According to the capital asset pricing model

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Reference no: EM132068556

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

Reference no: EM132068556

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