17. In __________ arrangement, where the investment banker purchases the entire issue at a pre-determined price and resell it for profit. (Points : 3)

firm commitment underwriting competitive bidding rights offer none of the above

Question 18.18. The most relevant risk that must be considered for any widely traded individual security is its ____. (Points : 3)

unsystematic risk standard deviation covariance risk systematic risk

Question 19.19. Texas Computers (TC) stock has a beta of 1.5 and American Water (AW) stock has a beta of 0.5. Which of the following statements will be true about these securities? (Points : 3)

The addition of TC would reduce portfolio risk more than the addition of AW. The addition of AW would reduce total portfolio risk more than the addition of TC. The required return for TC is greater than the required return for AW. The required return for AW is greater than the required return of TC.

Question 20.20. The risk-free rate of return can be thought of as consisting of the following two components: (Points : 3)

a real rate of return, a default premium unanticipated inflation, bond default premium a real rate of return, an inflation premium a zero beta component, an expectation premium