Chapter 8 HW Pre-Flight - A - CORRECT A portfolio could own...

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Sheet1 Page 1 A - CORRECT A portfolio could own a share of every asset traded in the world and still have what kind of risk? a. market b. diversifiable c. company-specific d. none, this portfolio would have no risk B - Incorrect What is reduced by adding more stocks to a portfolio? a. market risk b. beta c. systematic risk d. diversifiable risk D - Incorrect Which of the following is the definition of the market risk premium? a. the risk-free rate b. the market return c. the difference between the market return and the risk free rate d. beta times the difference between the market return and the risk free rate D - Incorrect What is the market return in the Intel CAPM Example? a. 1.6% b. 8.6% c. 10.2% d. 13.2% E - Correct Which of the following is expected for a stock whose expected return is less than its required return? a. The stock's price will go up. b. The stock's price will stay the same. c. The stock's price will go down.
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This note was uploaded on 05/05/2010 for the course ECONMOICS ECON 203 taught by Professor Josephpetry during the Spring '10 term at University of Illinois, Urbana Champaign.

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Chapter 8 HW Pre-Flight - A - CORRECT A portfolio could own...

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