This topic contains a solution. Click here to go to the answer

Author Question: You want to buy 20,000 worth of shares in Tootsie Roll Industries Inc on margin, but you only have ... (Read 89 times)

ec501234

  • Hero Member
  • *****
  • Posts: 573
You want to buy 20,000 worth of shares in Tootsie Roll Industries Inc on margin, but you only have 10,000 of your own money to invest. The remaining 10,000 is borrowed by issuing T-Bills; assume the cost of borrowing is the risk-free rate.
 
  What is the portfolio weight for the risk free asset (T-Bills)?
  A) -1.00
  B) -0.50
  C) 1.00
  D) 0.50
  E) 2.00

Question 2

What is the primary advantage of a firm that is able to issue commercial paper to finance its
  short-term assets?
 
  A) Interest rates on commercial paper are generally lower than rates on bank loans.
  B) Commercial paper is guaranteed by the Federal Government
  C) Commercial paper provides greater flexibility in terms of repayment.
  D) Commercial paper does not need to be repaid.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

frankwu0507

  • Sr. Member
  • ****
  • Posts: 322
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 55% of students answer this correctly





 

Did you know?

Liver spots have nothing whatsoever to do with the liver. They are a type of freckles commonly seen in older adults who have been out in the sun without sufficient sunscreen.

Did you know?

Patients should never assume they are being given the appropriate drugs. They should make sure they know which drugs are being prescribed, and always double-check that the drugs received match the prescription.

Did you know?

Studies show that systolic blood pressure can be significantly lowered by taking statins. In fact, the higher the patient's baseline blood pressure, the greater the effect of statins on his or her blood pressure.

Did you know?

Drug abusers experience the following scenario: The pleasure given by their drug (or drugs) of choice is so strong that it is difficult to eradicate even after years of staying away from the substances involved. Certain triggers may cause a drug abuser to relapse. Research shows that long-term drug abuse results in significant changes in brain function that persist long after an individual stops using drugs. It is most important to realize that the same is true of not just illegal substances but alcohol and tobacco as well.

Did you know?

In 1886, William Bates reported on the discovery of a substance produced by the adrenal gland that turned out to be epinephrine (adrenaline). In 1904, this drug was first artificially synthesized by Friedrich Stolz.

For a complete list of videos, visit our video library