CHAPTER 21 QUIZ 36 TO 40

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 respectively. The expected value of the portfolio is
A. 10.0 percent
B. 9.0 percent
C. 9.3 percent
D. 9.25 percent
E. None of the above
38. 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 respectively. The standard deviation for the portfolio is
A. 5.717 percent
B. 3.510 percent
C. 1.873 percent
D. 6.480 percent
E. 3.842 percent
39. Assume a portfolio has the possibility of returning 7 percent, 8 percent, 10 percent or 12 percent with a likelihood of 20 percent, 30
percent 25 percent and 25 percent respectively. Considering the portfolio's standard deviation and expected value would you say that this
portfolio is of
A. Average yield, low risk
B. Lower than average yield, low risk
C. Average yield, average risk
D. Not enough information to tell
40. Because of portfolio effect, the most significant factor related to the risk of any investment is
A. Its standard deviation, or degree of uncertainty
B. Its effect on the risk of the portfolio
C. Systematic risk associated with the investment
D. None of the above