Reading 60: An Introduction to Security Valuation: Part II

答案和详解如下：

1.idence that a firm has high business risk would be provided by its volatile:

A)   fixed costs.

B)   operating profit.

C)   profit after taxes.

D)   sales.

The correct answer was B)

Business risk is one component of k, the required rate of return.

2.e nominal risk-free rate is equal to:

A)   one plus the real risk-free rate times one plus expected inflation.

B)   the real risk-free rate plus expected inflation, minus one.

C)   one plus the real risk-free rate times one plus expected inflation, minus one.

D)   the real risk-free rate minus expected inflation.

The correct answer was C)

The nominal risk-free rate is a function of the real risk-free rate and expected inflation:
nominal risk free rate = (1 + real risk-free rate)(1 + expected inflation) – 1
Note that the nominal rate is frequently estimated by summing the real rate and the rate of expected inflation.

3.e nominal risk-free rate is a function of the real risk-free rate and:

A)   the nominal expected market risk premium.

B)   the real expected market risk premium.

C)   expected bond yields.

D)   expected inflation.

The correct answer was D)

The nominal risk-free rate is a function of the real risk-free rate and expected inflation:
nominal risk free rate = (1 + real risk-free rate)(1 + expected inflation) – 1

4.e real risk-free rate is approximately equal to:

A)   the nominal risk-free rate minus expected inflation.

B)   the nominal risk-free rate plus expected inflation.

C)   the ratio of the nominal risk-free rate to the real expected market risk premium.

D)   expected inflation.

The correct answer was A)

The nominal risk free rate is a function of the real risk-free rate and expected inflation:
nominal risk free rate = (1 + real risk-free rate)(1 + expected inflation) – 1
 real risk-free rate + expected inflation

Therefore the real risk-free rate is approximately equal to:
nominal risk-free rate – expected inflation.

5.f expected inflation increases, all else equal, the:

A)   real market risk premium will increase.

B)   nominal risk-free rate will decrease.

C)   real market risk premium will decrease.

D)   nominal risk-free rate will increase.

The correct answer was D)

The nominal risk free rate is a function of the real risk-free rate and expected inflation:
Nominal risk free rate = (1 + real risk-free rate)(1 + expected inflation) – 1
If expected inflation increases, but the real risk-free rate stays the same, the nominal risk-free rate will increase.