CHAPTER 21 QUIZ 31 TO 35

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, and this will provide superior returns to the efficient frontier at all points except M, where they are equal.
35. In an efficient market context, the ability to achieve high returns may be more directly related to absorption of additional risk than
superior ability in selecting stocks.

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