**Question:Q1. Describe the factors that determine the level and shape of the yield curve.**

**Q2. Explain how valuing preferred stock with a stated maturity differs from valuing preferred stock with no maturity and calculate the price of a share of preferred stock under both conditions. **

**Q3. Describe how distinguishing between variable and fixed costs can be useful in forecasting operating expenses. **

**Q4. What is the effective annual yield of a bond that promised an annual yield of 7.5% if this bond pays coupons twice a year? **

**Q5. What is the EAC of two projects: project A, which costs $230 and is expected to last two years, and project B, which costs $300 and is expected to last three years? The cost of capital is 12%. **