**Question 7:**The person who requires high return regardless of risk is called:- (a) There is no difference between return & risk preference.- (b) Risk averse- (c) Risk neutral (indifferent)- (d) Risk seeking**Question 8:**If the correlation between two variables is -1, then the two variables are said to be:- (a) Perfectly positively correlated- (b) Positively correlated- (c) Perfectly negatively correlated- (d) Perfectly negatively corrected**Question 9:**The risk that is specific to a firm is called:- (a) Total risk- (b) We cannot tell- (c) Unsystematic risk- (d) Systematic risk**Question 10:**Assume that an investor has formed a portfolio of two assets, Asset A and Asset B. If he invested 30% of his wealth in Asset A, if the return on Asset A is 20% and the return on the asset B is 40%, the weight of the wealth invested in Asset B is:- (a) 70%- (b) Cannot find the weight- (c) 60%- (d) 40%**Question 11:**Referring to the question above, the portfolio’s return is:- (a) 40%- (b) 34%- (c) 30%- (d) 31%

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Answered: he person who requires high return…

he person who requires high return regardles bf nsk s called (a There 1s no difference between return d riok preference. Drish averse O risk neutral (indifferent) (ay risk seeking

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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