Market beta is a measurement of systematic risk and will affect the expected risk.
Group of answer choices:
A)True
B)False
Ans TRUE
Market beta is a measurement of systematic risk and will affect the expected risk. This risk is non diversifiable. This is also known as market risk, undiversifiable risk.
Market beta is a measurement of systematic risk and will affect the expected risk. Group of...
PT 1: ABC, Inc., has a beta of 2.03. The risk-free rate is 2.3% and the market risk premium is 6%. What is the required rate of return on ABC's stock? Note: Convert your answer to percentage and round off to two decimal points. MIGHT BE EASIER TO USE GOAL SEEK? PT 2: Market beta is a measurement of systematic risk and will affect the expected risk. T OR F
13. Beta is a measure of a stock's: Systematic Risk Risk relative to the market Both A and B None of the above The most volatile stock would have Beta. Higher than 1.0. Lower than 1.0. Very close to 0.0. Beta is not related to volatility. Discounted cash flow techniques used in valuing common stock are based on: future value analysis. present value analysis. The CAPM. the APT. c.
QUESTION 24 Exposure to non-systematic risk is rewarded with higher expected return. Conversely, exposure to systematic risk is not rewarded with higher expected returns. True False
Consider the following information: Beta Portfolio Risk- free Market Expected Return 6 % 11.4 9.4 20 a. Calculate the expected return of portfolio A with a beta of 20. (Round your answer to 2 decimal places.) Expected return b. What is the alpha of portfolio A (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Alpha c. If the simple CAPM is valid state whether the above situation is possible? Yes No 5....
Chapter 9 1. The reward-to-systematic risk (beta) ratio is 7.7% and the risk-free rate is 4.2%. What is the expected return on a risky asset if the beta of that asset is .89? the security market line. 2. If a stock is overvalued, it will plot A. above B. on or above C. on D. on or below E. below 3. The stock of Healthy Eating, Inc., has a beta of.88. The risk-free rate is 3.8 percent and the market...
Risk factors that are expected to affect only a specific firm are referred to as: risk premiums. diversifiable risk. systematic risk. market risk.
Standard deviation measures _____ risk while beta measures _____ risk. systematic; unsystematic unsystematic; systematic total; unsystematic total; systematic asset-specific; market
1. If a stock has a market beta less than 1, the expected return will be less than expected return of market portfolio. True or False? 2. ABC, Inc., has a beta of 1.99. The risk-free rate is 3.45% and the market risk premium is 5.74%. What is the required rate of return on ABC's stock? Note: Convert your answer to percentage and round off to two decimal points. 3. Semi-strong-form efficient markets are not weak-form efficient. True or False?
The beta for Cowboy Industries, Inc. is 1.2. The expected return on the market portfolio is 14.0% and the risk-free rate is 3.0%. If the CAPM/SML is correct, what is Cowboy Manufacturing’s required (expected) return? Group of answer choices 16.2% 13.8% None of these are correct. 12.9% 11.1%
PLEASE EXPLAIN WHY ANSWER IS TRUE OR FALSE: "Risk aversion" implies that investors require higher expected returns on riskier than on less risky securities. a. True b. False When adding a randomly chosen new stock to an existing portfolio, the higher (or more positive) the degree of correlation between the new stock and stocks already in the portfolio, the less the additional stock will reduce the portfolio's risk. a. True b. False An individual stock's diversifiable risk, which is measured...