1. Convertibles are issued primarily to A) raise equity capital. B) reduce the debt load of a firm. C) increase the debt/equity ratio. D) increase earnings per share.
2. Shares of Lakewood, Inc. are currently selling for $52.63. You believe the stock will decline in price ranging from $30 to $32 in the next few months. Which of the following strategies will allow you to profit if your prediction is correct? I. short the stock II. buy a call at 50 III. write a call at 55 IV. buy a put at 45 A) II and IV only B) I and III only C) III and IV only D) I, III and IV only.