PFIN 7:STUDENT EDITION-MINDTAP (1 TERM)
7th Edition
ISBN: 9780357033647
Author: Billingsley
Publisher: CENGAGE L
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Chapter 7, Problem 3LO
Summary Introduction
To discuss: The best type of loan based on finance charges, collateral, maturity.
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Students have asked these similar questions
The systematic risk principle argues that the market does not reward risks Blank______.
Multiple choice question.
in any circumstances
that are systematic
that are borne unnecessarily
that are nondiversifiable
Which of the following types of risk is NOT reduced by portfolio diversification?
Multiple choice question.
Unsystematic risk
Unique risk
Systematic risk
Neither systematic risk nor unsystematic risk is reduced
A(n) Blank______ investor would prefer to avoid gambles with zero expected return.
Multiple choice question.
risk-taker
risk-averse
risk-neutral
active
Chapter 7 Solutions
PFIN 7:STUDENT EDITION-MINDTAP (1 TERM)
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Similar questions
- Historical return data indicate that as the number of securities in a portfolio increases, the standard deviation of returns for the portfolio Blank______. Multiple choice question. fluctuates randomly decreases increases does not changearrow_forwardSystematic risk will Blank______. Multiple choice question. decrease when securities are added to a portfolio be eliminated when securities are added to a portfolio not change when securities are added to a portfolio increase when securities are added to a portfolioarrow_forwardWhat are the components of unexpected return (U) in the total return equation? More than one answer may be correct. Multiple select question. The expected return portion The unsystematic portion The expected risk portion The systematic portionarrow_forward
- Which of the following risks are reduced as more securities are added to the underlying portfolio? More than one answer may be correct. Multiple select question. Asset-specific risk Systematic risk Unique risk Market risk Unsystematic riskarrow_forwardWhat is a systematic risk? Multiple choice question. It is a risk that affects only one or a few assets. It is a risk that is caused by the failure of the internal control system of a corporation. It is a risk that pertains to a large number of assets, each to a greater or lesser extent. It is a risk that increases in a systematic, gradual fashion.arrow_forwardThe benefit in risk reduction from adding securities Blank______ as more and more securities are added to a portfolio. Multiple choice question. increases declines remains the samearrow_forward
- The standard deviation of a portfolio Blank______ as the number of securities in the portfolio Blank______. Multiple choice question. increases; increases decreases; decreases decreases; increases stays the same; increasesarrow_forwardThe total risk associated with an asset has two parts: Blank______ risk and Blank______ risk. Multiple choice question. fixed; flexible systematic; market unsystematic; unique systematic; unsystematicarrow_forwardWhat is the uncertain or risky return on a security? Multiple choice question. It is the portion of the return on a security that is unaffected by any present or future information. It is the return on a security that is classified as risky by bond rating agencies. It is the portion of the return on a security that depends on known information. It is the portion of the return on a security that depends on unknown information.arrow_forward
- Because systematic risks are market-wide effects, they are sometimes called Blank______. Multiple choice question. business-specific risks residual risks diversifiable risks market risksarrow_forwardNo risk-averse investor would hold any portfolio with expected return Blank______. Multiple choice question. below the minimum variance portfolio above the minimum variance portfolio above the bond market portfolio below the stock market portfolioarrow_forwardWhen we discount an announcement or a news item, we mean it has Blank______ impact on the market. Multiple choice question. more of an an unpredictable less of an a time valuearrow_forward
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