TABLE 7.1 Use the Table to Answer Following Question(s)

question 21

Multiple Choice

TABLE 7.1
Use the table to answer following question(s) .
April 19, 2009, British Pound Option Prices (cents per pound, 62,500 pound contracts) .

-Refer to Table 7.1. What was the closing price of the British pound on April 18, 2009?

• A) $1.448/£
• B) £1.448/$
• C) $14.48/£
• D) none of the above

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary based on income levels, types of income, and other factors.

Cost of Equity

Represents the compensation the market requires to own equity in a company, reflecting the risk perceived by investors in holding that company's stocks.

Dividends

Disbursements issued by a company to its shareholders, apportioning some of the firm's profits among them.

Cost of Debt

The effective rate that a company pays on its borrowed funds from financial institutions or other sources.