1. Zero-coupon bonds provide no annual interest payments. have highly stable pri

Question

1. Zero-coupon bonds

      provide no annual interest payments.
      have highly stable prices even with changing interest rates.
      provide an investor with tax-free income until maturity.
      two of the above.

2.White Knights

advise companies on ways to avoid being taken over.
      offer a higher purchase price and more friendly offer in the event of an unsolicited and unfriendly takeover attempt.
      attempt to make money in the stock market on stocks that are likely merger candidates.
      buy depressed stock of quality companies when merger talks are discontinued.

3.Which of the following types of mergers is most likely to lead to diversification benefits?

Horizontal merger
      Vertical merger
      Tax free exchange
      Conglomerate

Explanation / Answer

Hi,

Please find the answers as follows:

Part 1:

Option A (provide no annual interest payments) is correct.

Part 2:

Option B ( offer a higher purchase price and more friendly offer in the event of an unsolicited and unfriendly takeover attempt) is correct.

Part 3:

Option D (Conglomerate) is the correct answer.

Thanks.

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