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Question 1
1.
Which one of the following is least apt to reduce the unsystematic risk of a portfolio?
Answer
reducing the number of stocks held in the portfolio
adding bonds to a stock portfolio
adding international securities into a portfolio of U.S. stocks
adding U.S. Treasury bills to a risky portfolio
adding technology stocks to a portfolio of industrial stocks
0.1 points
Question 2
1.
Total risk is measured by _____ and systematic risk is measured by _____.
Answer
beta; alpha
beta; standard deviation
alpha; beta
standard deviation; beta
standard deviation; variance
0.1 points
Question 3
1.
The expected return on a stock given various states of the economy is equal to the:
Answer
highest expected return given any economic state.
arithmetic average of the returns for each economic state.
summation of the individual expected rates of return.
weighted average of the returns for each economic state.
return for the economic state with the highest probability of occurrence.
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 Summer '11
 RajneeshSharma
 Finance

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