Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:3. The beta for the risk-free investment is closest to:
A) 1.
B) 0.
C) Unable to answer this question without knowing the risk-free
rate.
D) Unable to answer this question without knowing the market's
volatility.
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- Changing the market risk premium A. Changes neither the y-intercept nor the slope of the security market line B. Changes only the y-intercept of the security market line C. Changes only the slope of the security market line D. Changes both the y-intercept and the slope of the security market linearrow_forward1) Let us start with what is the difference between a real and a financial asset? 2) What is the risk-return tradeoff?arrow_forward1. Which form of market efficiency is the best among weak, semi strong and strong? 2. Is stock market efficient? Give logic in favour of your answerarrow_forward
- 37. If the semi-strong form of efficient market hypothesis does not fully hold, then active portfolio management could: a. Perform as well as the market. b. Out-perform the market. c. Under-perform passive investment strategies. d. Perform the same as passive investment strategies. e. Cannot be determined from the information given.arrow_forwardich of the following will not reduce risk in a portfolio? Select one: a. Selecting two securities that are perfectly positively correlated. b. Selecting two securities that are positively correlated. c. Selecting two securities that are perfectly negatively correlated. d. Selecting two securities that are negatively correlated.arrow_forwardA3) Finance Which one is a financial risk? Select one: a. Uncertainty about demand b. uncertainty about cost d. None of the abovearrow_forward
- According to the Capital Asset Pricing Model (CAPM), an asset with negative beta: a. Cannot exist b. Is expected to earn a negative return c. Should be short sold d. Will not be included in the market portfolio e. None of the abovearrow_forwardWhich of the following statements is false? A. Historical VaR simulation involves using past data as a guide to what will happen in the future. B. Illiquidity is observed when there is a large difference between the offered sale price and the bid price. C. Yield spared is reflected in the size of the bid-ask spreads. D. The stressed VaR is based on how market variables have moved during a particularly adverse time period.arrow_forwardWhich of the following is not related to overall market variability. I am not satisfy give downvote A•Financial risk B•Interest rate risk C•Purchasing power risk D•Market riskarrow_forward
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