FINA 3000 POPE TEST 2 T F QUESTIONS AND CORRECT ANSWERS

1 of 20

Term Definition



7) If we were to rank based on FALSE
risk to the investor, preferred
stock would be considered
riskier than debt and common
stock




Give this one a try later!



True False




2 of 20

Term Definition



2) With the security market line, TRUE
our model would predict a
decline in stock prices if the

, Federal Reserve were to raise
interest rates



Give this one a try later!



True False




3 of 20

Term Definition



5) A firm with more cyclical FALSE
revenue will have a higher beta
than a similar firm with non-
cyclical revenue

Give this one a try later!



True False



Correct definition



TRUE




4 of 20

Term Definition



11) The risk-free investment TRUE
should have a beta equal to 1