Market risk is also called i systematic risk ii

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Unformatted text preview: return: A. 5.6% B. 7.6% C. 11.7% D. None of the given answers ANS: C In Slides 40 and 45, we have stated the formula: Required Rate of Return = Risk ­free Rate + Risk Premium. Using the information from the problem, we thus have: Required rate of return = 4 + 7.7 = 11.7 % D ­1: Systematic Risk and Unsystematic Risk (Slide 43) 13. The type of the risk that can be eliminated by diversification is called: a. Market risk b. Unsystematic risk c. Interest rate risk d. Default risk ANS: B 14. The unsystematic risk is also called the: a. Idiosyncratic risk b. Diversifiabl...
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This note was uploaded on 07/31/2013 for the course FIN 504 taught by Professor Harper,j during the Summer '08 term at Texas A&M University–Commerce.

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