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Please show your work. Thank you. I need this done by tomorrow morning! Much appreciated. Finance 335, Fall 2016, Exam 2, Part 1 STUDENT NAME

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Please show your work. Thank you. I need this done by tomorrow morning! Much appreciated.

image text in transcribed Finance 335, Fall 2016, Exam 2, Part 1 STUDENT NAME ________________________ 1.) As interest rates rise, one would expect stock prices to __________ and/but bond prices to ___________. A. decrease, decrease B. increase, decrease C. increase, increase D. decrease, increase E. remain stable, decrease 2.) The Fisher effect is defined as the relationship between which of the following variables? A. default risk premium, inflation risk premium, and real rates B. real rates, inflation rates, and nominal rates C. interest rate risk premium, real rates, and default risk premium D. nominal rates, real rates, and interest rate risk premium. E. real rates, interest rate risk premium, and nominal rates 3.) A Treasury yield curve plots Treasury interest rates relative to which one of the following? A. market rates B. comparable corporate bond rates C. maturity D. inflation E. the risk-free rate 4.) A stock's (Beta Coefficient) is a measure of: A. B. C. D. E. The stock return's sensitivity to unsystematic risk The stock return's sensitivity to total risk The stock's value The stock return's sensitivity to systematic risk price of the stock relative to its earnings. 5.) In the article \"How Rational is the Stock Market\

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