Which of the following statement is incorrect?

Group of answer choices

Most of the answers are correct.

The more correlated the returns of assets in a portfolio are, the gains on some assets offset losses on others, resulting in a reduction of the portfolios risk.

The return that well-diversified investors demand when they buy a security, as measured by the CAPM and beta, relates to the degree of nondiversifiable risk in the security.

The coefficient of variation measures the standard deviations percentage of the expected value.

Nondiversifiable risk is measured by a term called beta.

Which of the following statement is incorrect?

Group of answer choices

Most of the answers are correct.

Money we owe is more burdensome if it is to be paid in the future rather than now.

The annuity is a series of equal cash flows, spaced evenly over time.

Annuities due is the payments are made/received at the beginning of the period.

A perpetuity is a series of equal payments at equal time intervals that will be received into infinity.

Which of the following statement is incorrect?

Group of answer choices

Bonds with lower than investment-grade ratings (Ba1 or below by Moodys and BB+ or below by Standard & Poors) are called junk bonds.

A bond that is not backed by any collateral is called a debenture.

The corporation that issues a bond is the bond holder, and the investor who buys the bond is the owner.

Most of the answers are correct.

Preferred stock is a hybrid security that has debt and equity characteristics.

Which of the following statement is incorrect?

Group of answer choices

When the YTM is less than the coupon rate, the bond sells at a premium over face value.

The liquidation value and book value valuation methods are similar, except that the liquidation method uses the market values of the assets and liabilities, not book values.

The present value of the companys bond coupons represent enterprise value or the market value of the firms core income producing operations.

Most of the answers are correct.

The value of any security is the present value of its future cash payments.

Which of the following statement is incorrect?

Group of answer choices

As the interest rate increases, future value decreases.

Annuities in which the cash flows occur at the end of each of the specified time periods are known as ordinary annuities.

Most of the answers are correct.

A perpetuity can be described as an annuity that goes on forever.

An annuity that has payments that occur at the beginning of each period is an annuity due.