Please complete the sentence. Interest payments on debt represent costs. Select one: O variable O high Olow O scale O fixed Consider a binomial tree with one period ahead T=0,1 and equal chance that the risky asset goes up or down. The expected return of the risky asset is 20% and the risk-free yields a return of 1%. If an investor starts with a wealth of $5000, then the expected return for short-selling the risky asset is Select one: O positive O zero O It cannot be determined O negative Please complete this sentence. Firms with lower leverage are typically cycle. sensitive to the business Select one: O more O less You have been hired to analysed two' ns (HK and PER) HK PER 0.16 0.17 22 20 ROE E1 ($ 000) b K 0.6 0.5 0.14 10.08 0.14 g 0.10 Current Market Price ($ 000) 1180 180 Which strategy do you recommend? Select one: O Buy both HK and PER O Indifferent between buying and selling HK, but buying PER. O Indifferent between buying and selling HK, but selling PER Select one: O Buy both HK and PER Indifferent between buying and selling HK, but buying PER. O Indifferent between buying and selling HK, but selling PER. O Indifferent between buying and selling PER, but selling HK. O Indifferent between buying and selling PER, but buying HK. O Sell both HK and PER O Sell HK and Buy PER O Buy HK and sell PER