true or false: according to the CPM, the risk for a security with high diversifiable risk and high systematic risk is grater than the risk premium for a security with low diversifiable risk and high systematic risk.
true or false: according to the CPM, the risk for a security with high diversifiable risk and high systematic risk is grater than the risk premium for a security with low diversifiable risk and high systematic risk.
QUESTION 9 A risk premium is a the difference between the earings of a low risk asset and a high risk asset b. premium paid to a security holder to compensate him for bearing a higher risk c. both A&B d. none of the above
A risk premium is a the difference between the earnings of a low risk asset and a high risk asset Ob premium paid to a security holder to compensate him for bearing a higher risk c. both A&B od none of the above QUESTION 3 Profits of a monopoly are driven to zero a In the long run because the demand curve becomes more inelastic b. Immediately in the short-run as assets freely move from low-valued uses to high-valued uses...
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...
The risk that a security cannot be sold at a predictable price with low transaction costs at short notice is called liquidity risk! True or False True False
The risk that a security cannot be sold at a predictable price with low transaction costs at short notice is called liquidity is True or False True False Book
According to the CAPM, what is the expected return on a security given a market risk premium of 8%, a stock beta of 1.23, and a risk free interest rate of 2%?
- The tendency for tow variables to move together refers to their correlation (TRUE/FALSE)? - Diversifiable risk is the part of a security’s risk that can be eliminated by proper diversification while market risk remains after no company specific risk has been diversified (TRUE/FALSE)? - Floating-rate bonds are bonds that pay a fixed interest over their lifetime whereas fixed-rate bonds pay variable interest rates, which reflect the general level of interest rates (TRUE/FALSE)? - A market portfolio is a portfolio...
true or false: the risk premium for every asset is positive.
true or false: the market risk premium is always positive.
4) Why is the risk premium for equity securities more difficult than the one for det securities? 5) SD is NOT the best measure of risk for financial securities a. True b. False 6) The best description of financial security is : a. Financial security is a tool commonly used by investors for safety in financial markets b. Financial security is a requirement before getting into a financial market c. Financial security is a contract between a buyer willing to...