Homework Answers
Option B, it can be eliminated through diversification.
Reason: Unsystematic risk is a firm specific risk and reduced to a large extent through diversification.
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Question 16 Unsystematic risk should not relevant when 25 pts it does not change o it...
od The capital asset pricing model (CAPM) explains how risk should be considered when stocks and...
od The capital asset pricing model (CAPM) explains how risk should be considered when stocks and other assets are held -Select- The CAPM states that any stock's required rate of return is -Select the risk-free rate of return plus a risk premium that reflects only the risk remaining -Select- diversification. Most individuals hold stocks in portfolios. The risk of a stock held in a portfolio is typically -Select the stock's risk when it is held alone. Therefore, the risk and...
D l Question 1 When calculating incremental cash flows, we should include O interest O financing...
D l Question 1 When calculating incremental cash flows, we should include O interest O financing expenses Q sunk costs opportunity costs | Question 2 2 pts The cash flows that occur just because of a new project are called O marginal cash flows o project cash flos e additional cash flows O incremental cash flows 2 pts D | Question 3 Sun Corp. uses a discount rate of 6% for below-average risk projects, 8% for average-risk projects, and 10%...
Question 4 1 pts Which of the following statement is correct about systematic risk and non-systematic...
Question 4 1 pts Which of the following statement is correct about systematic risk and non-systematic risk? Financial markets reward you for bearing systematic risk. A stock's systematic risk is measured by the standard deviation of its return. Systematic risk can be eliminated by proper diversification. Fluctuation in oil price is a non-systematic risk. Previous Next
Just need help with Question 16!! Question 15 1 pts Same facts as above: what is...
Just need help with Question 16!!
Question 15 1 pts Same facts as above: what is the standard deviation of Paulie's investment? 04.03% O 2.62% 2.68% O 0.07% D. Question 16 1 pts Which of the following is not true? O A stock's total return incorporates both expected return and unexpected return. O Unsystemic risks includes risks that are prevalent in all of the markets. O None of the above (all of the above are correct). The risks associated with...
12.5% O 15.8% 17.2% Question 4 The expected returns for Stocks A, B, C, D, and...
12.5% O 15.8% 17.2% Question 4 The expected returns for Stocks A, B, C, D, and E are 7 percent, 10 percent, 12 percent, 25 percent, and 18 percent, respectively. The corresponding standard deviations for these stocks are 12 percent, 18 percent, 15 percent, 23 percent, and 15 percent, respectively. Which one of the securities should a risk-averse investor purchase if the investment will be held in isolation (by itself? ОА Ов oc OD 5 pts Question 5 The market...
2. 3: Risk and Rates of Return: Risk in Portfolio Context Risk and Rates of Return:...
2. 3: Risk and Rates of Return: Risk in Portfolio Context Risk
and Rates of Return: Risk in Portfolio Context The capital asset
pricing model (CAPM) explains how risk should be considered when
stocks and other assets are held . The CAPM states that any stock's
required rate of return is the risk-free rate of return plus a risk
premium that reflects only the risk remaining diversification. Most
individuals hold stocks in portfolios. The risk of a stock held in...
Question 9 2 pts Which further step does Norman Bowie recommend when whistleblowing? The information revealed...
Question 9 2 pts Which further step does Norman Bowie recommend when whistleblowing? The information revealed must not be copyrighted or patented. There must be a morally appropriate motive for going public. O The public could not get the information in any other manner. The uncovered information should not violate confidentiality. Question 13 2 pts Which legal restriction protects a corporation in the use of its trade secrets? Attempts to "reverse engineer" a trade secret are regarded as illegal. The...
Question 27 1 pts When the profile of investments in a hedge fund differ from the...
Question 27 1 pts When the profile of investments in a hedge fund differ from the mandate, this can be the result of? Strategy/Style Drift Risk Management VaR Diversification Question 28 1 pts This hedge fund strategy involves long and short positions with the expectation of price convergence over time. Fixed Income Arbitrage Global Macro Dedicated Short Biased Long-Only Question 29 1 pts The following are benefits of investing in Fund of Funds, except? Ability to use leverage Access to...
Question 1 3 pts Winston Corporation is evaluating a new project that will require an increase...
Question 1 3 pts Winston Corporation is evaluating a new project that will require an increase in accounts receivable of $80,000, an increase in inventory of $250,000, and an increase in accounts payable of $160,000. The change in networking capital for this project will be: $330,000 $170,000 +$170,000 -$490,000 MACRS Depreciation Allowances Property Class Year 3-Year 5-Year 7-Year 33.33% 20.00% 14.29% 44.45 32.00 24.49 14.81 19.20 17.49 11.52 12.49 11.52 8.93 5.76 8.92 7.41 8.93 4.46 Question 2 3 pts...
16 and 17 Question 16 2 pts A public good: is characterized by non-rivalry and non-excludability...
16 and 17
Question 16 2 pts A public good: is characterized by non-rivalry and non-excludability is available to all and cannot be denied to anyone. can not be produced profitably by private firms. all of the above. Question 17 2 pts A credit default swap can best be described as: O a bond backed by the value of an underlying bundle of mortgages O a type of insurance contract against the default of bonds and mortgage backed securities. the...
od The capital asset pricing model (CAPM) explains how risk should be considered when stocks and other assets are held -Select- The CAPM states that any stock's required rate of return is -Select the risk-free rate of return plus a risk premium that reflects only the risk remaining -Select- diversification. Most individuals hold stocks in portfolios. The risk of a stock held in a portfolio is typically -Select the stock's risk when it is held alone. Therefore, the risk and...
D l Question 1 When calculating incremental cash flows, we should include O interest O financing expenses Q sunk costs opportunity costs | Question 2 2 pts The cash flows that occur just because of a new project are called O marginal cash flows o project cash flos e additional cash flows O incremental cash flows 2 pts D | Question 3 Sun Corp. uses a discount rate of 6% for below-average risk projects, 8% for average-risk projects, and 10%...
Question 4 1 pts Which of the following statement is correct about systematic risk and non-systematic risk? Financial markets reward you for bearing systematic risk. A stock's systematic risk is measured by the standard deviation of its return. Systematic risk can be eliminated by proper diversification. Fluctuation in oil price is a non-systematic risk. Previous Next
Just need help with Question 16!!
Question 15 1 pts Same facts as above: what is the standard deviation of Paulie's investment? 04.03% O 2.62% 2.68% O 0.07% D. Question 16 1 pts Which of the following is not true? O A stock's total return incorporates both expected return and unexpected return. O Unsystemic risks includes risks that are prevalent in all of the markets. O None of the above (all of the above are correct). The risks associated with...
12.5% O 15.8% 17.2% Question 4 The expected returns for Stocks A, B, C, D, and E are 7 percent, 10 percent, 12 percent, 25 percent, and 18 percent, respectively. The corresponding standard deviations for these stocks are 12 percent, 18 percent, 15 percent, 23 percent, and 15 percent, respectively. Which one of the securities should a risk-averse investor purchase if the investment will be held in isolation (by itself? ОА Ов oc OD 5 pts Question 5 The market...
2. 3: Risk and Rates of Return: Risk in Portfolio Context Risk
and Rates of Return: Risk in Portfolio Context The capital asset
pricing model (CAPM) explains how risk should be considered when
stocks and other assets are held . The CAPM states that any stock's
required rate of return is the risk-free rate of return plus a risk
premium that reflects only the risk remaining diversification. Most
individuals hold stocks in portfolios. The risk of a stock held in...
Question 9 2 pts Which further step does Norman Bowie recommend when whistleblowing? The information revealed must not be copyrighted or patented. There must be a morally appropriate motive for going public. O The public could not get the information in any other manner. The uncovered information should not violate confidentiality. Question 13 2 pts Which legal restriction protects a corporation in the use of its trade secrets? Attempts to "reverse engineer" a trade secret are regarded as illegal. The...
Question 27 1 pts When the profile of investments in a hedge fund differ from the mandate, this can be the result of? Strategy/Style Drift Risk Management VaR Diversification Question 28 1 pts This hedge fund strategy involves long and short positions with the expectation of price convergence over time. Fixed Income Arbitrage Global Macro Dedicated Short Biased Long-Only Question 29 1 pts The following are benefits of investing in Fund of Funds, except? Ability to use leverage Access to...
Question 1 3 pts Winston Corporation is evaluating a new project that will require an increase in accounts receivable of $80,000, an increase in inventory of $250,000, and an increase in accounts payable of $160,000. The change in networking capital for this project will be: $330,000 $170,000 +$170,000 -$490,000 MACRS Depreciation Allowances Property Class Year 3-Year 5-Year 7-Year 33.33% 20.00% 14.29% 44.45 32.00 24.49 14.81 19.20 17.49 11.52 12.49 11.52 8.93 5.76 8.92 7.41 8.93 4.46 Question 2 3 pts...
16 and 17
Question 16 2 pts A public good: is characterized by non-rivalry and non-excludability is available to all and cannot be denied to anyone. can not be produced profitably by private firms. all of the above. Question 17 2 pts A credit default swap can best be described as: O a bond backed by the value of an underlying bundle of mortgages O a type of insurance contract against the default of bonds and mortgage backed securities. the...
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