1. Last year Gloria Delgado-Prichett, Inc., experienced a 34% increase in earnings per share on 11% increase in sales. If management knows that Gloria Delgado-Pritchett’s DOL is 1.5, what is its DFL?

3.09

2.06

3.55

1.67

2. In a perfectly efficient market, all assets would plot on the Security Market Line.

True

False

3. For any number of compounding periods per year greater than 1, EAR (also called the APY) will always be greater than the APR.

True

False

4. A bond's “spread” refers to the difference between its Moody's rating and its Standard & Poor's rating.

True

False