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Quiz Chapter 7 & 8 Group B Flashcards | StudBud
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Quiz Chapter 7 & 8 Group B
Quiz Chapter 7 & 8 Group B
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Answers
1
Calculate the beta for stock A.
0.61
1.64
0.5
1.00
2
Which portfolio had the highest standard deviation during the period between 1900 and 2014?
Common stocks
Corporate bonds
None of the answers is correct.
Treasury bills
3
It´s just a sample...
11.6%
14.3%
13.4%
14%
4
Expected return...
10%
8%
9%
11%
5
About the required rate of return...
5.6%
7.6%
11.7%
30.8%
6
Market risk is also called
undiversifiable risk.
systematic risk and undiversifiable risk.
unsystematic risk.
firm-specificrisk
7
The Sharpe ratio is defined as
(rP − rf)/βP
(rP − rf)/σP
(rP − rM)/σP
(rP − rM)/βP
8
Calculate the expected return on the resulting portfolio.
12%
28%
32%
20%
9
If a stock were overpriced, it would plot
onthe y-axis
onthe security market line.
belowthe security market line
abovethe security market line
10
Calculate the expected rate of return for Amazon.
35.2%
14.3%
23.1%
15.8%
11
Calculate the standard deviation of the returns on the resulting portfolio.
20%
10%
8%
9%
12
According to the SML...
cannotbe determined
correctlypriced
overpriced
underpriced
13
Calculate the expected return on the resulting portfolio
12%
10%
4%
9%
14
About correlation coefficient
-0.4
+0.6
+0.4
-0.6
15
About the beta...
1.00
0.00
2.00
1.25
16
calculate the correlation coefficient between the two securities.
+1
-0.5
0.0
+0.5
17
If the market risk premium is 8%, then according to the CAPM, the risk premium of a stock with beta value of 1.7 must be
greater than 12%
less than 12%
12%
Theanswer cannot be determined
18
If you invest 60 % of your funds in stock X and 40 % in stock Y, what is the standard deviation of your portfolio?
12.2%
10.3%
14.8%
21%
19
Calculate the covariance between the two securities.
250
-99
126
-250
20
The beta of the market portfolio is
-1.0
+1.0
+0.5
0.0
