7. The utility score a typical investor would assign to a particular portfolio, other things equal, • Will decrease as the standard deviation decreases. • Will incrase as the rate of return incraseses. • Will incrase as the covariance between assets in the portfolio incrases. • Will incrase as the risk aversion incrase.
7. The utility score a typical investor would assign to a particular portfolio, other things equal, • Will decrease as the standard deviation decreases. • Will incrase as the rate of return incraseses. • Will incrase as the covariance between assets in the portfolio incrases. • Will incrase as the risk aversion incrase.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![7. The utility score a typical investor would assign to a particular
portfolio, other things equal,
• Will decrease as the standard deviation decreases.
• Will incrase as the rate of return incraseses.
• Will incrase as the covariance between assets in the portfolio
incrases.
• Will incrase as the risk aversion incrase.
8. An empirical finding that returns on Dhaka Stock Exchange stocks
tend to be higher on the first trading day of the week would
contradict.
• Strong form of efficiency.
• Weak form of efficiency.
Semi-strong form of efficirency.
• None of the forms of efficiency.
9. The risk premium for treasury bills is expected to be
• Just the risk-free rate
• Zero
• Just market premium.
• Positive
10. Which of the following is not a source of systematic risk?
• Changes in foreign exchange rate
Changes in world petroleum price
• Changes in benchmark interest rate
• Changes in output of a company
11. According to the CAPM, all securities, including any portfolio of
securities, should offer the same reward-to-risk ration in
equilibrium.
• True
• False
12. In the CAPM word, a risky investment may earn a positive or
negative alpha.
• True
• False
13. The SML shows the equilibrium relationship between expected
return and total risk for all risky securities. Including any portfolio of
risky securities- diversified or not.
• True
• False](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe117c87c-eeec-4021-ad8c-09bc94c0a110%2F3904a2be-8644-4927-9c59-8781aa492019%2Fd1fnx9m_processed.jpeg&w=3840&q=75)
Transcribed Image Text:7. The utility score a typical investor would assign to a particular
portfolio, other things equal,
• Will decrease as the standard deviation decreases.
• Will incrase as the rate of return incraseses.
• Will incrase as the covariance between assets in the portfolio
incrases.
• Will incrase as the risk aversion incrase.
8. An empirical finding that returns on Dhaka Stock Exchange stocks
tend to be higher on the first trading day of the week would
contradict.
• Strong form of efficiency.
• Weak form of efficiency.
Semi-strong form of efficirency.
• None of the forms of efficiency.
9. The risk premium for treasury bills is expected to be
• Just the risk-free rate
• Zero
• Just market premium.
• Positive
10. Which of the following is not a source of systematic risk?
• Changes in foreign exchange rate
Changes in world petroleum price
• Changes in benchmark interest rate
• Changes in output of a company
11. According to the CAPM, all securities, including any portfolio of
securities, should offer the same reward-to-risk ration in
equilibrium.
• True
• False
12. In the CAPM word, a risky investment may earn a positive or
negative alpha.
• True
• False
13. The SML shows the equilibrium relationship between expected
return and total risk for all risky securities. Including any portfolio of
risky securities- diversified or not.
• True
• False
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Foundations Of Finance](https://www.bartleby.com/isbn_cover_images/9780134897264/9780134897264_smallCoverImage.gif)
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
![Fundamentals of Financial Management (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781337395250/9781337395250_smallCoverImage.gif)
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
![Corporate Finance (The Mcgraw-hill/Irwin Series i…](https://www.bartleby.com/isbn_cover_images/9780077861759/9780077861759_smallCoverImage.gif)
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education