Question o Which one of the following categories of securities had the most volatile annual returns over the period 1926-2016? Large-company stocks Small-company stocks U.S. Treasury bills Intermediate-term government bonds Long-term corporate bonds Question 7 According to CAPM, the beta of a risk-free asset is reward-to-risk ratio. market risk premium one. the risk-free rate. . zero. Question 8 Unsystematic risk: is measured by beta. is measured by standard deviation. is compensated for by the risk premium. can be effectively eliminated by portfolio diversification. is related to the overall economy. The dividend growth model (DGM) cannot be used to compute the cost of equity for a firm that pays an increasing dividend. has a retention ratio of 100 percent. has a dividend payout ratio of 100 percent. reduces its dividend on a regular basis. pays a constant dividend year after year. The weighted average cost of capital (WACC)for a firm can depend on all of the following except the firm's beta. standard deviation of the firm's common stock growth rate of the firm's dividends. coupon rate of the outstanding bonds. firm's marginal tax rate