CHAPTER 21 QUIZ 56 TO 60
56. The correlation coefficient:
A. Measures the amount of risk associated with a given security at a given moment in time
B. Measures the joint movement between two variables
C. Measures the expected value of a security at a specified moment in time
D. All of the above
57. The standard deviation of a risk-free asset is:
A. 1
B. 0
C. -1
D. Any number between -1 and 1
58. A good way to minimize risk and receive an optimum return on your portfolio is:
A. Through diversification
B. Buy only risk-free securities
C. Through blue-chip stock purchases only
D. Through junk-bonds
59. The capital asset pricing model (CAPM) takes off where the _________ concluded
A. Security market line
B. Capital market line
C. Efficient frontier and Markowitz portfolio theory
D. Arbitrage pricing theory
60. One way to express the trade-off between risk and return for an individual security is through:
A. The security market line
B. The beta coefficient
C. The correlation coefficient
D. Arbitrage pricing theory
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