Which of the following statements is least accurate with respect to the price volatility characteristics for callable bonds?

• A.The yield on a non-callable bond can never become higher than the yield of an equivalent callable bond.
• B.At yield levels below that of the coupon rate, callable bonds become extremely sensitive to small changes in yield.
• C.For high levels of yield, the price volatility characteristics of a callable bond will mirror that of an equivalent non-callable bond.

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Technical analysts assume the markets are ______ while fundamental analysts assume the markets are ______.

• A.weak-form efficient; weak-form efficient.
• B.weak-form inefficient; semi-strong-form efficient.
• C.weak-form inefficient; semi-strong-form inefficient.

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The before-tax cost of debt capital for a firm _______.

• A.can be estimated by finding the yield on recently issued, longer maturity bonds with a lower bond rating.
• B.is the return that the firm's creditors demand on new borrowing.
• C.can be calculated by looking at the coupon rates on existing bonds of similar risk.

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Which of the following does NOT favor a capital lease?

• A.Lessee is in a high tax bracket.
• B.Compensation contracts based on return on capital benchmarks.
• C.Lessor can obtain a higher salvage value.

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Which of the following statements is least accurate with respect to parametric and nonparametric tests?

• A.A nonparametric test makes very little assumptions about the distribution of the underlying population.
• B.Nonparametric tests cannot be used when data is expressed in terms of ranks.
• C.A parametric test makes specific assumptions about the distribution of the underlying population.

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