QUESTION 33 "If a bond is downgraded from Aa rating to A rating, what is most likely happen to the bond price?" Increase Stays constant Decrease Cannot be determined QUESTION 34 "Generally, which of following assets is considered to be the most liquid?" Office building Patent Finished goods inventory Accounts receivable QUESTION 35 "You believe that Omega stock which has a beta of 1.2 will return 10.0% this coming year. The market is expected to return 8% and T-bills return 2.4%. According to CAPM, which one of these statements is correct given this information?" The stock is currently underpriced The stock plots below the security market line. The risk premium on the stock is too low given the stock's beta. The stock fits on the security market line. QUESTION 36 Long-term Treasury bonds usually offer higher return than treasury notes due to: maturity premium default premium the uncertainty of their maturity date higher coupon rate QUESTION 37 "After learning the course, you divide your portfolio into three equal parts, with one part in Treasury bills, one part in a market index, and one part in a mutual fund with beta of 1.80. What is the beta of your overall portfolio" 0.5 0.66 0.93 1.11