1. Discuss about social benefits of forward/futures markets in terms of 1) risk management through hedging and 2) the market’s ability to discover true equilibrium prices.
2. Is a corporate bankruptcy a legitimate tool to be used by corporate management to enhance the value of the firm? Why do you hold this opinion?
3. Yolanda is planning to buy a new car in seven years. If she deposits a lump sum of $450 in a savings account that earns 5% interest compounded quarterly, how much money will she have to use as a down payment on her new car in seven years? (see example 1.10)