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CHAMINADE MBA754 WEEK 5 CH 5 HOMEWORK

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Question;The risk of a portfolio consisting of two uncorrelated;assets will be;equal to zero.;greater than the risk of the least risky asset;but less than the risk level of the more risky asset.;greater than zero but less than the risk of;the more risky asset.;equal to the average of the risk level of the;two assets.;Points Received: 0 of 1;Comments;Question 2. Question;The beta of the market is;-1.0.;0.0.;1.0.;undefined.;Points Received: 1 of 1;Comments;Question 3. Question;Portfolio objectives should be established independently of;tax considerations.;True False;Points Received: 0 of 1;Comments;Question 4. Question;A stock with a beta of 1.3 is less risky than a stock with a;beta of 0.42.;True False;Points Received: 0 of 1;Comments;Question 5. Question;Portfolios located on the efficient frontier are preferable;to all other portfolios in the feasible set.;True False;Points Received: 1 of 1;Comments;Question 6. Question;The Capital Asset Pricing Model (CAPM) includes which of the;following in its base assumptions?;I and III only;II and IV only;I, II and III only;I, III, and IV only;Points Received: 1 of 1;Comments;Question 7. Question;To obtain the maximum reduction in risk, an investor should;combine assets that;are negatively correlated.;are uncorrelated.;have a correlation coefficient of positive;one.;have a correlation coefficient of negative;one.;Points Received: 1 of 1;Comments;Question 8. Question;Standard deviation is a measure that indicates how the price;of an individual security responds to market forces.;True False;Points Received: 1 of 1;Comments;Question 9. Question;Traditional portfolio management;concentrates on only the most recent "hot" sectors of the market.;typically centers on interindustry;diversification.;includes only diversified bonds in a laddered;portfolio.;is based on statistical measures to develop;the portfolio plan.;Points Received: 0 of 1;Comments;Question 10. Question;Amanda has the following portfolio of assets.;What is the beta of Jonathan's portfolio?;1.06;1.10;1.13;3.02;Points Received: 1 of 1;Comments;Question 11. Question;A measure of systematic risk;standard deviation;historical average rate of return;beta;variance;Points Received: 1 of 1;Comments;Question 12. Question;Diversifiable risk is also called systematic risk.;True False;Points Received: 1 of 1;Comments;Question 13. Question;Studies have shown that investing in different industries as;well as different countries reduces portfolio risk.;True False;Points Received: 1 of 1;Comments;Question 14. Question;Which of the following factors comprise the CAPM?;I and III only;II and IV only;III and IV only;II, III and IV only;Points Received: 1 of 1;Comments;Question 15. Question;Security A has a beta of.99, security B has a beta of 1.2;and security C has a beta of -1.0. This information indicates that;security A has the highest degree of market risk.;security B has 20% more systematic risk than;the market.;security C has the highest degree of market;risk.;security C would be the best investment if a;strong bull market is expected.;Points Received: 1 of 1;Comments;Question 16. Question;The market rate of return increased by 8% while the rate of;return on XYZ stock increased by 4%. The beta of XYZ stock is;-2.0.;-0.40.;0.50.;2.0.;Points Received: 1 of 1;Comments;Question 17. Question;A coefficient of determination of 0.6 means that 40% of the;variation in a security's return is related to factors other than the;security's relationship to the market.;True False;Points Received: 1 of 1;Comments;Question 18. Question;A portfolio that offers the lowest risk for a given level of;return is known as an efficient portfolio.;True False;Points Received: 1 of 1;Comments;Question 19. Question;In designing a portfolio, the only relevant risk is;total risk.;unsystematic risk.;event risk.;nondiversifiable risk.;Points Received: 1 of 1;Comments;Question 20. Question;The basic theory linking risk and return is the Capital;Asset Pricing Model.;True False;Points Received: 1 of 1;Comments;Question 21. Question;A stock's beta value is a measure of;interest rate risk.;total risk.;systematic risk.;diversifiable risk.;Points Received: 1 of 1;Comments;Question 22. Question;The investment choice of an individual is affected by;II and III only;II, III and IV only;I, III and IV only;I, II, III and IV;Points Received: 0 of 1;Comments;Question 23. Question;The optimal portfolio for an individual investor is;represented by the point that lies on the;lowest possible utility curve;and connects to the efficient frontier.;utility curve which is just tangent to the;right side of the feasible set of risk-return options.;utility curve which is just tangent to the;efficient frontier.;utility curve which represents the highest;possible rate of return within the feasible set of risk-return options.;Points Received: 0 of 1;Comments;Question 24. Question;Portfolio objectives should be established before beginning;to invest.;True False;Points Received: 1 of 1;Comments;Question 25. Question;Market return is the average return on a large sample of;stocks such as those in the Standard & Poor's 500 Stock Composite Index.;True False;Points Received: 0 of 1;Comments;Question 26. Question;Risk can be totally eliminated by combining two assets that;are perfectly positively correlated.;True False;Points Received: 0 of 1;Comments;Question 27. Question;Historical betas are always reliable predictors of future;return fluctuations.;True False;Points Received: 1 of 1;Comments;Question 28. Question;When the Capital Asset Pricing Model is depicted;graphically, the result is the;standard deviation line.;coefficient of variation line.;security market line.;alpha-beta line.;Points Received: 1 of 1;Comments;Question 29. Question;The best stock to own when the stock market is at a peak and;is expected to decline in value is one with a beta of;+1.5.;+1.0.;-1.0.;-0.5.;Points Received: 1 of 1;Comments;Question 30. Question;Beta measures diversifiable risk while standard deviation;measures systematic risk.;True False;Points Received: 1 of 1;Comments;* Times are displayed;in (GMT-10:00) Hawaii

 

Paper#45863 | Written in 18-Jul-2015

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