5. The risk that a firms stock price might be adversely affected by the U.S....
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Finance
5. The risk that a firms stock price might be adversely affected by the U.S. economic recession is an example of systematic risk.
a) True b) False
Which of the following coupon bond carries the largest amount of interest rate risk?
5 year coupon bond
8 year coupon bond
10 year coupon bond
20 year coupon bond
The yield to maturity for a bond selling at discount is:
above the coupon rate
below the coupon rate
equal to the coupon rate
none of the above are correct
Assume that you currently hold one type of security and decide to construct a portfolio. Which of the following would provide the highest degree of risk reduction?
adding a security that has perfect negative correlation with the one your are holding
adding a security that has perfect positive correlation with the one your are holding
adding a security that is uncorrelated with your current one
adding a positively, but not perfectly correlated security.
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