1. (TCO 1) An investment in common stock carries a higher return than a bank cer
ID: 2678728 • Letter: 1
Question
1. (TCO 1) An investment in common stock carries a higher return than a bank certificate of deposit. The difference in returns is called (Points : 4)the risk-free rate.
the real rate of return.
the risk premium.
the beta.
2. (TCO 1) Which of the following best describes the function of an investment banker selling an issue on a "best efforts" basis? (Points : 4)
Return unsold securities to the firm
Create a market for the securities
Guarantee a continuous liquid market
Private placements to financial institutions
Explanation / Answer
the real rate of return. Guarantee a continuous liquid market
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