1. The Security Market Line has __________ .

A. a positive slope

B. a negative slope

C. no slope

D. a beta of 1.0

2. MicroMedia Inc. $1,000 par value bonds are selling for $1,265. Which of the following statements is TRUE?

A. The bond market currently requires a rate (yield. less than the coupon rate.

B. The bonds are selling at a premium to the par value.

C. The coupon rate is greater than the yield to maturity.

D. All of the above are true.