9) A company has 1,000,000 shares, and makes an annual profit of $5,000,000. The company has the opportunity to invest $2,000,000 on a new product which will produce an annual profit of $75,000. Assuming the profits are expected to be stable into the indefinite future, which of the following is the lowest stock price which makes the board of the directors most likely consider this investment worthwhile? a) $130 b) $140 c) $375 d) This investment, being profitable, makes sense regardless 10) Which one statement about financial mathematics is FALSE? a) One way that the Federal Reserve Bank can "cool off" (= reduce) an asset price bubble inflating is by raising the prime interest rate (a.k.a. "the safe yield") b) Banks generally charge lower interest rates when the borrower has an asset which the bank can take if the loan isn't paid back than when a loan has no collateral. c) Asset price bubbles occur when large numbers of people believe that prices have momentum and are likely to keep changing in the direction they are. d) Depreciation results in many investments having a shorter payback time than they would if it were not factored in.