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Author Question: Which of the following investments has the highest effective annual return (EAR)? (Assume that all ... (Read 62 times)

swpotter12

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Which of the following investments has the highest effective annual return (EAR)? (Assume that all
  CDs are of equal risk.)
 
  A) a bank CD that pays 7.10 percent compounded monthly
  B) a bank CD that pays 7.30 percent annually
  C) a bank CD that pays 7.25 percent compounded semiannually
  D) a bank CD that pays 7.00 percent interest compounded daily

Question 2

Stock A has a beta of 1.2 and a standard deviation of returns of 18. Stock B has a beta of 1.8 and a
  standard deviation of returns of 18. If the market risk premium increases, then
 
  A) the required returns on stocks A and B will both increase by the same amount.
  B) the required return on stock A will increase more than the required return on stock B.
  C) the required returns on stocks A and B will remain the same.
  D) the required return on stock B will increase more than the required return on stock A.


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macagn

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swpotter12

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Reply 2 on: Jul 11, 2018
Great answer, keep it coming :)


juliaf

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Reply 3 on: Yesterday
Wow, this really help

 

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