1. If the risk/return performance of a stock lies above the Security Market Line, the stock is said to have a:
a. Positive covariance
b. Positive expected return
c. Positive correlation coefficient
d. Positive alpha
2. A bond has a 25-year maturity, an 8% annual coupon paid semiannually, and a face value of $1,000. The going nominal annual interest rate (rd) is 6%. What is the bond's price?
A. $1,515.25
B. $1,000
C. $1,257.30
D. $1,255.67
3. A manager who evaluates portfolios' investment performance adjusted for systematic risk is most likely to rank portfolio based on their
a. Correlation Coefficient
b. Sharpe's ratios
c. Treynor mearsures
d. R-squared
4. Which of the following accounts is not tax-deferred?
a. Annuity
b. Mutual Fund
c. 401(k) and Traditional IRA
d. Pension