In a forward rate agreement, the seller agrees to:
I). Pay a fixed interest rate determined now.
II). Pay an interest rate to be determined at a future date.
III). Receive a fixed interest rate determined now.
IV). Received an interest rate to be determined at a future date.

Assuming that you believe a particular company has internally-generated goodwill, which of the following costs would you capitalize and then amortize over their estimated useful lives?

A study found out that, on average, 10% of a pharmaceutical company's drugs that are placed on the market sell more than $500 million their first year. If a drug sells more than $500 million on its first year on the market, its probability of selling more than $500 million on the second year goes up to 90%. If on the other hand, the drug sells under $500 million during its first year on the market, its probability of selling more than $500 million the second year is only 30%. If a drug sold $750 million the second year after its launch, what is the probability that it sold more than $500 million the first year after its launch?

The need for money arises when income is received only occasionally (say once a month) in discrete amounts, but expenditures occur continuously. This type of demand for money is:

Which of the following statements regarding duration and a bond's price volatility is (are) correct?
I). Duration is a linear estimate of a bond's price change given an expected change in market interest rates.
II). Duration actually underestimates a bond's price increase and decrease given an expected change in market interest rates.
III). The combined effect of a bond's duration and convexity will be greater than a bond's expected change related to duration alone.
IV). Convexity is an attempt to mitigate the error included with the duration measure.
A I and II
B. I and IV.
C. III and IV.