4200146
Pregunta 1
Pregunta
Stand-alone = Portfolio + Diversifiable
risk risk r isk
Respuesta
-
Stand-alone = Greek Yogurt + Diversifiable
-
Stand-alone = Portfolio + Diversifiable
-
Stand-alone = Paper + Diversifiable
Pregunta 2
Pregunta
Two of the most important financial analysis concepts are risk and return.
Respuesta
-
rate and return
-
risk and return
Pregunta 3
Pregunta
What is financial risk, how is it measured, and why is it so important to financial decision making?
Respuesta
-
important to financial decision making?
-
important to no financial decision making?
Pregunta 4
Pregunta
The risk of a portfolio (sp) decreases as more and more investments are randomly added.
Respuesta
- True
- False
Pregunta 5
Pregunta
The risk of a portfolio (sp) -------- as more and more investments are randomly added.
Respuesta
-
decreases
-
increases
Pregunta 6
Pregunta
The risk of a portfolio (sp) decreases as more and more investments are randomly added.
However, the incremental risk reduction from each new investment decreases as more assets are added.
Considerable risk remains regardless of the number of assets added.
However, the incremental risk reduction from each new investment --- as more assets are added.
Respuesta
-
increase
-
decrease
Pregunta 7
Pregunta
Considerable risk remains regardless of the number of assets added.
Respuesta
-
remain
-
doesnt remain
Pregunta 8
Pregunta
Stand-alone risk is the risk of an individual investment when it is held in ------.
Diversifiable risk is that part of the stand-alone risk that can be eliminated by diversification.
Respuesta
-
isolation
-
together
Pregunta 9
Pregunta
Stand-alone risk is the risk of an individual investment when it is held in isolation.
Diversifiable risk is that part of the stand-alone risk that can be eliminated by -------
Respuesta
-
diversifcation
-
quantitative data
Pregunta 10
Pregunta
Diversifiable risk is that part of the stand-alone risk that can be eliminated by diversification.
Portfolio risk is that part of the stand-alone risk that cannot be eliminated by diversification
Respuesta
- True
- False
Pregunta 11
Pregunta
what cannot be eliminated by diversification?
Respuesta
-
deliverable risk
-
portfolio risk
Pregunta 12
Pregunta
It is --- rationale for an investor, whether an individual or business, to hold a single investment.
Respuesta
-
not
-
super
Pregunta 13
Pregunta
It is not rationale for an investor, whether an individual or business, to hold ---------
Respuesta
-
single investment
-
multiple investment
Pregunta 14
Pregunta
It is not rationale for an investor, whether an individual or business, to hold a single investment.
Because an investment held in a portfolio is less risky than when held in isolation,
stand-alone risk measures (i.e., s) are not relevant for investments held in portfolios.
Because an investment held in a -------- is less risky than when held in isolation,
Respuesta
-
portfolio
-
ageneda
Pregunta 15
Pregunta
The most widely used measure of risk for investments held in portfolios is the beta coefficient, or just beta.
Respuesta
- True
- False
Pregunta 16
Pregunta
The most widely used measure of risk
Respuesta
-
beta
-
one
Pregunta 17
Pregunta
The most widely used measure of risk for investments held in portfolios is the beta coefficient, or just beta.
Beta measures the volatility of the investment’s returns relative to the returns on the portfolio.
Because beta is a relative measure of risk, it depends on both the investment and the portfolio.
Respuesta
-
it depends on both the investment and the portfolio.
-
it depends on both the investment and the agenda
Pregunta 18
Pregunta
If beta = 1.0, investment has average risk, where average is defined as the riskiness of the portfolio.
If beta > 1.0, investment has above-average risk.
If beta < 1.0, investment has below-average risk.
Most investments have betas in the range of 0.5 to 1.5.
=========
If beta < 1.0.........
Respuesta
-
investment has average risk
-
investment has above-average risk
-
investment has below-average risk
Pregunta 19
Pregunta
Most investments have betas in the range of 0.5 to 1.5.
Respuesta
- True
- False
Pregunta 20
Pregunta
Most investments have betas in the range of ---- to 1.5.
Respuesta
-
0.1
-
0.0
-
0.5
Pregunta 21
Pregunta
The CAPM is based on a very restrictive set of assumptions.
It has not been empirically verified.
It is based on investor expectations, but the inputs used in the model typically are based on historical data.
Respuesta
- True
- False
Pregunta 22
Pregunta
The CAPM is based on a very ________ set of assumptions.
It has not been empirically verified.
It is based on investor expectations, but the inputs used in the model typically are based on historical data.
Respuesta
-
unrestrictive
-
restrictive
Pregunta 23
Pregunta
CAPM It is based on investor expectations, but the inputs used in the model typically are based on ---- data.
Respuesta
-
bar
-
historical
Pregunta 24
Pregunta
Some Good News About the CAPM
The CAPM provides investors with a very rational way of thinking about required rates of return..
R(Re) is composed of:
The risk-free rate, which compensates investors for the time value of money.
A risk premium, which compensates investors for the amount of portfolio risk assumed.
Respuesta
- True
- False
Pregunta 25
Pregunta
Some Good News About the CAPM
The CAPM provides investors with a very ------ way of thinking about required rates of return..
R(Re) is composed of:
The risk-free rate, which compensates investors for the time value of money.
A risk premium, which compensates investors for the amount of portfolio risk assumed.
Respuesta
-
unrational
-
rational
Pregunta 26
Pregunta
The ---------- which compensates investors for the time value of money.
A risk premium, which compensates investors for the amount of portfolio risk assumed.
Respuesta
-
not risk free rate
-
risk free rate
Pregunta 27
Pregunta
Portfolio Risk
If the investor is an individual, the investments are individual securities (stocks), the portfolio is the market portfolio, and the relevant risk of each asset is called market risk.
If the investor is a business, the investments are real assets (projects), the portfolio is the entire business, and the relevant risk of each asset is called corporate risk .
Respuesta
- True
- False
Pregunta 28
Pregunta
Portfolio Risk
If the investor is an individual, the investments are individual --------- (stocks), the portfolio is the market portfolio, and the relevant risk of each asset is called market risk.
If the investor is a business, the investments are real assets (projects), the portfolio is the entire business, and the relevant risk of each asset is called corporate risk .
Respuesta
-
not securities
-
securities
Pregunta 29
Pregunta
If the investor is a business, the investments are ------- assests which are known as -------
Respuesta
-
assests, project
-
not assets, not business
Pregunta 30
Pregunta
In for-profit businesses, projects have both corporate risk and market risk.
The risk of the project as seen by the business’s managers is corporate risk, which is measured by its corporate beta.
The risk of the project as seen by the business’s shareholders is market risk, which is measured by market beta.
Respuesta
-
In for-profit businesses, projects have both corporate risk and market risk.
-
In for-profit businesses, projects does have both corporate risk and market risk.
Pregunta 31
Pregunta
The risk of the project as seen by the business’s managers is corporate risk, which is measured by its corporate beta.
Respuesta
-
corporate
-
incorporate
Pregunta 32
Pregunta
what is measured by market beta
Respuesta
-
business shareholders
-
business managers
Pregunta 33
Pregunta
The beta of portfolio is simply the weighted average of the betas of the component investments.
Respuesta
-
beta of portfolio is simply the weighted average
-
beta of portfolio is not simply the weighted average
Pregunta 34
Pregunta
Risk and Required Return
Defining and measuring risk is of no value if we cannot relate risk to required rate of return.
Respuesta
- True
- False
Pregunta 35
Pregunta
Risk and Required Return
Defining and measuring risk is of ------ value if we cannot relate risk to required rate of return.
Respuesta
-
a
-
no
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