1. According to the capital asset pricing model (CAPM), fairly priced securities should have _______
A beta of 1
A non-zero alpha
A fair return based on the level of unsystematic risk
A fair return based on the level of systematic risk
2. You purchased a three year bond at par when yields are 10%. You hold the bond to maturity and reinvest your coupon at 10% which of the following is likely to be true?
a. The realized compound yield will be greater than 10%
B. the realized compound yield will be less than 10%
C. the holding period return is than 10%
D. the yield to maturity and realized compound yield will be equal