13. Which of the following bonds would you expect to have the least price volatility?

a) 10%, 10 year bond b) 10%, 5 year bond c) 5%, 10 year bond d) 5%, 5 year bond

14. The daily settlement system at the futures exchange requires that

a. for every contract, the participant has to open an account with the maintenance margin

b. the opening futures price of that asset will be used every day to find profits/losses for the client

c. the client must be able to keep the balance above the margin requirement

d. all of the above are true.

15. If an asset is placed _________ the security market line, it is said to be ______________

a) over, overpriced b) under, overpriced c) both (a) and (b) are true d) none of these are true.

. Asset A has a return of 14% and its risk is 16%. Asset Bs return is 24% and its risk is 28%. In terms of coefficient of variation, the choice for the investor should be

a) Asset B b) Asset A c) either asset A or B d) none of these.

Security A and B have a correlation coefficient of -0.25. If Security As return is expected to increase by 4%, Security Bs return

a) should also increase by 4%. b) should decrease by 1%.

c) should also decrease by 4%. d) should increase by 1%