please answer both, ratting will be given, much appreciated

1-

Currencies U.S. dollar foreign-exchange rates. May 5, 2011

Country/currency.in US$............per US$

British Pound....1.53470.6516

Norwegian Kroner...0.16905.9173

Thai Baht..0.0310....32.250

The price of an ounce of gold in New York is $1,950, and the price of the same ounce of gold in London is 1,285 British Pounds. Using the exchange rates above, what would you predict would occur in well-functioning markets based upon this information?

	a.	The price of gold will fall in New York and rise in London
	b.	The price of gold will fall in New York and will stay the same in London
	c.	The price of gold will rise in New York and fall in London
	d.	The price of gold will stay the same in both New York and London
	e.	The price of gold will rise in New York and will stay the same in London

2- The chapter on financial leverage, as well as the discussion in class, used risk units to illustrate what about financial leverage?

	a.	That debt is risk free
	b.	That the risk of the firms assets cannot be changed by shifts in financial leverage
	c.	That firm value is maximized where the cost of capital is minimized
	d.	That for firms with leverage, the higher the EBIT, the higher is firm risk
	e.	That debt financing creates a tax shield and therefore lowers firm risk