have a complett Choose the best answer for the question. Each question is worth
ID: 2619502 • Letter: H
Question
have a complett Choose the best answer for the question. Each question is worth 2 1. A portfolio is points. a) a group of assets, such as stocks and bonds, held as a collective unit b b) the expected return on a risky asset c) the expected return on a collection of risky assets d) the variance of returns for a risky asset 2. Risk that affects a large number of assets, each to a greater or lesser a) Idiosyncratic risk b) Diversifiable risk (or unsystematic risk or nonmarket risk) c) Systematic risk (or non-diversifiable risk or market risk) d) Asset-specific risk 3. Which of the following is TRUE concerning diversification? Assume being considered for selection into a portfolio are not perfectly positivel a) The risk of the portfolio is certain to be increased as securities are ac b) As more securities are added to the portfolio, the market risk of the c) If you hold more than 100 securities, then the portfolio is risk-free. d) As more and more securities are added to the portfolio, the level the level of systematic risk in the market. Which of the following is true regarding the beta coefficient in the Ca Model (CAPM)? a) It is a measure of unsystematic risk. b) A beta greater than one represents lower systematic risk than the ma c) Generally speaking, the higher the beta the higher the expected retu d) A beta of one indicates an asset is totally risk-free. 4. 5. The linear relation between an asset's expected return and its beta a) Reward to risk ratio b) Portfolio weight c) Portfolio risk d) Security market line (SML)Explanation / Answer
I have answered question 1,2,4 and 5 as questino 3 options are not completely visible. Hope this helps!
1) a) A group of assets such as stocks and bonds held as a collective unit
2) c) systematic risk(non-divesifiable or market risk)
4) c) Generally speaking, the higer the beta the higer the expected return
Higer beta represents that, the stock is more volatile and risky. Higher risk always comes with the higher expected returns
5) d) Security Market Line
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