please help with all the questions on the worksheet thanks in advance

FINC 340: INVESTMENTS UNIT #6A WEEKLY QUIZ QUESTION SHEET DIRECTIONS: Here is the Unit #6 Weekly Quiz Question Sheet that you should submit to your Unit #6 Homework Assignment Folder. Please submit your Unit #6 Quiz Answer Sheet in MS Word format with the following file name: LastNameFirstInitial_Unit 06_QuizAnswerSheet.docx. For example, if you name is John Smith, the file name of your Answer Sheet should be SmithJ_Unit06_QuizAnswerSheet.docx. If you have any questions or comments, please do not hesitate to contact me. NAME: _____________________________________ Question Number 1 Question Which of the following risks confronting ABC Worldwide, Inc. is an example of an unsystematic risk? A. A possible decline in the value of its holdings of short-term securities due to fluctuation in interest rates B. A possible decline in its earnings due to a strike by its employees C. A possible decline in the purchasing power of its net income due to inflations D. A possible decline in its net worth due to the need to reinvest funds from an investment at a lower rate than was earned initially 2 According to Markowitz risk can be: A. Minimized and eliminated without diversification B. Eliminated without compromizing the overall returns C. Minimized by selecting an optimum combination of investments D. Analyzed exclusively 3 Which of the following statement(s) concerning beta coefficients is (are) correct? (1) Investors who tend to be risk averse should have a portfolio made up mostly of high-beta-coefficient securities. (2) Beta coefficients of particular securities change over time (3) Beta coefficients are constructed based on past data A. B. C. D. (1) only (1) and (3) only (1) and (2) only (2) and (3) only 1 4 A measure of the degree to which two variables move predictably is known as A. Covariance B. Standard deviation C. Semi-variance D. Positive selection 5 Which of the following concerning the standard deviation of a stock's rate of return is (are) correct: (1) The standard deviation of a stock's rate of return reflects both the systematic and unsystematic risks associated with a stock (2) Approximately 68% of the rates of return on the stock will fall within plus or minus one stand deviation of the average rate of return A. B. C. D. 6 (1) only (2) only Both (1) and (2) Neither (1) nor (2) Items that circumvent Fisher's Perfect World include: I. No barriers to trade II. Free flow of information III. The firm's indepent decisionmaking IV. Satisfying stockholder wealth maximization criteria V. Investor's receiving regular dividends A. B. C. D. I, II, III I, II, III IV, II, III, IV, V I, II, III, IV, V 7 Which of the following concerning systematic and/or unsystematic risk is not correct? A.. Unsystematic risk can be reduced through diversification of a portfolio B. A coefficient of determination of .75 in a portfolio means that 75% of the portfolio risk is unsystematic C. A portfolio's beta is a measure of its systematic risk D. A fully diversified portfolio has no unsystematic risk ' 8 Portfolio risks can be calculated. Which of the following statistical formulas calculate portfolio risk? A. Capital Asset Pricing Model (CAPM) B. Correlation coefficient C. Beta D. Standard deviation of the variance of returns 9 Unsystematic risk is diversifiable: A. True 2 B. False 10 The beta of a security: I. Is not the same as its systematic risk level II. Can be measured by standard deviation III. Is the slop of the capital market line A. B. C. D. III only II only I and III only None of the above 11 Investment risk can best be defined as the _________ in the expected return of an investment. A. volatility B. stematic component C. variability D. unsystematic component 12 Stocks X and Y produced the following returns in recent years: Year 1 2 3 4 5 Avg Stock X 6% 8% 4% 9% 11% 7.6% Stock Y 2% 0% 10% 12% 14% 7.6% Which of the following are the standard deviations of the returns on the two stocks? A. X = 2.7, Y = 6.2 B. X = 2.7, Y = 4.8 C. X = 3.8, Y = 6.5 D. X = 3.8, & = 5.9 3