Ch6,7,8ExamSpring07

Ch6,7,8ExamSpring07 - Exam questions from Spring 2007 over chapters 6 7 8 and 9 1 Market risk is also called and A systematic risk diversifiable

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1. 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 2. Rational risk-averse investors will always prefer portfolios ______________. A) located on the Markowitz efficient frontier to those located on the capital market line B) located on the capital market line to those located on the Markowitz efficient frontier C) at or near the minimum variance point on the Markowitz efficient frontier D) Rational risk-averse investors prefer the risk-free asset to all other asset choices. 3. The optimal risky portfolio can be identified by finding _____________. A) the minimum variance point on the efficient frontier B) the maximum return point on the efficient frontier C) the tangency point of the capital market line and the efficient frontier D) None of the above answers is correct 4. In the context of the capital asset pricing model, the systematic measure of risk is __________. A) unique risk B) beta C) standard deviation of returns D) variance of returns 5. Empirical results estimated from historical data indicate that betas __________. A) are always close to zero B) are constant over time C) of all securities are always greater than one D) seem to regress toward one over time 6. In a well diversified portfolio, __________ risk is negligible. A)
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This note was uploaded on 02/24/2010 for the course FINA 4310 taught by Professor Impson during the Spring '10 term at North Texas.

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Ch6,7,8ExamSpring07 - Exam questions from Spring 2007 over chapters 6 7 8 and 9 1 Market risk is also called and A systematic risk diversifiable

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