An investment with a high return is likely to be high risk A. True B. False

An investment requires a total return that comprises: O a real rate of return and compensation for inflation. a real rate of return, compensation for inflation, and a risk premium. compensation for inflation and a risk premium. a real rate of return, compensation for inflation, a risk premium, and compensation for time and effort devoted to researching alternative investments. None of the above

ich 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.

A3) Finance Which one is a financial risk? Select one: a. Uncertainty about demand b. uncertainty about cost d. None of the above

The risk-adjusted discount rate reduces investment. True or false?

Which one of the following is a property of a pure arbitrage portfolio?a. Negative investment.b. Zero return.c. Positive systematic risk.d. Zero total risk.

Answer whether each of the following statements is correct and explain your argument. \ (a) According to CAPM, the expected return of a risky asset is larger than the risk free rate. (b) According to CAPM, the expected return of a risky asset increases with its variance. (c) According to the separation property, the optimal risky portfolio for an investor dependson the investor’s personal preference. (d) A less risk-averse investor has a steeper indifference curve for the utility function.

Systematic risk is diversifiable, so it is an investment's relevant risk. Unsystematic risk is O True False

According to our textbook, risk is a: C. Unexpected loss D. All of the above B. Expected loss A. Trade-off with return

What does risk tolerance measure in the context of investment strategy? This is a multiple choice question. Once you have selected an option, select the submit button below The ability to take on higher risks for potentially higher returns The willingness to accept losses in the short term The capacity to afford potential losses The preference for low-risk, low-return investments