1. The weights in a value-weighted portfolio are computed with the end-of-year prices and quantities--not the beginning of year values.

Question 3 options:

False

True

2. The standard deviation of returns for the risk-free asset is

1) 0.5

2) 0

3) 1

4) depends on the position and shape of the yield curve

3.True or false? Under Sharpe's model, for the risky portion of their investments, all investors hold the market portfolio.

Fale

True

4.The variance of a large, equally weighted portfolio is not mainly determined by the risks (variances) of the individual stocks in the portfolio, but is mainly determined by the covariances of the stocks.

False

True