
Test for Chapter 11
Quiz
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Other
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University
•
Hard
Doanh Tran
Used 8+ times
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51 questions
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1.
MULTIPLE CHOICE QUESTION
15 mins • 1 pt
The measure of beta associates most closely with
the risk-free return
systematic risk
unexpected risk
unsystematic risk
idiosyncratic risk
2.
MULTIPLE CHOICE QUESTION
15 mins • 1 pt
The separation principle states that an investor will
combine a riskless asset with the tangency portfolio based on their risk tolerance level
combine a riskless asset with the minimum variance portfolio based on their risk tolerance level
choose a portfolio from the efficient set based on individual risk tolerance
choose between any efficient portfolio and a riskless asset to generate the desired expected return
never choose to invest in a riskless asset due to the low expected rate of return
3.
MULTIPLE CHOICE QUESTION
15 mins • 1 pt
The capital market line
has a horizontal intercept at the market beta
intersects the feasible set at its midpoint
lies tangent to the opportunity set at its minimum point
has a vertical intercept at the risk-free rate of return
and the characteristic line are two terms describing the same function
4.
MULTIPLE CHOICE QUESTION
15 mins • 1 pt
The variance of a portfolio comprised of many securities is primarily dependent upon the
beta of the portfolio
variances of the securities held within the portfolio
covariance between the overall portfolio and the market
portfolio's correlation with the market
covariances between the individual securities
5.
MULTIPLE CHOICE QUESTION
15 mins • 1 pt
You have plotted the monthly returns for two securities for the past ve years on the same graph. The pattern of the movements of each of the two securities generally rose and fell to the same degree in step with each other. This indicates the securities have
a weak positive correlation
a strong negative correlation
a strong positive correlation
a weak negative correlation
no correlation with each other
6.
MULTIPLE CHOICE QUESTION
15 mins • 1 pt
Risk that affects a large number of assets, each to a greater or lesser degree, is called _____ risk
asset-specific
total
idiosyncratic
diversifiable
systematic
7.
MULTIPLE CHOICE QUESTION
15 mins • 1 pt
As we add more diverse securities to a portfolio, the ____ risks of the portfolio will decrease
total and unsystematic
total and systematic
unsystematic
systematic and unsystematic
systematic
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