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2. Answer True or False to the following questions and with Explanation

a) The capital market is so efficient that all information is transmitted to everyone instantaneously.

b) The difference between the Uncertainty and Risk is that there is a probability assessed for the second one.

c) The cost of debt is the expected rate of return for creditors for the firm. Therefore, if theres an increase in interest rates in the market, the cost of debt will also increase.

d) The reason to discount the future expected cash flows is to deflate the inflation rate on the money received.