What is the uncertain or risky return on a security? Multiple choice question. It is the portion of the return on a security that depends on unknown information. It is the portion of the return on a security that is unaffected by any present or future information. It is the portion of the return on a security that depends on known information. It is the return on a security that is classified as risky by bond rating agencies.

Define the real risk-free rate (r*). What security canbe used as an estimate of r*? What is the nominalrisk-free rate (rRF)? What securities can be used asestimates of rRF?

Which is correct about security valuation? A. In an efficient market, several factors would affect the market and value is not necessarily equals the price. B. The value of the security is determined to compare it with the current market price and usually investor would buy when the value equals the price. C. Sellers would prefer the accept lower bid price than higher bid price to realize gains. D. Investors buy securities when securities are underpriced and sell them when it is overpriced. E. All of the above F. None of the above

Explain what a “riskless hedge” is and how the riskless hedge concept is used in theBlack–Scholes OPM.

What effect do antidilutive securities have on EPS when exercised? (NIE 8) They can reduce or increase EPS, depending on the nature of the security. They reduce EPS.None. They don't effect EPS. They increase EPS.

What type of risk is the risk that belongs to the market as a whole?     Systematic risk     Unsystematic risk (or nonsystematic risk)     Total risk

What is the primary motivation of investors in performing security analysis? A-identify the best times to buy and sell securities  B-Contribute to the efficiency of securities markets C-Identify securities whose insrinsic values are at or near their market values  D-Identify mispriced stocks

The purpose of the Securities Act of 1933 is to regulate a security's investment price. True False

When are losses in noncurrent security investments recognized?

How can an investor eliminate Unsystematic Risk?