a)The slope of an asset's security market line is the:

Select one:

1. reward-to-risk ratio.

2. portfolio weight.

3. beta coefficient.

4. none of the above

5. a. and c. only

b)

The value of a firm is maximized when the:

Select one:

1. weighted average cost of capital is minimized.

2. levered cost of capital is maximized.

3. tax rate is zero.

4. cost of equity is maximized.

5. debt-equity ratio is minimized.

c)

The optimal capital structure:

Select one:

1. of a firm will vary over time as taxes and market conditions change.

2. is unaffected by changes in the financial markets.

3. will be the same for all firms in the same industry.

4. places more emphasis on the operations of a firm rather than the financing of a firm.

5. will remain constant over time unless the firm makes an acquisition.

d)

Beta measures depend highly on the:

Select one:

1. direction of the market variance.

2. overall cycle of the market.

3. variance of the market and asset, but not their co-movement.

4. covariance of the security with the market and how they are correlated.

5. All of the above.