DOWNLOAD THE Test Bank for Intermediate Financial Management 13th
b b b b b b b b
Edition Brigham b
Chapter 02: Risk and Return: Part I
b b b b b b
1. Thebtighterbthebprobabilitybdistributionbofbitsbexpectedbfuturebreturns,bthebgreaterbthebriskbofbabgivenbinvestmentbasb
measuredbbybitsbstandardbdeviation.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.02b-bLO:b2-2
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Standardbdeviation
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
2. Risk-
aversebinvestorsbrequirebhigherbratesbofbreturnbonbinvestmentsbwhosebreturnsbarebhighlybuncertain,bandbmostbinvestor
sbarebriskbaverse.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.06b-bLO:b2-6
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Riskbaversion
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
3. Whenbaddingbabrandomlybchosenbnewbstockbtobanbexistingbportfolio,bthebhigherb(orbmorebpositive)bthebdegreebofb
correlationbbetweenbthebnewbstockbandbstocksbalreadybinbthebportfolio,btheblessbthebadditionalbstockbwillbreducebtheb
portfolio'sbrisk.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty:bEasy
CopyrightbCengagebLearning.bPoweredbbybCognero. Pageb1
mynursytest.store
,DOWNLOAD THE Test Bank for Intermediate Financial Management 13th
b b b b b b b b
Edition Brigham b
Chapter 02: Risk and Return: Part I
b b b b b b
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.05b-bLO:b2-5
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Portfoliobrisk
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
4. Diversificationbwillbnormallybreducebthebriskinessbofbabportfoliobofbstocks.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.05b-bLO:b2-5
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Portfoliobrisk
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
5. Inbportfoliobanalysis,bweboftenbusebexbpostb(historical)breturnsbandbstandardbdeviations,bdespitebthebfactbthatbwebarebreallybi
nterestedbinbexbanteb(future)bdata.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.05b-bLO:b2-5
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Portfoliobrisk
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
CopyrightbCengagebLearning.bPoweredbbybCognero. Pageb2
mynursytest.store
,DOWNLOAD THE Test Bank for Intermediate Financial Management 13th
b b b b b b b b
Edition Brigham b
Chapter 02: Risk and Return: Part I
b b b b b b
DATEbMODIFIED: 1/6/2018b12:05bPM
6. Thebrealizedbreturnbonbabstockbportfoliobisbthebweightedbaveragebofbthebexpectedbreturnsbonbthebstocksbinbthebportfolio.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.05b-bLO:b2-5
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Portfoliobreturn
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
7. Marketbriskbrefersbtobthebtendencybofbabstockbtobmovebwithbthebgeneralbstockbmarket.bAbstockbwithbabove-
averagebmarketbriskbwillbtendbtobbebmorebvolatilebthanbanbaveragebstock,bandbitsbbetabwillbbebgreaterbthanb1.0.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.06b-bLO:b2-6
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Marketbrisk
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
8. Anbindividualbstock'sbdiversifiablebrisk,bwhichbisbmeasuredbbybitsbbeta,bcanbbebloweredbbybaddingbmorebstocksbtobtheb
portfoliobinbwhichbthebstockbisbheld.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty:bEasy
CopyrightbCengagebLearning.bPoweredbbybCognero. Pageb3
mynursytest.store
, DOWNLOAD THE Test Bank for Intermediate Financial Management 13th
b b b b b b b b
Edition Brigham b
Chapter 02: Risk and Return: Part I
b b b b b b
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.06b-bLO:b2-6
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Marketbrisk
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
9. Managersbshouldbunderbnobconditionsbtakebactionsbthatbincreasebtheirbfirm'sbriskbrelativebtobthebmarket,bregardlessbofbhowb
muchbthosebactionsbwouldbincreasebthebfirm'sbexpectedbratebofbreturn.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.07b-bLO:b2-7
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Riskbandbexpectedbreturns
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
10. OnebkeybconclusionbofbthebCapitalbAssetbPricingbModelbisbthatbthebvaluebofbanbassetbshouldbbebmeasuredbbybconsideringb
bothbthebriskbandbthebexpectedbreturnbofbthebasset,bassumingbthatbthebassetbisbheldbinbabwell-
diversifiedbportfolio.bThebriskbofbthebassetbheldbinbisolationbisbnotbrelevantbunderbthebCAPM.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.07b-bLO:b2-7
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: CAPMbandbrisk
CopyrightbCengagebLearning.bPoweredbbybCognero. Pageb4
mynursytest.store
b b b b b b b b
Edition Brigham b
Chapter 02: Risk and Return: Part I
b b b b b b
1. Thebtighterbthebprobabilitybdistributionbofbitsbexpectedbfuturebreturns,bthebgreaterbthebriskbofbabgivenbinvestmentbasb
measuredbbybitsbstandardbdeviation.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.02b-bLO:b2-2
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Standardbdeviation
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
2. Risk-
aversebinvestorsbrequirebhigherbratesbofbreturnbonbinvestmentsbwhosebreturnsbarebhighlybuncertain,bandbmostbinvestor
sbarebriskbaverse.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.06b-bLO:b2-6
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Riskbaversion
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
3. Whenbaddingbabrandomlybchosenbnewbstockbtobanbexistingbportfolio,bthebhigherb(orbmorebpositive)bthebdegreebofb
correlationbbetweenbthebnewbstockbandbstocksbalreadybinbthebportfolio,btheblessbthebadditionalbstockbwillbreducebtheb
portfolio'sbrisk.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty:bEasy
CopyrightbCengagebLearning.bPoweredbbybCognero. Pageb1
mynursytest.store
,DOWNLOAD THE Test Bank for Intermediate Financial Management 13th
b b b b b b b b
Edition Brigham b
Chapter 02: Risk and Return: Part I
b b b b b b
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.05b-bLO:b2-5
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Portfoliobrisk
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
4. Diversificationbwillbnormallybreducebthebriskinessbofbabportfoliobofbstocks.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.05b-bLO:b2-5
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Portfoliobrisk
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
5. Inbportfoliobanalysis,bweboftenbusebexbpostb(historical)breturnsbandbstandardbdeviations,bdespitebthebfactbthatbwebarebreallybi
nterestedbinbexbanteb(future)bdata.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.05b-bLO:b2-5
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Portfoliobrisk
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
CopyrightbCengagebLearning.bPoweredbbybCognero. Pageb2
mynursytest.store
,DOWNLOAD THE Test Bank for Intermediate Financial Management 13th
b b b b b b b b
Edition Brigham b
Chapter 02: Risk and Return: Part I
b b b b b b
DATEbMODIFIED: 1/6/2018b12:05bPM
6. Thebrealizedbreturnbonbabstockbportfoliobisbthebweightedbaveragebofbthebexpectedbreturnsbonbthebstocksbinbthebportfolio.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.05b-bLO:b2-5
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Portfoliobreturn
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
7. Marketbriskbrefersbtobthebtendencybofbabstockbtobmovebwithbthebgeneralbstockbmarket.bAbstockbwithbabove-
averagebmarketbriskbwillbtendbtobbebmorebvolatilebthanbanbaveragebstock,bandbitsbbetabwillbbebgreaterbthanb1.0.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.06b-bLO:b2-6
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Marketbrisk
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
8. Anbindividualbstock'sbdiversifiablebrisk,bwhichbisbmeasuredbbybitsbbeta,bcanbbebloweredbbybaddingbmorebstocksbtobtheb
portfoliobinbwhichbthebstockbisbheld.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty:bEasy
CopyrightbCengagebLearning.bPoweredbbybCognero. Pageb3
mynursytest.store
, DOWNLOAD THE Test Bank for Intermediate Financial Management 13th
b b b b b b b b
Edition Brigham b
Chapter 02: Risk and Return: Part I
b b b b b b
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.06b-bLO:b2-6
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Marketbrisk
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
9. Managersbshouldbunderbnobconditionsbtakebactionsbthatbincreasebtheirbfirm'sbriskbrelativebtobthebmarket,bregardlessbofbhowb
muchbthosebactionsbwouldbincreasebthebfirm'sbexpectedbratebofbreturn.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.07b-bLO:b2-7
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: Riskbandbexpectedbreturns
KEYWORDS: Bloom’s:bKnowledge
DATEbCREATED: 10/30/2017b8:02bPM
DATEbMODIFIED: 1/6/2018b12:05bPM
10. OnebkeybconclusionbofbthebCapitalbAssetbPricingbModelbisbthatbthebvaluebofbanbassetbshouldbbebmeasuredbbybconsideringb
bothbthebriskbandbthebexpectedbreturnbofbthebasset,bassumingbthatbthebassetbisbheldbinbabwell-
diversifiedbportfolio.bThebriskbofbthebassetbheldbinbisolationbisbnotbrelevantbunderbthebCAPM.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Difficulty:bEasy
QUESTIONbTYPE: Trueb/bFalse
HASbVARIABLES: False
LEARNINGbOBJECTIVES:b IFMG.DAVE.19.02.07b-bLO:b2-7
NATIONALbSTANDARDS:b UnitedbStatesb-
bBUSPROG:bReflectivebThinkingbSTATEbSTANDARDS: UnitedbStatesb-
bAKb-bDISC: bRiskbandbreturnbLOCALbSTANDARDS: UnitedbStatesb-bOHb-
bDefaultbCityb-bTBAbTOPICS: CAPMbandbrisk
CopyrightbCengagebLearning.bPoweredbbybCognero. Pageb4
mynursytest.store
