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Chaminade MBA754 quiz 5

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Question;Question 1.1.Maximum international diversification can be achieved by investing solely in U.S. multinational corporations. (Points: 1) TrueFalseQuestion 2.2.Traditional portfolio management (Points: 1) 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.Question 3.3.Which one of the following conditions can be effectively eliminated through portfolio diversification? (Points: 1) a general price increase nationwidean interest rate reduction by the Federal Reserveincreased government regulation of auto emissionschange in the political party that controls CongressQuestion 4.4.Diversifiable risk is also called systematic risk. (Points: 1) TrueFalseQuestion 5.5.Currency exchange rate risk can be hedged using forwards, futures and options. (Points: 1) TrueFalseQuestion 6.6.Portfolio objectives should be established before beginning to invest. (Points: 1) TrueFalseQuestion 7.7.A stock with a beta of 1.3 is less risky than a stock with a beta of 0.42. (Points: 1) TrueFalseQuestion 8.8.A beta of 0.5 means that a stock is 5% more risky than the overall market. (Points: 1) TrueFalseQuestion 9.9.Perfectly negatively correlated assets have a correlation coefficient of plus one. (Points: 1) TrueFalseQuestion 10.10.A portfolio with a beta of.5 will be 50% more volatile than the market portfolio. (Points: 1) TrueFalseQuestion 11.11.The Dow Jones Industrial Average of thirty stocks is a suitable proxy for market returns in the CAPM. (Points: 1) TrueFalseQuestion 12.12.Standard deviation is a measure that indicates how the price of an individual security responds to market forces. (Points: 1) TrueFalseQuestion 13.13.Aggressive investors tend to prefer investing solely in negative beta stocks in a bull market. (Points: 1) TrueFalseQuestion 14.14.Both the efficient frontier and beta are important aspects of MPT. (Points: 1) TrueFalseQuestion 15.15.Correlation is a measure of the relationship between two series of numbers. (Points: 1) TrueFalseQuestion 16.16.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. (Points: 1) TrueFalseQuestion 17.17.Systematic risks (Points: 1) can be eliminated by investing in a variety of economic sectors.are forces that affect all investment categories.result from random firm-specific events.are unique to certain investment vehicles.Question 18.18.Historical betas are always reliable predictors of future return fluctuations. (Points: 1) TrueFalseQuestion 19.19.Beta measures diversifiable risk while standard deviation measures systematic risk. (Points: 1) TrueFalseQuestion 20.20.Betas must be positive numbers. (Points: 1) TrueFalseQuestion 21.21.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 (Points: 1) +1.5.+1.0.-1.0.-0.5.Question 22.22.Arbitrage pricing theory suggests that there are a number of factors that affect the risk premium of a security. (Points: 1) TrueFalse

 

Paper#53265 | Written in 18-Jul-2015

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