Which of the following is the risk due to a changes in the stock market?      Business risk     Financial risk     Market risk     Interest rate risk     Purchasing power risk     Exchange rate risk

Q: Can an investor eliminate market risk from a common stock portfolio?

A: There are two types of Risk 1. Systematic  Risk:- These are risk pertains to Industry as a whole not…

Q: Unsystematic risk is * a.the risk associated with movements in securities prices B.higher when…

A: Risk is referred as uncertainty or loss. Financial risk is referred as the variability of actual…

Q: o risk premiums influence financial decisions regarding risk and re

A: Step 1 A risk premium is an investment return that is expected to generate more than the level of a…

Q: How does the emergence of interest-rate risk helpexplain financial innovation?

A: Interest rate risk is defined as the risk that is faced by the bond holders because of the changing…

Q: Why might the stock price changing make sense within the context of risk and return?

A: Stock price movement is dependent on various factors which would eventually impact the required rate…

Q: What does the capital asset pricing model (CAPM) calculate?   a. The expected rate of return on…

A: Capital Asset Pricing Model (CAPM) is a financial model used to determine expected return on an…

Q: Which of the following is the risk due to exchange rates?      Business risk     Financial risk…

A: The investments that we make in debt, equity and other financial securities are exposed to different…

Q: How does forward pe effect the stock market?

A: P/E refers to the price earnings ratio. It is one of the important valuation metrics that we use in…

Q: How is risk defined and measured? How might the magnitude of the market risk premium impact…

A: In financial terms, the risk is referred to as the possibility that an outcome's actual gains will…

Q: Which of the following is/are an examples of unsystematic risk of a stock   O a Political risk…

A: Operating Risk

Q: Which of the following is the risk due to inflation?      Business risk     Financial risk…

A: In the dynamic landscape of finance and investments, one risk looms large, silently eroding the…

Q: Can an investor eliminate market risk from a portfolio of common stocks?

A: Beta is a systemic risk of this kind. The risk integral to the business or segment as a whole is…

Q: The Capital Asset Pricing Model (CAPM) considers which type of risk in pricing the expected returns…

A: Capital Asset Pricing Model is used for pricing risky securities. It describes the risk and return…

Q: What is relationship between the market risk of a stock and it's expected return?

A: Expected return is directly related to the market risk . Market risk is represented by beta. Higher…

Q: Suggest what is the best financial instrument to offset market risk exposure and from market…

A: The question is based on the concept of hedging the market risk and volatility by use of a proper…

Q: To what extent does investor mood contribute to the observed fluctuati

A: Introduction : In simple words, the given question relates to the concept of emotion investing,…

Q: n the general stock and bond markets lead to changes in the required rate of return on a firm’s…

A: Step 1 The required reimbursement rate is the minimum refund that an investor will receive from…

Q: What role does sentiment play to explain stock price volatility? Explain

A: The role of emotion in determining the price of a company is one of the most significant aspects to…

Q: From the perspective of the treasury professional, which of the following is a type of market risk…

A: Financial risk is the risk that that indicate the chances of loss that can be incurred to the…

Q: Are stock prices affected more by long-term or short-termperformance? Explain.

A: Answer: The stock prices are influenced by results in both the long and the short term. The…

Q: Which of the following risks is also known as market risk?  a.interest rate risk   b. systematic…

A: Market risk is the risk of a probability of loss for an entity due to factors which impact the…

Q: Which asset below is generally the most suitable benchmark measure of the risk-free return?…

A: Risk free rate is rate of return which is quite certain an can be attained without any problem and…

Q: What is idiosyncratic risk? How does it differ from market risk?

A: Idiosyncratic risk or unsystematic risk or specific risk is that risk which belongs to specific…

Q: Market risk arises from the level or volatility of market prices of assets. It involves the exposure…

A: Market risk is the chance of suffering losses as a result of price changes that are unfavorable for…

Q: Define systematic and unsystematic risk. What method is used to measure a firm's market risk?

A: Risk -It is the volatility of returns. There are several types of risks: i) Systematic risk ii)…

Q: which of the following risks is most closely associated with off balance sheet? trading risk

A: Off balance sheet practice means when some liabilities and assets are not part of company's balance…

Q: How does market cap effect the stock market?

A: Market capitalization is given by the formula: Market capitalization = Price per share x No. of…

Q: Discuss the impact of investor sentiment on stock returns conditional on economic conditions

A: Investor's sentiment means the attitude of the investors toward different securities or even the…

Q: . What effect does increasing inflation expectations have on the required returns of investors in…

A: Interest refers to the amount charged by the lender on the lent amount. The borrower of the loan is…

Q: What type of risk is the risk that belongs to the market as a whole?     Systematic risk…

A: Risk is an inherent part of investing. There is always the possibility that an investment will lose…

Q: What risk is due to changes in the level of interest rate in the economy and may affect industries…

A: Change in level of interest rate in the economy affects industries at the same time and is a major…

Q: What does this implyabout detecting bubbles in the stock market?

A: Bubbles in stock market means when the prices of all the stocks exceed its fundamental value by a…