Question
kindly answer all the questions please, if not please dont take the question thanks! 1. According to the Capital Markets Line, an investor's degree of
kindly answer all the questions please, if not please dont take the question thanks!
1. According to the Capital Markets Line, an investor's degree of risk aversion will determine his or her ______. I. Optimal risky portfolio weight in complete portfolio II. Expected return of the chosen portfolio III. Standard deviation of the chosen portfolio
I only | ||
II only | ||
I and II only | ||
I and III only | ||
I, II, and III |
2. If an investor places a _________ order the stock will be bought if its price decrease to the stipulated level. If an investor places a __________ order the stock will be sold if its price decreases to the stipulated level.
stop-buy; limit sell | ||
market; limit sell | ||
stop-loss; stop-buy | ||
limit buy; market | ||
limit buy; stop-loss |
3.
Suppose there is only one risky asset and the risk-free asset. If Investor Xs risk aversion is less than Investor Ys risk aversion, then Investors X and Ys portfolios will have the same ________ [I] Portfolio weight on the risky asset [II] Expected return [III] Sharpe Ratio
I only | ||
II only | ||
III only | ||
I & III | ||
I, II & III |
4.
The return of a price-weighted index is equivalent to the investment return from: [I] Investing in one share of each stock in the index [II] Investing $1 in each stock in the index [III] Investing 1% of shares outstanding in each stock in the index
I only | ||
II only | ||
III only | ||
None of the above |
5.
The table presents forecasts of the returns of stock market and probability of each state of the economy for next year. Calculate the standard deviation.
State of Economy | Return | Prob. of State |
Recession | -10% | 0.15 |
Normal | 6% | 0.60 |
Expansion | 25% | 0.25 |
6.9% | ||
8.4% | ||
11.1% | ||
12.4% | ||
None of the above |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started