Chp 13 Finance Quiz 3

Chp 13 Finance Quiz 3 - Question 1 1. Which one of the...

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Question 1 1. Which one of the following is a positively sloped linear function that is created when expected returns are graphed against security betas? Answer reward-to-risk matrix portfolio weight graph normal distribution security market line market real returns 0.1 points Question 2 1. A stock with an actual return that lies above the security market line has: Answer more systematic risk than the overall market. more risk than that warranted by CAPM. a higher return than expected for the level of risk assumed. less systematic risk than the overall market. a return equivalent to the level of risk assumed. 0.1 points Question 3 1. The standard deviation of a portfolio: Answer is a weighted average of the standard deviations of the individual securities held in the portfolio. can never be less than the standard deviation of the most risky security in the portfolio. must be equal to or greater than the lowest standard deviation of any single security held in the portfolio. is an arithmetic average of the standard deviations of the individual securities which
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This note was uploaded on 07/31/2011 for the course FIN 550 taught by Professor Rajneeshsharma during the Summer '11 term at Saint Joseph's University.

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Chp 13 Finance Quiz 3 - Question 1 1. Which one of the...

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