1. Which of the following statements is CORRECT?
a. Return on Assets will rise after a Convertible Bond is exchanged for equity.
b. Convertibles bring in additional funds when converted, while warrants do not.
c. Both warrants and convertibles are types of put options.
d. Off balance sheet financing may make a company appear more risky than it actually is.
2. Which one of the following types of securities has tended to produce the lowest real rate of return for the period 1926 through 2014?
a. U.S. Treasury bills
b. large-company stocks
c. long-term corporate bonds
d. small-company stocks
e. long-term government bonds