CRPC -Module 2 exam 2023/2024 with 100% correct answers

Fund JKL has a mean return of 8% and a standard deviation of 12, and its returns are evenly distributed. This would mean that 68% of the time its returns would fall between a. -4% and +20% b. +4% and +20% c. -8% and +8% d. -16% and +32% - correct answer a. -4% and +20% Assuming the market is currently returning 12% and the beta of your stock is .8. What percentage return can you expect on your stock? a. 2.4% b. 8.0% c. 9.6% d. 14.4% - correct answer c. 9.6% Jezebel owns four stocks in various industries. She has come to you to assess the risk she is taking. You inform her that her portfolio is subject to which one of the following types of risk, and why? a. purchasing power risk, because stocks fluctuate with inflation. b. systematic risk, because the stocks she owns are in various industries. c. political risk, since companies are subject to the laws of the countries in which they operate d. unsystematic risk, because she owns only four stocks. - correct answer d. unsystematic risk, because she owns only four stocks. Which one of the following statements is correct? a. Reinvestment, exchange rate, and liquidity risk are examples of systematic risk. b. Default, purchasing power, and political risk are examples of nondiversifiable risk. c. A company without debt will have no financial risk, but will have business risk, which is a type of unsystematic risk. d. Default, call, and liquidity risk are unique to bonds and not applicable to stocks. - correct answer c. A company without debt will have no financial risk, but will have business risk, which is a type of unsystematic risk. Beta is a measure of a stock's a. range of