Answer : The unique risk |
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In well diversified portfolio, which part of the risk of individual assets is likely to be...
Question 19 1 pts A well-diversified portfolio is most likely to have: Only systematic risk Both, systematic and unsystematic risk Only unsystematic risk
Please answer The benchmark for a well-diversified stock portfolio is the market portfolio, which is a portfolio containing all stocks. The relevant risk of an individual stock is measured by its beta coefficient, which is defined under the Capital Asset Pricing Model (CAPM) as the amount of risk that the stock contributes to the well-diversified portfolio. Based on your understanding of the CAPM and beta, answer the following question: Which of the following statements about stock's correlation with the market...
Question 19 1 pts A well-diversified portfolio is most likely to have: Both, systematic and unsystematic risk Only systematic risk Only unsystematic risk
What type of risk can be eliminated in a well diversified portfolio? unsystematic market undiversifiable systematic
QUESTION 8 If an Fls trading portfolio of stock is not well-diversified, the additional risk that must be taken into account is O unsystematic risk. O default risk. O timing risk. O interest rate risk. O systematic risk
If holding assets in a diversified portfolio, why is beta, and not standard deviation, the appropriate measure of risk for an individual asset? 6. If holding assets in a diversified portfolio, why is standard deviation the appropriate measure of risk for the portfolio? 7.
questions 37-40 please risk is negligible. 37. In a well-diversified portfolio, A. No diversifiable B. Market C. Systematic D. Idiosyncratic E. None of the above 38. The possibility of arbitrage arises when A. There is no consensus among investors regarding the future direction of the market, and thus trades are made arbitrarily B. Mispricing among securities creates opportunities for riskless profits C. Two identically risky securities carry the same expected returns D. Investors do not diversify E. All of the...
To solve this problem, note that a well-diversified portfolio should lie on the Capital Market Line. The market portfolio has an expected return of 11.5 percent and a standard deviation of 19 percent. The risk-free rate is 4.1 percent. a. What is the expected return on a well-diversified portfolio with a standard deviation of 9 percent? b. What is the standard deviation of a well-diversified portfolio with an expected return of 20 percent?
What type of risk can never be diversified away? systematic risk unsystematic risk total risk All of the above
6. The beta coefficient A stock's contribution to the market risk of a well-diversified portfolio is called risk. It can be measured by a metric called the beta coefficient, which calculates the degree to which a stock moves with the movements in the market. Based on your understanding of the beta coefficient, indicate whether each statement in the following table is true or false: Statement True False Beta coefficients are generally calculated using historical data. Higher-beta stocks are expected to...