What holds true in the concept of: "limits to diversification"?

It is difficult to find new assets with negative correlation

Which of the following statements about Tesla is false?

Tesla’s stock has declined every week for twenty seven straight weeks

Which of the following could be a reason for increases in bond yields?

Decrease in a bond's purchase price

Which of the following is not a cause of the recent fall in the US stock markets?

The market believes Trump is bluffing with his tariff threats

What is the difference between the CAL and the CML?

The CML includes all financial assets in the market; the CAL only a subset

studbud

Quiz, March 12, 2025

8 termsStudBud Administration9 plays

Test your knowledge on the recent fall in the US stock markets, bond yields, artificial intelligence, diversification, Tesla, and market sentiment.

Flashcards8 cardsFPractice quizPHost liveL

Questions 8

Answers

1
What holds true in the concept of: "limits to diversification"?
No individual investor can beat the market
The variance of a portfolio is the weighted sum of the individual variances
It is difficult to find new assets with negative correlation
The variance terms dominate in the variance of a portfolio
2
Which of the following statements about Tesla is false?
Its stock logged its worst trading session in nearly five years on Monday
None of the answers, they're all true
Tesla’s stock has declined every week for twenty seven straight weeks
The company is the worst performer on the S&P 500 so far this year
3
Which of the following could be a reason for increases in bond yields?
Decreases in coupon rates
All of the above
Increase in the general level of interest rates
Decrease in a bond's purchase price
4
If the correlation coefficient between two assets is -1, can you combine them to form a portfolio with zero S.D.
True
False
5
Which of the following is not a cause of the recent fall in the US stock markets?
Trump's statement that he isn't watching the markets
Fears of a recession
The market believes Trump is bluffing with his tariff threats
Money has started to move to Europe.
The Fed's decision to stop lowering interest rates
Trump's seemingly indecisive tariff stance
6
According to Luis Gonzalí what is the real thermometer to measure when the market is not happy with what's going on?
Inflation
The price of gold
The exchange rate
The equities markets
The bond market
Job creation
7
As per The Economist, Chinese shares’ present boom owes much to euphoria over artificial intelligence.
True
False
8
What is the difference between the CAL and the CML?
The CAL measures utility and wealth; the CML return and risk
The CAL measures investor utility; the CML measures only expected return
The CML includes all financial assets in the market; the CAL only a subset
The CAL is tangent to the efficient frontier and the CML is not.
In the CML the measure of risk is the variance and in the CAL it's the SD

Quiz, March 12, 2025 Flashcards | StudBud