|
Correct answer is Dffice ffice" />
A is incorrect because the two firms have the same capital ratio, so they have the same capital if they have the same assets. As no mention was made of asset size, it could go either way.
B is incorrect Firm A actually has the lower asset volatility and the opposite of the sentence is true.
C is incorrect. We know that asset volatility is smaller than equity volatility holding constant leverage, so A has the lower asset volatility. This answer implies its asset volatility is higher.
D is correct. See C for the explanation.
Reference: Stulz, Risk Management and Derivatives, Chapter 18 | 
发表于 2009-6-13 11:03
| 