Question: 6. How does the impact of default change between first mortgage, second mortgage bonds, debentures and subordinated debentures? 7. What is the difference between systematic

6. How does the impact of default change between first mortgage, second mortgage bonds, debentures and subordinated debentures? 7. What is the difference between systematic risk and unsystematic risk? 8. Using CAPM, what is the required rate of return on an investment in Capital Inc if it has a beta of 1.25, and the market return is expected to be 10% and the risk free rate is 6%? What is the required rate of return if the risk free rate drops to 3%?

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