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Questions and Answers
The ___ is a statistical measure of the mean or average value of the possible outcomes.
The ___ is a statistical measure of the mean or average value of the possible outcomes.
expected value
The ___ the standard deviation, the ___ the investment.
The ___ the standard deviation, the ___ the investment.
The ___ is an absolute measure of risk, and the ___ is a relative measure of risk.
The ___ is an absolute measure of risk, and the ___ is a relative measure of risk.
standard deviation, coefficient of variation
When comparing two equal-sized investments, the ___ is an appropriate measure of total risk.
When comparing two equal-sized investments, the ___ is an appropriate measure of total risk.
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The slope of the characteristic line for a specific security is an estimate of ___ for that security.
The slope of the characteristic line for a specific security is an estimate of ___ for that security.
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The ___ is the ratio of ___ to the ___
The ___ is the ratio of ___ to the ___
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The coefficient of variation is a(n) ___ measure of risk.
The coefficient of variation is a(n) ___ measure of risk.
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Values of the ___ can range from +1.0 to -1.0.
Values of the ___ can range from +1.0 to -1.0.
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The ___ of a portfolio of two or more securities is equal to the weighted average of the ___ of each of the individual securities in the portfolio.
The ___ of a portfolio of two or more securities is equal to the weighted average of the ___ of each of the individual securities in the portfolio.
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The primary difference between the standard deviation and the coefficient of variation as measures of risk is:
The primary difference between the standard deviation and the coefficient of variation as measures of risk is:
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Security A's expected return is 10 percent while the expected return of B is 14 percent. The standard deviation of A's returns is 5 percent, and it is 9 percent for B. An investor plans to invest equal amounts in A and B. Which of the following statements is true about this portfolio consisting of stock A and stock B.
Security A's expected return is 10 percent while the expected return of B is 14 percent. The standard deviation of A's returns is 5 percent, and it is 9 percent for B. An investor plans to invest equal amounts in A and B. Which of the following statements is true about this portfolio consisting of stock A and stock B.
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Which of the following is not an example of a source of systematic risk?
Which of the following is not an example of a source of systematic risk?
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The ___ is defined as the slope of a line relating an individual security's return to the returns of other securities in that firm's primary industry.
The ___ is defined as the slope of a line relating an individual security's return to the returns of other securities in that firm's primary industry.
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All other things being equal, what is the major impact that an increase in the expected inflation rate would be expected to have on the security market line?
All other things being equal, what is the major impact that an increase in the expected inflation rate would be expected to have on the security market line?
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Beta is defined as:
Beta is defined as:
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