Which of the following Industries is a good investment if the stage of the business cycle is Trough?

Question 13 options:

A)	Pharmaceuticals.

B)	Luxury goods or consumer durables. Luxury goods or consumer durables.

C)	Natural resource.

D)	Transportation and construction.

If the bonds YTM remains constant, then in one year, which of the following bonds price will be drifting downward to a lower price level?

Question 14 options:

A)	A bond with Coupon rate = 6.00% and YTM = 6.00%

B)	A bond with Coupon rate = 5.25% and YTM = 6.25%

C)	A bond with Coupon rate = 0% and YTM = 6.20%

D)	A bond with Coupon rate = 6.75% and YTM = 6.15%

E)	A bond with Coupon rate = 5.65% and YTM = 6.00%

Are the following two statement true?

(i) Suppose investors believe that the standard deviation of the market-index portfolio has increased by 25%. Assume that beta of Googles stock is 1.15 and remains unchanged, and risk-free rate of return remains at 3%. The CAPM model implies that the required rate of return on Googles stock should increase.

(ii) If two assets, A and B, have a correlation coefficient equal to 1 (perfectly and positively correlated), then there is not diversification benefit when we hold both of them.

Question 15 options:

A)	(i) False; (ii) True

B)	(i) False; (ii) False

C)	(i) True; (ii) True

D)	(i) True; (ii) False