PREGUNTA 9

The risk-free rate is usually approximated by _________

A) the retum on bank savings accounts

B) the return on Treasury bills

C) the return on money market mutual funds.

D) Neither A, B nor C

PREGUNTA 10

The market risk premium is defined as _______

A) the difference between the return on an index fund and the return on Treasury bilis

B) the difference between the return on a small firm mutual fund and the return on the Standard and Poor's 500 index

C) the difference between the retum on the risky asset with the lowest retums and the return on Treasury bills

D) the difference between the retum on the highest yielding asset and the lowest yielding asset.

PREGUNTA 11

Which of the following beliefs would not preclude charting as a method of portfolio management?

A) The market is strong form efficient

B) The market is semi-strong form eficient.

C) The market is weak form efficient.

D) Stock prices follow recurring pattems.

PREGUNTA 12

_____ is not a derivative security.

A) A share of common stock

B) A call option

C) A futures contract

D) A & B above are derivative securities