FINC 5310 Final

FINC 5310 Final risk averse - Correct Answer-dont like risk; must get reward to accept risk; most peoples attitude risk seeker - Correct Answer-look for opportunities to take the risk; small percentage of people risk neutral - Correct Answer-focused only on reward; small percentage of people risk - Correct Answer-possibility that actual out comes will be less than expected Does a higher variance result in less or greater risk? - Correct Answer-greater risk For risk comparison what are the steps - Correct Answer-calculate expected return, variance using exp return, std deviation of variance and then coefficient of variation using std dev and exp return does total risk reduce or increase as we include more stocks in a portfolio - Correct Answer-reduces Is market risk constant or variable - Correct Answer-constant who created the capital asset pricing model - Correct Answer-william sharp security market line - Correct Answer-linear relationship of risk and return Required rate of return - Correct Answer-return needed by investor to accept risk Beta above market beta - Correct Answer-aggressive Beta below market beta - Correct Answer-defensive Beta portfolio - Correct Answer-weighted average of stock in a portfolio