Question
When looking at the correlation of a pair of assets, we say the correlation is weak (and therefore good for diversifcation) is Question 1 options:
When looking at the correlation of a pair of assets, we say the correlation is weak (and therefore good for diversifcation) is
Question 1 options:
| if it is close to zero as long as it's positive |
| it is highly positive |
| if it is close to zero - whether negative or positive |
| if it is highly negative |
Question 2 (1 point)
In the simplified CAPM model, the dependent variable (that is, the Y variable) is
Question 2 options:
| The returns of the stock with the highest Sharpe Ratio |
| The Market's return |
| The difference between the asset's returns and the market's return |
| The Asset's return |
Question 3 (1 point)
When looking to replace a low performing stock in the portfolio, which attribute or value would NOT likely be effective?
Question 3 options:
| Its current price |
| Its performance compared to the S&P |
| Its sector performance compared to other sectors in the S&P |
| Its correlation compared to the other stocks in the portfolio |
Question 4 (1 point)
A beta less than one does not necessarily mean the risk is lower than the S&P because
Question 4 options:
| We need to also consider Alpha |
| Beta does not measure risk |
| Beta is just an estimate |
| A Beta lower than one implies greater risk |
Question 5 (1 point)
We can calculate the probability of an estimated statistic exceeding a certain value if we know
Question 5 options:
| its standard error |
| its geometric mean |
| its correlation with the S&P |
| the sample size |
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