1. IBM paid dividends of $4.80 and earned $8.40 per share in the most recently completed full year. Next year earnings and dividends are expected to grow at 8% which is also the long-term expected growth rate. If the required return on IBM stock is 12% the market price per share should be closest to:

a) $50

b) $80

c) $100

d) $120

e) $130

2. A restriction with hedge funds under which investors cannot withdraw their funds for as long as several months or years is called ________.

A) Transparency

B) A lock-up period

C) A back-end load

D) Convert arbitrage

E) Limited liability

3. Hedge fund managers are compensated by ____________.

a) Management fees from fund assets and incentive bonuses

b) Commissions and a share of the gains

c) Commissions and management fees

d) Management fees and a share of the gains

e) Commissions, fees, bonuses, and a share of the gains