Homework Answers
Option d is the correct option.
Derivatives are able to provide high returns in the scenario where the risk is high. They magnify the risk and return of the investors to a large extent.
Derivatives have no value of their own and they have no certainty of high real value. Derivatives are more liquid than the assets on which they are based. They yield higher returns in an inefficient market and so option a is incorrect.
Add Answer to:
/Which of the following statements about derivatives is correct? a) In an efficient market, derivatives can...
hello! can I have help with th3se MCQ? I know it may seem a lot of...
hello! can I have help with th3se MCQ? I know it may
seem a lot of buy they are easy to answer and take very little. I
am just sure of the answers. thanks
2. Which of the following is true about "double coincidence of wants"? a) It relates to monetary economy b) It does not happen in an economy with financial system. c) It is a necessary condition for barter economy d) It allows production and consumption to be...
Which one of the following statements is correct concerning market efficiency? Group of answer choices If...
Which one of the following statements is correct concerning market efficiency? Group of answer choices If the market is efficient the price instantaneously adjusts to new information In an efficient market, some market participants will have an advantage over others Real asset markets are more efficient than financial markets. If a market is efficient, arbitrage opportunities should be common.
SELECT ALL THAT APPLY PLEASE Which of the following statements about the relationship between investment risk...
SELECT ALL THAT APPLY PLEASE
Which of the following statements about the relationship between investment risk and return are true? A. High risk leads to high reward. OB. Derivatives offer virtual certainty of high returns. oc. Individuals who invest in stocks expect to earn a risk premium in return for the chance they they might lose their investment. OD. Investment in TIPS provides protection against inflation and stock market risk. O E. High risk can lead to high reward. OF....
help with these following mcqs 14 which of the following statements about the London Stock Exchange...
help with these following mcqs
14 which of the following statements about the London Stock Exchange is INCORRECT? a) It used to be membership based but now is publicly owned b) Its main market is for established companies Most trading occurs on the floor-based system d) The commission rate was very high before the Big Bang in 1986 (2 Marks) 15 Which of the following with regard to activities on financial markets is incorrect? a) A speculation strategy can be...
Which of the following outcome(s) are most likely to be inconsistent with the efficient market hypothesis...
Which of the following outcome(s) are most likely to be inconsistent with the efficient market hypothesis in a Fama-French three-factor world? a. Higher market beta stocks have higher returns. b. All stocks have the same return on average. c. Even though DFA recently offered small and value portfolios, which focus on earning the high returns in small and value stocks, investors do not feel such stock portfolios offer more attractive investment opportunities in terms of risk-return tradeoff than other stock...
Which of the following statements is CORRECT? a. The market price of a bond will always...
Which of the following statements is CORRECT? a. The market price of a bond will always approach its par value as its maturity date approaches, provided the bond’s required return remains constant. b. If the Federal Reserve unexpectedly announces that it expects inflation to increase, then we would probably observe an immediate increase in bond prices. c. The total yield on a bond is derived from dividends plus changes in the price of the bond. d. Bonds are generally regarded...
Are these two statements correct? Statement 1: Alpha is the difference between a real return and...
Are these two statements correct? Statement 1: Alpha is the difference between a real return and a benchmark return. If the benchmark is too low (high), the alpha will be too high (low). This is the “joint hypothesis problem.” Any test of market efficiency is also jointly a test of the underlying assumed equilibrium model. Statement 2: Long-run abnormal returns are more difficult to establish than short-run abnormal returns. A. Both statements are correct. B. Both statements are incorrect. C....
Please answer Which of the following statements about the Arbitrage Pricing Theory (APT) are correct? Check...
Please answer
Which of the following statements about the Arbitrage Pricing Theory (APT) are correct? Check all that apply The APT is more general than the Capital Asset Pricing Model (CAPM) The APT maintains that the realized return on any stock depends on changes unique to the firm. The APT model maintains that the realized returns on stocks depend on unexpected changes in fundamental economic factors The APT identifies all relevant factors that affect the realized returns on stocks Imani,...
Which of the following statements is CORRECT? Group of answer choices -The CAPM has been thoroughly...
Which of the following statements is CORRECT? Group of answer choices -The CAPM has been thoroughly tested, and the theory has been confirmed beyond any reasonable doubt. -A graph of the SML as applied to individual stocks would show required rates of return on the vertical axis and standard deviations of returns on the horizontal axis. -If investors become more risk averse, then (1) the slope of the SML would increase and (2) the required rate of return on low-beta...
5. Which of the following statements is CORRECT? a. The CAPM has been thoroughly tested, and...
5. Which of the following statements is CORRECT? a. The CAPM has been thoroughly tested, and the theory has been confirmed beyond any reasonable doubt. b. A graph of the SML as applied to individual stocks would show on beta the vertical axis and required rates of return on the horizontal axis. c. If two "normal" or "typical" stocks were combined to form a 2-stock portfolio, the portfolio's expected return would be a weighted average of...
hello! can I have help with th3se MCQ? I know it may
seem a lot of buy they are easy to answer and take very little. I
am just sure of the answers. thanks
2. Which of the following is true about "double coincidence of wants"? a) It relates to monetary economy b) It does not happen in an economy with financial system. c) It is a necessary condition for barter economy d) It allows production and consumption to be...
SELECT ALL THAT APPLY PLEASE
Which of the following statements about the relationship between investment risk and return are true? A. High risk leads to high reward. OB. Derivatives offer virtual certainty of high returns. oc. Individuals who invest in stocks expect to earn a risk premium in return for the chance they they might lose their investment. OD. Investment in TIPS provides protection against inflation and stock market risk. O E. High risk can lead to high reward. OF....
help with these following mcqs
14 which of the following statements about the London Stock Exchange is INCORRECT? a) It used to be membership based but now is publicly owned b) Its main market is for established companies Most trading occurs on the floor-based system d) The commission rate was very high before the Big Bang in 1986 (2 Marks) 15 Which of the following with regard to activities on financial markets is incorrect? a) A speculation strategy can be...
Please answer
Which of the following statements about the Arbitrage Pricing Theory (APT) are correct? Check all that apply The APT is more general than the Capital Asset Pricing Model (CAPM) The APT maintains that the realized return on any stock depends on changes unique to the firm. The APT model maintains that the realized returns on stocks depend on unexpected changes in fundamental economic factors The APT identifies all relevant factors that affect the realized returns on stocks Imani,...
Most questions answered within 3 hours.
-
there is a function to create two random numbers between 1 and
25 and a function...
asked 14 minutes ago -
At a certain temperature, the ?pKp for the decomposition of
H2SH2S is 0.832.0.832.
H2S(g)↽−−⇀H2(g)+S(g)H2S(g)↽−−⇀H2(g)+S(g)
Initially, only...
asked 7 minutes ago -
Part 1.C&A Fast Food has four activities in serving a
customer: greet customer, take order, process...
asked 14 minutes ago -
Which attribute allows you to specify a custom "thumbnail" for
multimedia elements?
asked 53 minutes ago -
How much 0.1200 M sodium hydroxide solution is need to titrate
14 mL of a 0.100...
asked 28 minutes ago -
An impulse is a change in momentum usually over
a short time. For which of the...
asked 32 minutes ago -
1a)When a 5000-kg roller coaster train full of riders approaches
the loading dock at a speed...
asked 53 minutes ago -
The Poseidon Swim Company produces swim trunks. The average
selling price for one of their swim...
asked 48 minutes ago -
If the elasticity of supply of a good is ∞, then its
A. supply curve is...
asked 34 minutes ago -
Write an application for the Shady Rest Hotel; the program
determines the price of a room....
asked 39 minutes ago -
USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (6)
QUESTIONS:
The following is a December 31,...
asked 55 minutes ago -
Suppose you plan to invest $5,000 each year (beginning at the
end of this year) into...
asked 45 minutes ago