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CHAPTER 21 QUIZ 6 TO 10 6. The essence of the capital market line is that the only way to earn greater returns is to take increasingly greater risks. 7. If a particular stock is less risky than the market, its beta coefficient will fall somewhere between -1 and 0. 8. Unsystematic risk earns a risk premium because it cannot be offset through efficient portfolio management. 9. Unlike the capital market line, the security market line is uniq

Other / Other allied-american-university / Other 03 Sep 2015

CHAPTER 21 QUIZ 11 TO 15 11. Risk measurement usually considers only losses rather than the dispersion of all outcome. 12. The expected value is a commonly used measure of dispersion. 13. The expected value for a portfolio is a weighted average of the individual securities' expected values. 14. The standard deviation for a portfolio is a weighted average of the individual securities' standard deviations. 15. The greater the negative cor

Other / Other allied-american-university / Other 03 Sep 2015

CRJ 305 WEEK 8 QUIZ 1 When confronted with a moral dilemma care ethics encourages us to consider 2 Which of the following is NOT one of the universal conditions of human flourishing outlined in your text 3 Which of the following is a key Aristotelian idea that describes a midpoint between extremes of excess and deficiency? 4 Traits of character that dispose a person to act in a moral fashion are typically referred to as:

Other / Other allied-american-university / CRJ 305 03 Sep 2015

CRJ 305 WEEK 8 QUIZ 1 Justifications for punishment that appeal to beneficial consequences incapacitate deterrence and rehabilitation violate Kant's second variation of the categorical imperative. 2 Human needs and desires are best met by cooperating with others. 3 Dignity is not something that people must earn or lose through their actions according to Kantian ethics. 4 Utilitarianism could allow for disproportionately harsh or lenie

Other / Other allied-american-university / CRJ 305 03 Sep 2015

CHAPTER 21 QUIZ 16 TO 20 16. Points above the efficient frontier have superior risk-return characteristics to those along the efficient frontier, but are not part of the feasible set. 17. Points below the efficient frontier have less desirable risk-return characteristics than those along the efficient frontier. 18. The steeper the slope on a risk-return indifference curve, the more anxious an investor is to take risks. 19. An investor is

Other / Other allied-american-university / Other 03 Sep 2015

CHAPTER 21 QUIZ 21 TO 25 21. The capital asset pricing model (CAPM) takes off where the efficient frontier concludes with the introduction of a new investment outlet, the risk free asset (Rf). 22. Points along the Capital Market Line represent a combination of a risk-free asset and M (the market portfolio) with the possibility of borrowing beyond point M. 23. In using the Capital Market Line, the higher the portfolio standard deviation

Other / Other allied-american-university / Other 03 Sep 2015

CHAPTER 21 QUIZ 26 TO 30 26. By picking stocks that are perfectly correlated, unsystematic risk may be eliminated. 27. The Security Market Line shows the risk-return trade-off for an individual security. 28. The investor is only assumed to received additional returns for unsystematic risk. 29. An assumption of the capital asset pricing model is that investors can borrow or lend an unlimited amount of funds at a given risk-free rate. 30

Other / Other allied-american-university / Other 03 Sep 2015

CHAPTER 21 QUIZ 31 TO 35 31. In general, the greater the dispersion of outcomes, the lower the risk. 32. Unsystematic risk cannot be diversified away. 33. It can be assumed that the lower the expected value of an investment, the higher the standard deviation will be. 34. An underlying assumption to the CAPM model is that an individual can choose an investment combining the return on the risk-free asset with the market rate of return, a

Other / Other allied-american-university / Other 03 Sep 2015

CHAPTER 21 QUIZ 36 TO 40 36. According to the text, a risk averse investor A. Demands a premium for assuming risk B. Will only participate in low risk or risk-free investments C. Is one of a small minority in the United States D. More than one of the above 37. Assume a portfolio has the possibility of returning 7 percent, 8 percent, 10 percent or 12 percent with likelihood of 20 percent, 30 percent 25 percent and 25 percent respectiv

Other / Other allied-american-university / Other 03 Sep 2015

CHAPTER 21 QUIZ 41 TO 45 41. The efficient frontier A. Represents all possible portfolios for a given level of risk B. Separates unattainable portfolios from less than optimal portfolios C. Is different for every investor D. More than one of the above 42. Under Markowitz' theory, the ideal portfolio for an investor is represented by A. The point of tangency between the efficient frontier and the investor's indifference curve B. The hig

Other / Other allied-american-university / Other 03 Sep 2015