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I am working on compiling all the answers to over 1000 of these questions in order to create a study guide. Any help would be appreciated: I will break them into a few parts.
1. Which of the following portfolios have the least risk?
A portfolio of treasury bills
A portfolio of long-term United States Government bonds
Standard and Poor's composite index
Portfolio of common stocks of small firms
2. The risk that cannot be eliminated by diversification is called market risk. - true or false?
3. Safro Corporation has had returns of -5%, 15% and 20% for the past three years. Calculate the standard deviation of the returns. (hint: assume this is a sample of the population).
4. Risk premium is the difference between the security return and the treasury bill return. - true or false?
5. If the price of two stocks move together what would be positve / negative?
6. The market risk premium is:
7. The variance or standard deviation is a measure of:
8. As the number of stocks in a portfolio is increase, what happens?
Choose one
Unique risk decreases and approaches to zero
Market risk decrease
Unique risk decreases and becomes equal to market risk
Total risk approaches to zero
9. The risk premium for Treasury bills is always equal to:
10. For a two-stock portfolio, the maximum reduction in risk occurs when the correlation coefficient between the two stocks is:
11. If two investments offer the same expected return, most investors would prefer the one with higher variance. - true or false?
12. What is the arithmetic average return of bonds earning 5%, stocks earning 11% and treasuries earning 2%?
1. Which of the following portfolios have the least risk?
A portfolio of treasury bills
A portfolio of long-term United States Government bonds
Standard and Poor's composite index
Portfolio of common stocks of small firms
2. The risk that cannot be eliminated by diversification is called market risk. - true or false?
3. Safro Corporation has had returns of -5%, 15% and 20% for the past three years. Calculate the standard deviation of the returns. (hint: assume this is a sample of the population).
4. Risk premium is the difference between the security return and the treasury bill return. - true or false?
5. If the price of two stocks move together what would be positve / negative?
6. The market risk premium is:
7. The variance or standard deviation is a measure of:
8. As the number of stocks in a portfolio is increase, what happens?
Choose one
Unique risk decreases and approaches to zero
Market risk decrease
Unique risk decreases and becomes equal to market risk
Total risk approaches to zero
9. The risk premium for Treasury bills is always equal to:
10. For a two-stock portfolio, the maximum reduction in risk occurs when the correlation coefficient between the two stocks is:
11. If two investments offer the same expected return, most investors would prefer the one with higher variance. - true or false?
12. What is the arithmetic average return of bonds earning 5%, stocks earning 11% and treasuries earning 2%?
PearlieQ!
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