#1 In order from smallest to largest:

• A. current, acid, burn
• B. burn, current, acid
• C. current, burn, acid
• D. burn, acid, current
• E. acid, current, burn

#2

r_f + _s[E(r_m) - r_f] is the...

• A.

  risk-free rate.

• B.

  expected market premium.

• C.

  capital asset pricing model.

• D.

  none of the above.

#3

Which risk premium would have the smallest default premium component?

• A. the yield on a 20-year corporate bond
• B. the APR on a car loan
• C. the yield on commercial paper
• D. the yield on a three-month T-bill

#4 The risk-free rate includes the real rate of return.

• A. True
• B. False

#5 A one-year Treasury instrument is issued at a quote of 98.70. Rounded to two decimal places as a percent, the yield is _____.