1. If a person's required return does not change when risk increases, that person is said to
be (a riskseeking b)
riskindifferent
c) risk averse d)risk aware.
2. If a person's required return decreases for an increase in risk, that person is said to be (a
riskseeking
b) riskindifferent c) risk averse d)risk aware.
3. _____is the chance of loss or the variability of returns associated with a given asset. a)
return b) value c)
risk
d) probability
4. The ____of an asset is the change in value plus any cash distributions expressed as a
percentage of the initial price or amount invested
a) return
b) value c) risk d) probability
5. If a person requires a greater return when risk increases that person is said to be (a risk
seeking b) riskindifferent c)
risk averse
d)risk aware.
6. Prime grade commercial paper will most likely have a higher annual return than a)
treasury bill b) a preferred stock c)
a common stock
d) an investment grade bond
7. A common approach of estimating the variability of returns involving forecasting the
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 Winter '11
 STEVEJOSEPH
 Standard Deviation, Treasury bill, Probability theory

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