1. The factor that can account for failure of the forward exchange rate to equal currency traders and ash, expectation of the future spot exchange rate is:
A) a tariff on goods
B) a risk premium
C) a quota on trade in physical merchandise
D) Cost of transporting.
2. Buggy Whip Manufacturing Company is issuing preferred stock yielding 8%. Selten Corporation is considering buying the stock. Buggy's tax rate is 0% due to continuing heavy tax losses, and Selten's tax rate is 34%. What is the after-tax preferred yield for Selten?
A. 7.22%
B. 5.33%
C. 7.64%
D. 8.04%