a)

b)

c)

3 questions. please only answer if you know the answers. thank you in advance!

Root Inc, a new data driven car insurance company, held its IPO (went public) on October 28, 2020 selling approximately 2.5 million shares of stock. The first purchase of its public stock were at a price of $28. Today the stock price is $14.25. Which of the following are true? o Ordinary investors can now buy Root Inc's bonds. O Root began selling its car insurance publicly on October 28, 2020. O The original investors in Root's common stock are probably very happy with their stock purchase. O When Root Inc. had their IPO on Oct 28, 2020, they had a high cash outflow to pay all the ordinary investors who bought the stock. If an investor wants to buy Root's common stock today, they will pay approximately $14.25 per share. The current US Government yield curve is upward sloping (as it has been all year 2020). This tells you O Bonds issue by US corporations have greater prices than US government bonds. O The less time to maturity, the greater the maturity risk of a bond. O Long term government bond rates are greater than short term government bond rates. O Long term US government bonds have higher default risk than corporate bonds. O Inflation is expected to fall from current levels. When investors form well diversified portfolios of stock O they will eliminate all risk of investing. o the company specific (unsystematic) risk will be eliminated. O the market (systematic) risk of the portfolio will be eliminated. O they will be taking on extra risk that will not be rewarded by the market they will increase expected return higher than that of any one stock