1) When zero curve is upward sloping, which two of the give statement is true?
(i) The one-year par yield is always less than one-year zero rate..
(ii) The one-year par yield is always greater than one-year zero rate.
(iii) The one-year zero rate is always less than forward rate for period between 1 year and 1.5 years.
(iv) The one-year zero rate is always greater than forward rate for period between 1 year and 1.5 years
2) Describe beta, mention what it measures, and describe its usefulness in finding the systematic or non-systematic risk of a security. Provide an example. Mention 4 pitfalls to avoid in use of discounted cash flow analysis.