1. Is moral suasion the same as forward policy guidance?
2. Explain the cost of bond in financing why is it interesting.
3. Stock Y has a beta of 1.2 and expected return of 11.4 percent. Stock Z has a beta of .80 and an expected return of 8.06 percent. IF the risk-free rate is 2.5 percent and the market risk is premium is 7.2 percent, are these stocks correctly priced?