You invest in Transphorm and it goes up 20% in 6 months when the NASDAQ in general does not, according to the risk/return tradeoff this tends to imply.
a) An increase in systematic risk
b) A decrease in systematic risk
c) An increase in non-systematic risk
d) A decrease in non-systematic risk
A increase in non-systematic risk,
As stock moved contrary to the Index, so non-systematic risk increases.
You invest in Transphorm and it goes up 20% in 6 months when the NASDAQ in...
A risk-averse investor has an opportunity to invest in the following securities: Security A costs $10 today and will have a value of $25 if the market goes up and $0 if the market goes down; Security B costs $8 today and will have a value of $12 if the market goes up and $6 if the market goes down; and Security C costs $5 today and will have a value of $20 if the market goes up and –$20...
If the quantity of headphones supplied increases 20 percent when the price goes up 15 percent, the price elasticity of supply is: Select one: a. 15 b. 20 c. 1.33 d. 0.75
The general rule when using the Internal Rate of Return to decide whether to invest in capital assets is to invest if the IRR the required rate of return OA. exceeds ○ B. does not exceed D C. is half as much as ○ D. Cannot determine from the information given
Unless otherwise stated in the problem, assume all bonds pay interest semi-annually 1. Even though bond markets are larger than equity markets, bond markets tend to be less liquid than equity markets. Evaluate the words in italics. True or False? a. True b. False 2. Which of the following statements is most likely FALSE: a. Increasing the number of stocks in a portfolio from 10 to 20 will decrease total risk b. Increasing the number of stocks in a portfolio...
You plan to invest $350,000 every 6 months for the next 10 years. What annual rate of return would you earn if you have $10,000,000 by the end of 10 years? (Round to 2 decimal places)
Problem1 A stock is currently trading at S $40, during next 6 months stock price will increase to $44 or decrease to $32-6-month risk-free rate is rf-2%. a. [4pts) What positions in stock and T-bills will you put to replicate the pay off of a European call option with K = $38 and maturing in 6 months. b. 1pt What is the value of this European call option? Problem 2 Suppose that stock price will increase 5% and decrease 5%...
Means of change y ou 1) What is the real will the band wa esta bond that 15 per year? s s) b) -8% 17) According to Say's Law, total output is a function of a) Labor; Utility b) Utility: Capital e) Technology: Capital d) Labor: Capital 18) When hond investors take Interest Rate Risk into consideration before purchasing bonds, they generally find that this risk tends to _when market interest rates are higher, Whe bond investors take Duration Risk...
You are managing an investor's account with $200,000. Investor's goal is to minimize the total risk. Possible investment options, expected rate of return, and risk indices of the investment options are given below. Stock Fund Money Market Fund 2% 0.04 12% Return Risk(unit/S) 0.25 Investor needs an annual income of $14000 Formulation: Dec Var: S- $to be invested in Stock Fund, M-.. in MM Obi. Function: Min (Total Risk) Min .25S+.04M Constraints: Budget: SM Return(Income): 0.12S+0.02M $14,000 Questions: (a) Average...
The risk-free rate is 0%. The market portfolio has an expected return of 20% and a volatility of 20%. You have $100 to invest. You decide to build a portfolio P which invests in both the risk-free investment and the market portfolio.a. How much should you invest in the market portfolio and the risk-free investment if you want portfolio P to have an expected return of 40%?b. How much should you invest in the market portfolio and the risk-free investment...
Assume that you can invest $1,000 in a savings account or a fund consisting of different stocks. If you invest in the savings account, you get 1% interest per year. The fund has annual return X with expected value E(X) = 6% and standard deviation o(X) = 20%. This means that, compared to the savings account, the fund has a higher return on average, but also comes with risk. When you invest y dollars in the fund, you will have...