e the expected return on a security will be affected by all of the 1 Accordine te cine model the expected return on as cording to the capital asset following except the: A Market risk premium B Risk-free rate. C Market rate of return. D Security's standard deviation. E Security's beta. systematic risk? 2 Which one of the following is the best ex ich one of the following is the best example of A Inflation exceeding market expectations B Grounding of airplanes for manufacturing defect C Decrease in corporate tax rates D Decrease in the value of the dollar E Increase in consumer spending 11 3 Which one of these Which one of these represents systematic ris2 A Major layoff by a regional manufacturer of power boats B Increase in consumption created by a reduction in personal tax rates C Surprise firing of a firm's chief financial officer D Closure of a major retail chain of stores E Product recall by one manufacturer The clientele effect states that investors fall into various groups because of differences in their preferences |for which one of the following: E A Dividends B Short-term versus long-term investments C Share price levels D Risk level E Rates of return Even if both dividends and capital gains are taxed at the same income tax rate, the effect of each type of tax is different because A Capital gains are actually taxed, while dividends are taxed on paper only B Dividends are taxed when distributed, while capital gains are deferred until stock is sold. c Both dividends and all capital gains are taxed every year. D Tax on stock gains can be avoided by buying another stock E Tax on dividends can be avoided by reinvesting the dividends in stock According to financial executives' views on dividend policy, which of the following statements is most frequently cited for determining dividend policy? A To issue dividends on a residual basis B To meet legal requirements to pay dividends to common stockholders C To avoid reducing the dividend. D To create the opportunity for special dividends. E To keep increasing the current dividend level