The book value of a firm equals the present value of fut… Show more Question 1 2 points 2 points 2 points 2 points 2 points Save The book value of a firm equals the present value of future cash flows from all of that firm’s securities. The book value of a firm equals the present value of future cash flows from all of that firm’s securities. True False True False Question 2 2 points 2 points 2 points 2 points 2 points Save Which of the following is/are true: Which of the following is/are true: The Beta of a U.S. Treasury Bill is zero The Beta of the market is one The estimate of Beta for a given stock will vary from analyst to analyst depending on the time period used, and the market portfolio used to estimate Beta. All of the above are true The Beta of a U.S. Treasury Bill is zero The Beta of the market is one The estimate of Beta for a given stock will vary from analyst to analyst depending on the time period used, and the market portfolio used to estimate Beta. All of the above are true Question 3 2 points 2 points 2 points 2 points 2 points Save The risk-return relationship for each financial asset is shown on: The risk-return relationship for each financial asset is shown on: the capital market line the New York Stock Exchange market line the security market line none of the above the capital market line the New York Stock Exchange market line the security market line none of the above Question 4 2 points 2 points 2 points 2 points 2 points Save If market interest rates rise: If market interest rates rise: Short-term bonds will decline in value more than long-term bonds. Short-term bonds will rise in value more than long-term bonds. Long-term bonds will decline in value more than short-term bonds. Long-term bonds will rise in value more than short-term bonds. Short-term bonds will decline in value more than long-term bonds. Short-term bonds will rise in value more than long-term bonds. Long-term bonds will decline in value more than short-term bonds. Long-term bonds will rise in value more than short-term bonds. Question 5 2 points 2 points 2 points 2 points 2 points Save Many preferred stocks have a feature that requires a firm to periodically set aside an amount of money for the retirement of its preferred stock. What is the name of this feature? Many preferred stocks have a feature that requires a firm to periodically set aside an amount of money for the retirement of its preferred stock. What is the name of this feature? Convertible Callable Cumulative Sinking fund Convertible Callable Cumulative Sinking fund Question 6 2 points 2 points 2 points 2 points 2 points Save Assume that you have $100,000 invested in a stock whose beta is .85, $200,000 invested in a stock whose beta is 1.05, and $300,000 invested in a stock whose beta is 1.25. What is the beta of your portfolio? Assume that you have $100,000 invested in a stock whose beta is .85, $200,000 invested in a stock whose beta is 1.05, and $300,000 invested in a stock whose beta is 1.25. What is the beta of your portfolio? 0.97 1.02 1.21 1.12 0.97 1.02 1.21 1.12 Question 7 2 points 2 points 2 points 2 points 2 points Save A disadvantage of junk bonds is that they do not provide a coupon payment, and only make a par value payment at maturity. A disadvantage of junk bonds is that they do not provide a coupon payment, and only make a par value payment at maturity. True False True False • Show less