The systematic risk principle has an important implication, which is: a. Systematic risk is preferred to unsystematic

Question:

The systematic risk principle has an important implication, which is:

a. Systematic risk is preferred to unsystematic risk.

b. Systematic risk is the only risk that can be reduced by diversification.

c. The expected return on an asset is independent of its systematic risk.

d. The expected return on an asset depends only on its systematic risk.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals Of Investments Valuation And Management

ISBN: 9781266824012

10th Edition

Authors: Bradford Jordan, Thomas Miller, Steve Dolvin

See More Books

Question Posted: Dec 29, 2023 09:55 PM

See More Questions

The CFO of Bunyan Lumber Corporation, Anita Rai has decided to invest some money in the financial market to diversify the risks of business operations and increase rate of return. She has been...
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
Multiply. 3(4-63) Multiply. (10 + 1)(4/10 + 1) The answer is (Type an exact answer, using radicals as needed.) Rationalize the denominator. Assume that all expressions under radicals represent...
Strickland Co. currently charges manufacturing over-head costs to products using machine hours. However, company management believes that the use of ABC would provide more realistic cost estimates...
Crosslinked copolymers consisting of 60 wt% ethylene and 40 wt% propylene may have elastic properties similar to those for natural rubber. For a copolymer of this composition, determine the fraction...
The man of weight W1 attempts to lift himself and the seat of weight W2 using the rope and pulley system shown. Determine the force at A needed to do so, and also find his reaction on the seat....
What does SWOT analysis stand for?
Your company, Acme Widgets, sells its widgets worldwide. Acme has a contract for 250,000 widgets to be shipped to the Czech Republic. The price stated in the offer and acceptance is $1 per widget,...
Entries for Stock Dividends Zurich Corporation has 14,000 shares of 570 par common stock outstanding on June 8, Zurich Corporation declared a 3% stock dividend to be issued August 12 to stockholders...
Why is there a trend toward giving an increasing fraction of chip area to cache memory?
A financial markets security market line (SML) describes: a. The relationship between systematic risk and expected returns. b. The relationship between unsystematic risk and expected returns. c. The...
The systematic risk principle states that: a. Systematic risk doesnt matter to investors. b. Systematic risk can be essentially eliminated by diversification. c. The reward for bearing risk is...
Visit http://www.ergoweb.com/casestudies, find an interesting ergonomics case study, and summarize it.
If f ( x ) = ( 1 3 - In ( x ) ) ^ 8 , determine f ' ( 1 ) .
1. ThestocksAandBhavethefollowingdistributionsofreturns. A B Probability State1 3 4 0.2 State2 5 2 0.3 State3 4 8 0.2 State4 6 5 0.1 State5 6 1 0.2 2....
Define nested designs. Explain why the nested designs are important.
3 x y 3 + x y = l n ( x ) solve for d y d x
Let ln ( xy ) + y ^ 8 = x ^ 7 + 2 . Find dy / dx .
One hundred circumferential aluminum fins of rectangular profile are mounted on a 1.0-m tube having a diameter of 2.5 cm. The fins are 1 cm long and 2.0 mm thick. The base temperature is 180C, and...
Compare and contrast licensing and subcontracting.
From an investor's standpoint, what are the main differences between Treasury and municipal issues?
What are serial bonds? What purpose does this structure serve?
What is the difference between a revenue bond and a general obligation bond?
Just work out the assignment on your own sheet, you dont need the excel worksheet. Classic Coffee Company Best friends, Nathan and Cody, decided to start their own business which would bring great...
Financial information related to the proprietorship of Ebony Interiors for February and March 2019 is as follows: February 29, 2019 March 31, 2019 Accounts payable $310,000 $400,000 Accounts...
(b) The directors of Maureen Company are considering two mutually exclusive investment projects. Both projects concern the purchase of a new plant. The following data are available for each project...

The systematic risk principle has an important implication, which is: a. Systematic risk is preferred to unsystematic

Question:

Step by Step Answer:

The correct implication of the systematic risk principle is b Systematic risk is the only risk that ...View the full answer

Fundamentals Of Investments Valuation And Management

Students also viewed these Business questions