Accounting Information Systems
11th Edition
ISBN: 9780357156032
Author: Ulric J. Gelinas; Richard B. Dull; Patrick Wheeler
Publisher: Cengage Limited
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Textbook Question
Chapter 7, Problem 4RQ
Describe and compare risks and opportunities.
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Which type of risk does not change when securities are added to a portfolio?
Multiple choice question.
Unique risk
Company-specific risk
Systematic risk
Unsystematic risk
What is the uncertain or risky return on a security?
Multiple choice question.
It is the portion of the return on a security that depends on unknown information.
It is the portion of the return on a security that is unaffected by any present or future information.
It is the portion of the return on a security that depends on known information.
It is the return on a security that is classified as risky by bond rating agencies.
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
Chapter 7 Solutions
Accounting Information Systems
Ch. 7 - Describe organizational governance.Ch. 7 - Prob. 2RQCh. 7 - Describe the eight elements of ERM.Ch. 7 - Describe and compare risks and opportunities.Ch. 7 - Prob. 5RQCh. 7 - Prob. 6RQCh. 7 - Prob. 7RQCh. 7 - What is COSO?Ch. 7 - Prob. 9RQCh. 7 - Prob. 10RQ
Ch. 7 - Prob. 11RQCh. 7 - Prob. 12RQCh. 7 - Prob. 13RQCh. 7 - Prob. 14RQCh. 7 - Prob. 15RQCh. 7 - Prob. 16RQCh. 7 - Prob. 17RQCh. 7 - Prob. 18RQCh. 7 - Prob. 19RQCh. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Provide five examples of potential conflict...Ch. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 1SPCh. 7 - Match the concept in List 1 with the definition or...Ch. 7 - Match the concept in List 1 with the definition or...Ch. 7 - Prob. 4SPCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Prob. 4PCh. 7 - Prob. 6P
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- 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 reducedarrow_forwardA(n) Blank______ investor would prefer to avoid gambles with zero expected return. Multiple choice question. risk-taker risk-averse risk-neutral activearrow_forwardHistorical 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_forward
- Systematic 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_forwardWhich 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_forward
- What 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_forwardThe 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_forward
- The 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_forwardBecause systematic risks are market-wide effects, they are sometimes called Blank______. Multiple choice question. business-specific risks residual risks diversifiable risks market risksarrow_forward
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Chapter 8 Risk and Return; Author: Michael Nugent;https://www.youtube.com/watch?v=7n0ciQ54VAI;License: Standard Youtube License