after-tax profit?

A. 600,000

B. 400,000

C. 500,000

D. 300,000

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7- Arbitrage is based on the idea that .

A.Assets with identical risks must have the same expected rate of return

B.Markets are perfectly efficient

C.Securities with similar risk should sell at different prices

D.the expected returns from equally risky assets are different

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8- The nominal interest rate is 6%. The inflation rate is 3%. the exact real interest rate must be .

A. 2.91%

B. 3.85%

C. 2.12%

D. 1.45%

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9- The material wealth of society is determined by the economy’s , which is a function of the economy’s .

A.productive capacity; real assets

B.productive capacity; financial assets

C.Investment bankers; financial assets

D.investment bankers; real assets

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10- Consider the capital asset pricing model. the market degree of risk aversion, A, is 3 & The market portfolio risk is 2.25%. If the risk-free rate of return is 4%, the expected return on the market portfolio is .

A. 6.75%

B. 9.25%

C. 10.75%

D. 12.00%

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Q2: Solve this and step by step & write the formulas:

An investor buys a T-bill at a bank discount of 4.80 with 150 days to maturity for $9800. The bill has a face value of $10,000. The investoràbond equivalent yield on this investment is____?