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The expected return on an investment is:
-equal to the required return
- less than the required return
- equivalent to the actual return
- the mean of the distribution of possible returns - 🧠 ANSWER ✔✔the
mean of the distribution of possible returns
A good measure of an investor's risk exposure if she/he only holds a single
asset in her portfolio is:
- the standard deviation of possible returns on the asset
-the expected value of the asset's returns
, - the correlation coefficient with the market portfolio
-the normal probability distribution function - 🧠 ANSWER ✔✔the standard
deviation of possible returns on the asset
Standard deviation is a:
-numerical indicator of how widely dispersed possible values are distributed
around the mean
-numerical indicator of how widely dispersed possible values are
distributed around the coefficient of variation
-numerical indicator of how widely dispersed possible values are
distributed around the correlation coefficient
- measure of the relative risk of one asset compared with another - 🧠
ANSWER ✔✔numerical indicator of how widely dispersed possible values
are distributed around the mean
In terms of risk, labor union disputes, entry of a new competitor, and
embezzlement by management are all examples of factors affecting:
-diversifiable risk