Answer:
A) above the security market line.
Explanation:
A) above the security market line.
Option "a" is correct because all the correct priced stock will be shown on the security market line while the underprice stock is represented above the security market line and the overpriced stock is shown below the security market line.
Answer:
Correct answer is (C)
Explanation:
Diluted EPS will be the same whether or not the bonds are converted.
Earning Per Share EPS
B because you still have a opportunity to make a good investment, but you can explore other options
Answer:
Interest rate spread will be 1.25 %
Explanation:
We have given a bank is earning 6 % on its $150 million earning assets
So interest earned = 6 %
Interest paid on liabilities = 4.75 %
We have to find the bank interest rate spread
We know that bank interest rate spread is given by
Interest rate spread = interest earned - interest paid on liabilities = 6 - 4.75 = 1.25 %
So interest rate spread will be 1.25 %
