Podcast
Questions and Answers
Which one of the following is a measure of the uncertainty surrounding the return that an investment will earn?
Which one of the following is a measure of the uncertainty surrounding the return that an investment will earn?
- Range
- Expected value of return
- Total rate of return
- Risk (correct)
What is the formula for calculating the total rate of return?
What is the formula for calculating the total rate of return?
- Total gain or loss over time (correct)
- Variability of returns
- Expected value of return
- Risk of a single asset
What is portfolio scenario analysis?
What is portfolio scenario analysis?
- An approach for assessing risk using alternative outcomes (correct)
- The range of returns associated with an asset
- The average return of an investment
- A measure of an asset's risk
How is the expected value of return calculated when all outcomes have equal probabilities?
How is the expected value of return calculated when all outcomes have equal probabilities?
What is the range of an asset's risk calculated by?
What is the range of an asset's risk calculated by?
Which one of the following is a collection or group of assets?
Which one of the following is a collection or group of assets?
What is the formula for calculating the total rate of return?
What is the formula for calculating the total rate of return?
What is the range of an asset's risk calculated by?
What is the range of an asset's risk calculated by?
What is portfolio scenario analysis?
What is portfolio scenario analysis?
How is the expected value of return calculated when all outcomes have equal probabilities?
How is the expected value of return calculated when all outcomes have equal probabilities?
Flashcards
What is Risk?
What is Risk?
The uncertainty surrounding the return an investment will earn.
Total Rate of Return
Total Rate of Return
Total gain or loss from an investment over a period of time.
Portfolio Scenario Analysis
Portfolio Scenario Analysis
Assesses risk by considering various potential outcomes for a portfolio.
Expected Value of Return
Expected Value of Return
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Range of Asset's Risk
Range of Asset's Risk
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Portfolio
Portfolio
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Study Notes
Investment Analysis
- Standard deviation is a measure of the uncertainty surrounding the return that an investment will earn.
Calculating Total Rate of Return
- The formula for calculating the total rate of return is: Total Rate of Return = (Dividend Yield + Capital Gains Yield) / Initial Investment
Portfolio Analysis
- Portfolio scenario analysis is a tool used to analyze the performance of a portfolio under different scenarios or conditions.
Expected Value of Return
- When all outcomes have equal probabilities, the expected value of return is calculated by summing the products of each possible outcome and its probability.
Asset Risk
- The range of an asset's risk is calculated by the standard deviation of its returns.
Portfolio
- A portfolio is a collection or group of assets.
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