FIN-350 JPC CH12

A benefit of diversification is the reduction of risk

The measure of an asset's systematic risk is known as _____.

Which form of market efficiency would have asset prices that reflect all past, public, and private information

(G2) The _______ is computed by summing the squared deviations and dividing by n - 1.

According to CAPM, diversification can get rid of unsystematic risk

If the variance for Stock A is greater than the variance for Stock B, then the standard deviation for Stock A is _____.

(G3) Changes in the quantity sold, price-cost margin, and amount of fixed costs are examples of _____.

(G5) Return distributions for common stock have a larger _____ than bond investments, indicating higher risk.

(G5) Place in order of expected returns and risk, from lowest to highest:

(G2) Three ways of measuring risk for an asset are to compute _____________.

(G1) Three ways to measure the return for an asset are: dollar return, percent return and __________.

The square root of the variance is called the

(G4) A popular way of forecasting future returns it to develop scenarios referred to as _______.

The risk caused by changes in inflation that affect revenues, expenses, and profitability is called:

(G3) Six types of risks associated with asset valuation are business risk, exchange rate risk, purchasing risk, _______.

(G4) Once the possible states of nature are projected, the analyst must assign a _______ or chance of occurrence.

(G3) Tax risk refers to variations in a firm's tax rate and tax-related charges over time due to _______.

Diversification cannot be achieved with two stocks that have a correlation of

In an efficient market, unexpected news will have no effect on stock prices

Another term for systematic risk is:

(G3) ______ is the effect on revenue and expenses due to variations in U.S. dollar compared to other currencies.