1. ___________ has features similar to both equity and debt. Like a bond, it promises to pay its holder a fixed amount of income each year
1. municipal bond
2. convertible bond
3. preferred stock
4. a and b of the above.
5. none of the above.
2. The risk-free rate and the expected market rate of return are 0.04 and 0.10, respectively. According to the capital asset pricing model (CAPM), the expected rate of return on security X with a beta of 1.2 is equal to. Select one:
1. .112
2. 0.144
3. 0162
4. 0.132
5. 0.18