6. What is the risk measure associated with the capital market line (CML)? Beta risk. Unsystematic...
6. What is the risk measure associated with the capital market line (CML)? Beta risk. Unsystematic risk. Total risk.
Homework Answers
Beta is a measure of systematic risk and total risk is equal to systematic risk + unsystematic risk
Measure of risk in CML is total risk which is represented by standard deviation
Hence, the answer is TOTAL RISK
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6. What is the risk measure associated with the capital market
line (CML)? Beta risk. Unsystematic...
Which of the following is statements is TRUE? Beta is a measure of unsystematic risk )...
Which of the following is statements is TRUE? Beta is a measure of unsystematic risk ) A beta of 1 implies the asset has the same unsystematic risk as the overall market. A beta > 1 implies the asset has more systematic risk than the overall market. A beta < 1 implies the asset has more systematic risk than the overall market.
In the following table, indicate whether each statement refers to the Capital Market Line (CML) or...
In the following table, indicate whether each statement refers to the Capital Market Line (CML) or to the Security Market Line (SML). Capital Market Line (CML) Security Market Line (SML) Statement This line defines the linear relationship between the expected return on an efficient portfolio and its standard deviation The slope of this line, th risk. - TRP/OM, reflects the investors' aggregated, or market-level, expected premium for This line describes the return on an individual security as the sum of...
Question 12 What does the beta measure? systematic risk diversifiable risk. company-specific risk. unsystematic risk.
Question 12 What does the beta measure? systematic risk diversifiable risk. company-specific risk. unsystematic risk.
Standard deviation measures _____ risk while beta measures _____ risk. systematic; unsystematic unsystematic; systematic total; unsystematic...
Standard deviation measures _____ risk while beta measures _____ risk. systematic; unsystematic unsystematic; systematic total; unsystematic total; systematic asset-specific; market
Which of the following statements about risk measures is correct? a. Beta is a measure of...
Which of the following statements about risk measures is correct? a. Beta is a measure of systematic risk, whereas standard deviation is the measure of total risk. b. Beta is a measure of total risk, whereas standard deviation is the measure of unsystematic risk. c. Beta is a measure of total risk, whereas standard deviation is the measure of systematic risk. d. Beta is a measure of total risk, whereas Standard deviation is the measure of systematic risk. e. Beta...
Compare and contrast the SML (The Security Market Line) , CML (The Capital Market Line) and...
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QUESTION 23 What does beta measure? a. Unsystematic Risk. b. Systematic Risk. c. Equity Risk Premium....
QUESTION 23 What does beta measure? a. Unsystematic Risk. b. Systematic Risk. c. Equity Risk Premium. d. Total Risk. QUESTION 24 Which of the following is an advantage of an indexed equity mutual fund as compared to a managed equity fund? a. Indexed funds have lower operating costs because of less stock trading. b. Indexed funds generally have better portfolio managers. c. Indexed funds engage in more research than managed funds. d. Index funds generally have less systematic risk compared...
5. The Capital Market Line and the Security Market Line Aa Aa E In the following...
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5. The Capital Market Line and the Security Market Line In the following table, check whether...
5. The Capital Market Line and the Security Market Line In the following table, check whether each statement refers to the Capital Market Line (CML) or to the Security Market Line (SML). Statement Capital Market Line (CML) Security Market Line (SML) This line defines the linear relationship between the expected return on an efficient portfolio and its standard deviation. The slope of this line, (r̂Mr̂M – rRFrRF)/σMσM, reflects the investors’ aggregated, or market-level, expected premium for risk. This line describes...
The relation between the required rate of return and beta is called the a. security market...
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In the following table, indicate whether each statement refers to the Capital Market Line (CML) or to the Security Market Line (SML). Capital Market Line (CML) Security Market Line (SML) Statement This line defines the linear relationship between the expected return on an efficient portfolio and its standard deviation The slope of this line, th risk. - TRP/OM, reflects the investors' aggregated, or market-level, expected premium for This line describes the return on an individual security as the sum of...
Question 12 What does the beta measure? systematic risk diversifiable risk. company-specific risk. unsystematic risk.
Which of the following statements about risk measures is correct? a. Beta is a measure of systematic risk, whereas standard deviation is the measure of total risk. b. Beta is a measure of total risk, whereas standard deviation is the measure of unsystematic risk. c. Beta is a measure of total risk, whereas standard deviation is the measure of systematic risk. d. Beta is a measure of total risk, whereas Standard deviation is the measure of systematic risk. e. Beta...
5. The Capital Market Line and the Security Market Line Aa Aa E In the following table, indicate whether each statement refers to the Capital Market Line (CML) or to the Security Market Line (SML). Capital Market Line (CML) Security Market Line (SML) Statement This line defines the linear relationship between the expected return on an efficient portfolio and its standard deviation. The slope of this line, TM - PRF) / OM, reflects the investors' aggregated, or market-level, expected premium...
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