An efficient capital market is one in which: Group of answer choices Securities always offer a positive rate of return to investors. Brokerage commissions are zero. Trading floor doesn't waste electricity Taxes are irrelevant. Security prices quickly adjust to reflect new information. Security prices are guaranteed by the Securities and Exchange Commission to be fair.

Assume arithmetic average annual returns are as follows:

Large corporate stocks: 10.1%

BBB-rated corporate bonds: 6.6%

AAA-rated corporate bonds: 5.9%

US T- Bonds: 3.8%

Inflation: 3.1%.

Given the data above, the BBB-rated corporate bonds therefore tend to earn a __ risk premium. Group of answer choices 0.7% 2.8% 6.3% 2.1% 3.5%

'

Which of the following statements is CORRECT? Group of answer choices

It is theoretically possible for a stock to have a beta of 1.0. If a stock did have a beta of 1.0, then, at least in theory, its required rate of return would be equal to the risk-free (default-free) rate of return, rRF.

If you found a stock with a zero historical beta and held it as the only stock in your portfolio, you would by definition have a riskless portfolio.

The beta of a portfolio of stocks is always larger than the betas of any of the individual stocks.

The beta coefficient of a stock is normally found by regressing past returns on a stock against past market returns. One could also construct a scatter diagram of returns on the stock versus those on the market, estimate the slope of the line of best fit, and use it as beta. However, this historical beta may differ from the beta that exists in the future.

The beta of a portfolio of stocks is always smaller than the betas of any of the individual stocks.