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Q14 1 Point Which of the following statements are not correct concerning the standard deviation of the monthly returns on an asset? 1. The larger the standard deviation, the less the actual returns tend to differ from the average return. II. The larger the standard deviation, the larger the variance. III. The larger the standard deviation, the greater the risk of the asset. IV.The larger the standard deviation, the lower the risk of the asset. Choice 1 of 5:1, II and III only Choice 2 of 5:1, III and IV only Choice 3 of 5:1 and IV only Choice 4 of 5:1 only Choice 5 of 5:1 and III only Q15 1 Point Triangular arbitrage would take place if the_rate between two currencies was _the ratio of the two direct rates. Choice 1 of 5:Cross; greater than Choice 2 of 5:Spot; less than Choice 3 of 5:Cross; less than Choice 4 of 5:Cross; unequal to Choice 5 of 5:Spot; equal to Q16 1 Point A portfolio contains three assets. The first asset comprises 30% of the portfolio and has a beta of 0.98. The second asset comprises of 25% and has a beta of 1.26 and the third asset has a beta of 2.38. The portfolio beta is: Choice 1 of 5:1.98 Choice 2 of 5:1.35 Choice 3 of 5:1.68 Choice 4 of 5:1.38 Choice 5 of 5:1.54