A beta coefficient for a risky stock is

a.

less than 1.0

b.

negative

c.

equal to 1.0

d. greater than 1.0

If a bond is selling for a discount, that implies

1.	interest rates have fallen
2.	interest rates have risen
3.	the yield to maturity exceeds the current yield
4.	the yield to maturity is less than the current yield

a.

2 and 3

b.

1 and 4

c.

2 and 4

d. 1 and 3

If investors anticipate that interest rates will fall, they

a.

should buy shares in money market mutual funds

b.

should buy bonds

c.

should take no action

d.should sell bonds

The yield to maturity assumes that

	a.	the bond will be called
	b.	the coupon will increase with higher interest rates
	c.	the bond will not be called
	d.	the coupon will decrease with lower interest rates

Which of the following is not true if interest rates rise?

	a.	The market price of a zero coupon bond falls.
	b.	Existing bonds may be called.
	c.	Prices of existing bonds fall.
d.The yield to maturity rises more than the current yield.