11. The security market line (SML) relates risk to return, for a given set of market conditions. If risk aversion increases, which of the following would most likely occur? A. The market risk premium would increase. B. Beta would increase. C. The slope of the SML would increase. D. The SML line would shift up. 12. A stock with a beta greater than 1.0 has returns that are __________ volatile than the market, and a stock with a beta of less than 1.0 exhibits returns which are ____________ volatile than those of the market portfolio. A. more, more B. more, less C. less, more D. less, less 13. Of the following types of securities, which is typically considered most risky? A. Long-term corporate bonds C.Common stocks of large companies B. Long-term government bonds D.U.S. Treasury bills 14. Of the following alternative investments, which would be expected to have the highest return? A. U.S. Treasury bonds C.U.S. Treasury bills B. Common stocks of small firms D.Long-term corporate bonds 15. Of the following alternative investments, which would be expected to have the lowest return? A. U.S. Treasury bonds C.U.S. Treasury bills B. Common stocks of small firms D.Long-term corporate bonds
Posted on: Wed, 27 Nov 2013 13:59:39 +0000
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