Financial Markets by Yale University (Week
1) Exam Questions And Answers latest
Update
A stress test: -
correct answer ✅- Tries to incorporate all potential economic and
financial crises, such as recessions, appreciation, and depreciation
of currency, liquidity crisis, etc.
- Does not look at historical returns, and looks at all the details of
the portfolios and their vulnerabilities during all sorts of potential
financial crises.
- Tries to incorporate all the interconnections between financial
institutions.
A 5% 3-month Value At Risk (VaR) of $1 million represents: -
correct answer ✅A 5% chance of the asset declining in value by $1
million during the 3-month time frame.
In the Capital Asset Pricing Model (CAPM), a measure of systematic
risk is captured by: -
correct answer ✅The Beta.
Market (or systematic) risk ___________ whereas idiosyncratic risk
, Financial Markets by Yale University (Week
1) Exam Questions And Answers latest
Update
__________. -
correct answer ✅Is the risk for an asset to experience losses due
to factors that affect the entire stock market
Is the risk which is endemic to a specific asset and therefore not the
market as a whole
Why might an investor not normally invest large sums of money
into Walmart or Apple stock? -
correct answer ✅Their stock prices are highly volatile, and thus
carry a lot of risk.
Why is the normal distribution not a good model of some financial
data? -
correct answer ✅It does not have many outliers.
What was the key concern that led to the regulation of health
insurance via the Health Maintenance Act of 1973? -
correct answer ✅Doctors received money when people were sick,
and thus they were not incentivized to cure people.
1) Exam Questions And Answers latest
Update
A stress test: -
correct answer ✅- Tries to incorporate all potential economic and
financial crises, such as recessions, appreciation, and depreciation
of currency, liquidity crisis, etc.
- Does not look at historical returns, and looks at all the details of
the portfolios and their vulnerabilities during all sorts of potential
financial crises.
- Tries to incorporate all the interconnections between financial
institutions.
A 5% 3-month Value At Risk (VaR) of $1 million represents: -
correct answer ✅A 5% chance of the asset declining in value by $1
million during the 3-month time frame.
In the Capital Asset Pricing Model (CAPM), a measure of systematic
risk is captured by: -
correct answer ✅The Beta.
Market (or systematic) risk ___________ whereas idiosyncratic risk
, Financial Markets by Yale University (Week
1) Exam Questions And Answers latest
Update
__________. -
correct answer ✅Is the risk for an asset to experience losses due
to factors that affect the entire stock market
Is the risk which is endemic to a specific asset and therefore not the
market as a whole
Why might an investor not normally invest large sums of money
into Walmart or Apple stock? -
correct answer ✅Their stock prices are highly volatile, and thus
carry a lot of risk.
Why is the normal distribution not a good model of some financial
data? -
correct answer ✅It does not have many outliers.
What was the key concern that led to the regulation of health
insurance via the Health Maintenance Act of 1973? -
correct answer ✅Doctors received money when people were sick,
and thus they were not incentivized to cure people.
