1. Which of the following is true concerning intrinsic value and price?
Intrinsic value depends on the size, timing, and risk of the expected cash flows.
The intrinsic value calculation produces the observed stock price.
The intrinsic value of a financial asset would not change even if its discount rate were to change.
Because the intrinsic values of all financial assets are the same, the intrinsic value of stocks equals the value of bonds.
More than one of the answers is correct.
2. Which of the following statements is correct?
Firms raise long-term capital in the money market.
In futures markets, prices are decided today but delivery takes place in the weeks or months ahead.
Firms raise capital in the commodities market.
Firms raise capital in the secondary market.
An initial public offering is an example of a secondary market transaction.