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2.1.5 Finance MCQ
Step by step
Solved in 2 steps
- Beta is which of the following: A) standard deviation. B) total risk. C) Beta is the relationship which is between an investment's return, and the market return. D) unsystematic risk.An investment with a high return is likely to be high riskA. TrueB. FalsePortfolio standard deviation is negatively associated with the covariance among the assets in the portfolio. Select one: True False
- Give typing answer with explanation and conclusion The additional compensation that investors require to take on higher risk investments is the a. standard deviation. b. coefficient variation. c. Sharpe ratio. d. risk premium. e. risk aversion.A "risk-premium" is the difference between ___________________________ . A) the variance of a stock's returns compared to variance of the market's returns B) systematic and unsystematic risks C) market and firm-specific risks D) an asset's expected return and the risk-free rateThe risk associated with the overall market is referred to as _____ risk. a. unsystematic b. diversified c. portfolio d. systematic
- The efficient frontier represents: a) The set of investments with the lowest risk b) The set of investments with the highest return c) The set of portfolios offering the highest return for a given level of risk d) The set of portfolios offering the lowest return for a given level of riskinvestments with low return variances usually: a. have a high return standard deviation b. have very high returns c. have realized returns higher than expected returns d. none of these options e. have realized returns close to exoexted returnsMarket risk is referred to as: systematic risk. total risk. diversifiable risk. asset specific risk. Standard deviation and beta both measure risk, but they are different in that beta measures both systematic and unsystematic risk. beta measures only systematic risk while standard deviation is a measure of total risk. beta measures only unsystematic risk while standard deviation is a measure of total risk. beta measures both systematic and unsystematic risk while standard deviation measures only systematic risk. beta measures total risk while standard deviation measures only nonsystematic risk. Buying common stock is riskier than buying a U.S Treasury bill. state reason in 'other' true False Other: Which one of the following statements is an example of unsystematic risk? The number of vehicles sold by a major manufacturer was less than anticipated. GDP was 0.5 percent lower than expected. The inflation rate increased by 5 percent. The value of the dollar declined against…
