In Normal Market Conditions If a Security Has a Negative

question 15

Multiple Choice

In normal market conditions if a security has a negative beta:

• A) the security always has a positive return.
• B) the security has an expected return above the risk-free return.
• C) the security has an expected return less than the risk-free rate.
• D) the security has an expected return equal to the market portfolio.

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Definitions:

Par Value

Par Value is the nominal or face value of a security as stated by the issuer, and it's the price at which bonds are to be redeemed at maturity.

Coupon Payment

The periodic interest payment made to bondholders during the life of the bond.

Eurobonds

International bonds issued in a currency not native to the country where it is issued, allowing companies and governments to raise capital in the international market.

Pound-Denominated

Refers to financial assets or transactions valued or conducted in British pounds sterling.