1. If you owned a diversified portfolio of two dozen stocks and you thought the market was heading down, you could appropriately protect your capital by:
A) purchasing stock-index calls. B) selling stock-index puts. C) purchasing stock-index puts. D) simultaneously buying an interest rate call and a currency put.
2. A firm has return on assets (ROA) of 15 percent, and debt-equity ratio of 60 percent. Calculate the firm's return on equity (ROE).
A. 24 percent B. 21 percent C. 12 percent D. 18 percent