1. If interest rates rise, what will bond prices do? What type of bonds will show the biggest change in price? (High or low coupon? Long or short maturity?)

1. If interest rates stay constant, how will a bond's price change as time passes?

1. What is a callable bond?

1. A stock recently paid a $2 dividend. If that dividend is expected to grow by 10% per year, what should the stocks price be if you require a 12% return?

1. A stock is expected to pay a $1.40 dividend at the end of one year. If you expect the dividend to grow by 6% per year, what should the stock price be if the required return is 10%?

1. A stock has a beta of 1.20. If the risk-free rate is 2% and the market risk premium is 6%, what does the CAPM say that the stocks required return should be?

1. Standard deviation measures ________ risk. Beta measures _________ risk.

1. Combining stocks with __________ correlation will create the most diversification. (high/low)

1. You are considering an investment that will make 8% over the next year. However, inflation is expected to be 3%. According to the Fisher Equation, what is your approximate real return on the investment?

1. You bought a stock last year for $55. During the year, it paid a $2 dividend. Youre selling it today for $62. What is your percent return on this investment?