Chapter6 HW - Chapter 6 1. Risk that can be eliminated...

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Chapter 6 1. Risk that can be eliminated through diversification is called ______ risk. A) unique B) firm-specific C) diversifiable D) all of the above 2. The _________ could be used in an index model to represent common or systematic risk factors. A) firm size B) industry C) S&P500 index D) capital allocation line 3. Diversification is most effective when security returns are __________. A) high B) negatively correlated C) positively correlated D) uncorrelated 4. Beta is a measure of __________. A) firm specific risk B) diversifiable risk C) market risk D) unique risk 5. The risk that can be diversified away is ___________. A) beta B) firm specific risk C) market risk D) systematic risk 6. Market risk is also called __________ and __________. A) systematic risk, diversifiable risk B) systematic risk, nondiversifiable risk C) unique risk, nondiversifiable risk D) unique risk, diversifiable risk 1
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7. Firm specific risk is also called __________ and ___________. A) systematic risk, diversifiable risk B) systematic risk, non-diversifiable risk C) unique risk, non-diversifiable risk D) unique risk, diversifiable risk 8. The term efficient frontier refers to the set of portfolios that _________________. A) yield the greatest return for a given level of risk
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This note was uploaded on 02/09/2009 for the course FI 312 taught by Professor Seo during the Spring '09 term at Michigan State University.

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Chapter6 HW - Chapter 6 1. Risk that can be eliminated...

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