Author Question: Cranston Cranks Inc. is a manufacturer of high quality bicycle components. The firm's levered beta ... (Read 84 times)

Jipu 123 · **on:** Jul 11, 2018

Cranston Cranks Inc. is a manufacturer of high quality bicycle components. The firm's levered beta is equal to 1.20. When added to a well-diversified portfolio that matches the market beta, the firm would ________ the portfolio beta.

A) increase
B) decrease
C) not affect
D) There is insufficient information to answer this question.

Question 2

Examine the securities below and identify the security with the highest liquidity premium, the highest default
risk premium, and the highest maturity premium.

a. 30-year U.S. Government Treasury bond maturing in 2025
b. 25-year Bbb-rated corporate bond maturing in 2030, actively traded on the New York Exchange
c. 10-year Aaa-rated corporate bond maturing in 2020, thinly traded on a regional exchange
d. 3-month U.S. Treasury bill

sabina576 · **Reply #1 on:** Jul 11, 2018

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