please answer these two fast: 26. What is the most likely correlation coefficient between a stock-index mutual fund and the S&P 500? -1 .5 0 1 25. Market risk is also called ________ and ________. unique risk; diversifiable risk systematic risk; nondiversifiable risk unique risk; nondiversifiable risk systematic risk; diversifiable risk

please answer these two fast: 26. What is the most likely correlation coefficient between a stock-index mutual fund and the S&P 500? -1 .5 0 1 25. Market risk is also called and . unique risk; diversifiable risk systematic risk; nondiversifiable risk unique risk; nondiversifiable risk systematic risk; diversifiable risk

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A stock or mutual fund with a ____ beta means the security goes up when the market as a whole goes up ; a ____ beta indicates the opposite. a. positive; negative b. zero; negative c. negative; positive d. positive; zero
7. Consider the following information about Stocks I and II: Probability of Rate of Return if State Occurs State of Economy Recession Normal Irrational exuberance State of Economy .25 .50 .25 Stock I .02 .21 .06 Stock Il -.25 .09 .44 The market risk premium is 8 percent, and the risk-free rate is 4 percent. Which stock has the most systematic risk? Which one has the most unsystematic risk? Which stock is "riskier"? Explain.
27. You have developed the following data on three stocks:Stock Standard Deviation BetaA 0.15 0.79B 0.25 0.61C 0.20 1.29 If you are a risk minimizer, you should choose Stock ____ if it is to be held in isolation and Stock ____ ifit is to be held as part of a well-diversified portfolio.a. A; Ab. A; Bc. B; Ad. C; Ae. C; B
You have developed the following data to examine the impact of portfolio diversification. Which scenario seems to be out of place? # of stocks in the portfolio Diversifiable Risk Market Risk L. 2 stocks M. 20 stocks N. 30 stocks O. 60 stocks P. 100 stocks ΟΝ OL O M P 0.15 0.07 0.11 0.08 0.06 0.20 0.20 0.20 0.20 0.20
The concept of Portfolio Effect indicates that the more assets added to the portfolio, the less risk of the total portfolio Select one: O True O False Ne Jump to... CHAPTER 5-STOCK VALUA
A 243.
1)Please briefly define the following terms Risk Aversion Risk-Neutral Diversification Unsystematic Risk (also give examples) Systematic Risk (also give examples) 2)Please just list the four basic sources of long term funds. 3)Please explain the difference between the terms interest rate and required return by defining each. 4)Suppose you have a portfolio of Vestel and Turkcell with a beta of 1.8 and 0.9, respectively. If you put 29% of your money in Vestel, and the rest in Turkcell, what is the beta of your portfolio?
Suppose you manage an equity fund with the following securities. Use the following data to help build an active portfolio. Input Data Vogt Industries Isher Corporation Hedrock, Incorporated Alpha 0.012 0.006 0.016 Beta 0.277 1.015 1.630 Standard Deviation 0.156 0.168 0.181 Residual Standard Deviation 0.117 0.048 0.113 Information Ratio 0.1026 0.1250 0.1416 Alpha/Residual Variance 0.877 2.604 1.253 Market Data S&P 500 Treasury Bills Expected Raturn 12.00% 2.50% Standard Deviation 20.00% 0.00% Required: Using the information in the table above, please first calculate the initial weight of each stock in an active portfolio, using the Treynor Black approach. Then adjust each weight for beta. (Use cells A5 to D14 from the given information to complete this question.) Treynor-Black Model Vogt Industries Isher Corporation Hedrock, Incorporated…
Mf1. Question: 1 (Assume that two securities, A and B, constitute the market portfolio, their proportions and variances are 0.39, 160, and 0.61, 340, respectively. The covariance of the two securities is 190. Estimate the systematic risk (beta) of the two securities. Note that the covariance of security-/ with the market portfolio is simply the weighted average of the covariances of security-i with all the securities included in the market portfolio.
Beta is a measure of? Risk in a well diversified portfolio Systematic risk The extent to which the stocks return moves up and down with the market All of the avove
30. Gamma: Look at the following chart. Based only on this information, which underlying equity is the riskiest? UNDERLYI NG: A B C D DELT GAMM A: .51 .54 .50 .54 A: .09 .10 .12 .08
For CAPM, if we define Rm as the SP500 what is the alpha of the SP500 index fund? Re - Rf = alphabeta (Rm - Rf)

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