Explain how the investor could make a profit without risk and without investing any of his own money (ignoring transaction costs and taxes).[30%](b)In Germany, financial institutions hold significant equity interests in the borrowing firms. How does this affect the cost of financial distress and bankruptcy?
ONLINEEXAM INSTRUCTIONS •Type your answers in an MS Word or Excel file where possible. •The total word limit for this paper is: 3000. Examiners will not continue marking past this limit. •Only one file can be submitted for each exam– please include all your answers in one file. Page 2Question 1(a)Suppose a Canadian investor has […]