1. Why should the treasury issue callable bonds? When should they exercise their right to call or redeem the bonds? Why would corporations issue callable bonds? Why should investors want to buy callable bonds?
2. What are the portfolio weights for a portfolio that has 170 shares of Stock A that sell for $91 per share and 145 shares of Stock B that sell for $110 per share? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.1616.) Portfolio weight Stock A % Stock B %
3. Supppose GDL just paid a dividend of $5 and the required return on the stock is 11%, what constant growth rate must investors expect if the stock currently sells for $50?