Calculated by regressing stock historic returns

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Reference no: EM132040438

1. A bond with 15 years left to maturity makes coupon payments of $40.00 semiannually and sells for $1,150.00. The bond’s annual yield to maturity (compounded semiannually) is:

3.21%

3.48%

4.00%

6.43%

6.96%

8.00%

2. If the slope of the best-fit line calculated by regressing a stock’s historic returns against the market’s historic returns is positive, then the stock:

A. has no unique (or firm-specific) risk.

B. is a good investment

C. is a bad investment.

D. has a positive beta.

E. has a negative beta.

Reference no: EM132040438

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