CHAPTER8 RISKAND RATES OF b b b b b
RETURNQUESTIONSWITHCORRECT b b b
ANSWERS 2025
b b
The chance that some unfavorable event will occur. - correct answer-Risk
b b b b b b b b b b
What are 2 investor attitudes towards risk? - correct answer-1. riskKaversion
b b b b b b b b b b
2. Risk Premium
b b
assumes investor dislike risk and require higher rates of return to encourage them to hold riskier securiti es. -
b b b b b b b b b b b b b b b b b b
correct answer-Risk Aversion
b b b
the difference between the return on a risky asset and a risk-
b b b b b b b b b b b
less asset, which serves as compensation for investors to hold riskier securities. - correct answer- Risk
b b b b b b b b b b b b b b b
Premium
b
How do you calculate return? - correct answer-ending value-cost/cost
b b b b b b b b
The riskiness of an asset is based on what? - correct answer-The riskiness of the cash flows
b b b b b b b b b b b b b b b b
What are the 2 ways an assets risk can be analyzed? - correct answer-1. Stand Alone
b b b b b b b b b b b b b b b
2. AKPortfolio Context
b b
analyzing an asset's cash flows by themselves. - correct answer-Stand Alone
b b b b b b b b b b
combining the cash flows from differentKassets. - correct answer-Portfolio
b b b b b b b b
What are the ways you can quantify the stand alone risk? - correct answer- Standard
b b b b b b b b b b b b b b
deviation and coefficient of variation
b b b b b
RETURNQUESTIONSWITHCORRECT b b b
ANSWERS 2025
b b
The chance that some unfavorable event will occur. - correct answer-Risk
b b b b b b b b b b
What are 2 investor attitudes towards risk? - correct answer-1. riskKaversion
b b b b b b b b b b
2. Risk Premium
b b
assumes investor dislike risk and require higher rates of return to encourage them to hold riskier securiti es. -
b b b b b b b b b b b b b b b b b b
correct answer-Risk Aversion
b b b
the difference between the return on a risky asset and a risk-
b b b b b b b b b b b
less asset, which serves as compensation for investors to hold riskier securities. - correct answer- Risk
b b b b b b b b b b b b b b b
Premium
b
How do you calculate return? - correct answer-ending value-cost/cost
b b b b b b b b
The riskiness of an asset is based on what? - correct answer-The riskiness of the cash flows
b b b b b b b b b b b b b b b b
What are the 2 ways an assets risk can be analyzed? - correct answer-1. Stand Alone
b b b b b b b b b b b b b b b
2. AKPortfolio Context
b b
analyzing an asset's cash flows by themselves. - correct answer-Stand Alone
b b b b b b b b b b
combining the cash flows from differentKassets. - correct answer-Portfolio
b b b b b b b b
What are the ways you can quantify the stand alone risk? - correct answer- Standard
b b b b b b b b b b b b b b
deviation and coefficient of variation
b b b b b
