401e698e-8620-4c6d-8fa9-210ca374367f.jfif

# FINANCIAL MANAGEMENT: Finals (Long Quiz) ## MULTIPLE CHOICE. Read and understand the questions carefully. Write your answers in capital letters. (50 points) 1. The major benefit of diversification is to: - a. Increase the expected return - b. Remove negative risk assets from the portfolio...

# FINANCIAL MANAGEMENT: Finals (Long Quiz) ## MULTIPLE CHOICE. Read and understand the questions carefully. Write your answers in capital letters. (50 points) 1. The major benefit of diversification is to: - a. Increase the expected return - b. Remove negative risk assets from the portfolio - c. reduce the portfolio's systematic risk - d. reduce the expected risk 2. Stocks that have high financial rewards are generally accompanied by: - a. High dividend payments - b. Low dividend payments because of internally generated growth - c. High risk - d. All of the given choices 3. A measure that describes the risk of an investment project relative to other investments in general is the - a. Coefficient of variation - b. Standard deviation - c. Beta coefficient - d. Expected return 4. A firm with a higher degree of operating leverage when compared to the industry average implies that the: - a. Firm has higher variable costs - b. Firm's profits are more sensitive to changes in sales volume - c. Firm is more profitable - d. Firm is less risky