The best investment ____________________.

Select one or more:

a. maximizes reward

b. eliminates risk

c. minimizes risk

d. maximizes Sharpe

Which of the following is true about P-E?

Select one or more:

a. a relatively high P-E ratio likely indicates that the stock is undervalued

b. a relatively high P-E ratio always means the investment is high risk

c. a relatively high P-E ratio could indicate high expected growth in earnings

d. a relatively high P-E ratio means that the investment is valuable

We consider a stock's price to be fair when ___________.

Select one or more:

a. CAPM return is equal to the risk-free rate

b. alpha is zero

c. Market capitalization is equal to the price

d. P-E is equal to 1

You are choosing between the two ETFs in the table below. If you are looking for an ETF that outperforms the benchmark, which do you choose and why? + R-Squared Alpha Sharpe A 65% 3.5% 1.05 B 98% -0.10% 1.01 C 70% 1.2% 1.55 Select one: O ac O b. B C. A Which of the following is false about diversification? Select one or more: O a diversification eliminates risk b. diversification increases Sharpe ratios C. diversification increases returns O d. diversification increases alpha