Question
Question 1: Consider the following covariances between securities: Microsoft Wal-Mart Microsoft 0.2420 0.1277 Wal-Mart 0.1277 0.1413 The variance on a portfolio that is made up
Question 1: Consider the following covariances between securities:
| Microsoft | Wal-Mart |
Microsoft | 0.2420 | 0.1277 |
Wal-Mart | 0.1277 | 0.1413 |
The variance on a portfolio that is made up of a $6,000 investment in Microsoft stock and a $4,000 investment in Wal-Mart stock is closest to:
Options de la question 2 :
0.252 | |
0.414 | |
0.017 | |
0.171 | |
None of the above |
Question 2 : The amount of risk that will remain in a portfolio depends on the degree to which the stocks are exposed to:
| independent risks |
| diversifiable risks |
| common risks |
| idiosyncratic risks |
| None of the above |
Question 3 : A portfolio is efficient if and only if the expected return of every available security equals its:
| average return |
| weighted average return |
| realized return |
| required return |
| None of the above |
Question 4: Sisyphean Industries is seeking to raise capital from a large group of investors to fund a new project. Suppose that the efficient portfolio has an expected return of 14% and a volatility of 20%. Sisyphean's new project is expected to have a volatility of 40% and a 70% correlation with the efficient portfolio. The risk-free rate is 4%. The required return for Sisyphean's new project is closest to:
Options de la question 10 :
| 24% |
| 14% |
| 18% |
| 10% |
| None of the above |
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