[单项选择]An analyst is investigating the security market line (SML). Given no major changes in asset risk characteristics, which of the following changes is most likely to be associated with an increase in the slope of the security market line（）
A. A decrease in inflation expectations.
B. An increase in the yield spread between A-rated and B-rated bonds.
C. A decrease in the yield spread between A-rated and B-rated bonds.

[单项选择]An analyst is investigating the distribution of the SMG stock’s return over time. He calculated the mode of 12 percent, the mean of 11 percent, and the median of 11.5 percent. The distribution can be best described as:（）
A. positively skewed, with a long tail on the left side.
B. negatively skewed, with a long tail on the left side.
C. positively skewed, with a long tail on the right side.

[单项选择]An analyst is investigating one stock with high after-tax return above the benchmark and is concerned about his perceptions of slowdown in the macroeconomic next year. So he adjusts the historical probability of the stock’s return above the benchmark. The analyst is best characterized as gaining a(n):（）
A. a priori probability.
B. objective probability.
C. empirical probability

[单项选择]Joseph Adams must diagram the security market line (SML) in order to determine if several assets he is considering adding to his portfolio are fairly priced. Adams observes that the risk-free rate currently available in the market is 4.2 percent. Adams has also calculated the required return on the market portfolio to be 13.5 percent. Which of the following statements is FALSE（）
A. The SML must be graphed using the standard deviation of the market portfolio. 
B. Securities plotting above the SML are undervalued. 
C. The intercept of the SML in this case is equal to 4.2%.

[单项选择]A labor market analyst makes the following assertions about trends in labor income: Statement 1: The net effect of technological improvements has been to increase the demand for labor. This can be seen in the long-run increase in real wage rates. Statement 2: The broadest measure of labor income is total wages, salaries, and tips received. Are these two statements correct Statement 1 Statement 2 （）①A. Correct Correct ②B. Incorrect Correct ③C. Correct Incorrect
A. ①
B. ②
C. ③

[单项选择]A security market with price continuity is most accurately characterized as a market in which:（）
A. assets can be bought or sold quickly with minimal transaction costs.
B. prices change rapidly from one transaction to the next in response to new information.
C. prices do not change much from one transaction to the next in the absence of new information.

[单项选择]With respect to the security market line, if two risky assets have the same covariance with the market portfolio but have different estimated rates of return, the most accurate conclusion is that the two risky assets have:（）
A. the same amount of systematic risk, and both assets are properly valued.
B. different amount of systematic risk, and both assets are properly valued.
C. The same amount of systematic risk, and at least one of the assets is either overvalued or undervalued.

[单项选择]The security market line(SML) will resemble a band with fairly tight upper and lower bounds if the following assumptions are made. Which of the following should not be included in this list（）
A. Transaction costs.
B. Differences in investor tax brackets.
C. Unequal borrowing and lending rates.

[单项选择]An analyst is creating a new stock market index that is not affected by stock splits. The index the analyst is least likely to develop is:（）
A. unweighted.
B. price-weighted.
C. value-weighted.

[单项选择]When market rates were 6 percent an analyst observed a $1000 par value callable bond selling for $ 950. At the same time the analyst also observed an identical non-callable bond selling for $ 980. What would the analyst estimate the value of the call option on the callable bond to be worth

[简答题]

Researchers investigating brain size and mental ability say their work offers evidence that education protects the mind from the brain’s physical deterioration.
(46) is known that the brain shrinks as the body ages, but the effects on mental ability are different from person to person. Interestingly, in a study of elderly men and women, those who had more education actually had more brain shrinkage.
"That may seem like bad news," said study author Dr. Edward Coffey, a professor of psychiatry and of neurology at Henry Ford Health System in Detroit.
(47) However, he explained, the finding suggests that education allows people to withstand more brain tissue loss before their mental functioning begins to break down..
The study, published in the July issue of Neurology, is the first to provide biological evidence to support a concept called the "reserve" hypothesis, according to the researchers. In recent years,