Investment Analysis Flashcard

Front

In the context of the efficient frontier, what is typically plotted on the x-axis?

Back

Risk (Standard Deviation)

Front

What does borrowing money to invest typically do to a portfolio?

Back

Increases its overall risk

Front

What does the term 'efficient frontier' refer to?

Back

A set of optimal portfolios offering the highest expected return for a defined level of risk

Front

What does the Capital Market Line help investors understand?

Back

The relationship between risk and return

Front

Which company has the highest beta value in the Dow Jones Industrial Average Stock Betas list?

Back

Boeing

Front

What is the beta value of Microsoft?

Back

0.83

Front

What is the beta value of Chevron?

Back

1.32

Front

In the SML, how is risk characterized?

Back

By beta

Front

In the Capital Market Line (CML), how is risk characterized?

Back

By standard deviation

Front

What does the SML relate to at any particular time?

Back

Required return and risk