Which of the following is not true?

The risks associated with investing in a stock can be somewhat mitigated through diversification, although systematic risks cannot be mitigated.

A stock's total dollar return incorporates both the impact from the change in stock price and dividend payments.

Systematic risks refers to the type of risks that is specific to a given company or industry specifically.

None of the above (all of the above are correct).

Tommy is considering investing in either ABCD Corp. or DEFG Corp. ABCD Corp. has the expected return of 14% and has the beta of 1.5. DEFG Corp. has the expected return of 11% and has the beta of 1.2. Assuming the risk-free rate of 2.9%, which of the following is true?

ABCD Corp. has the lower reward-to-risk ratio than DEFG Corp., making it a worse investment.

ABCD Corp. has the lower reward-to-risk ratio than DEFG Corp., making it a better investment.

ABCD Corp. has the higher reward-to-risk ratio than DEFG Corp., making it a worse investment.

ABCD Corp. has the higher reward-to-risk ratio than DEFG Corp., making it a better investment.

Assume ABC Corp.s stock has the expected return of 17.53%. ABC Corp.s beta is 1.63, and the current expected return of the market is 12.21%. What must the risk-free rate be according to the CAPM theory?

2.37% 2.73% 3.77% 4.12%

Let's say Tommy invests 250 shares in Stock A for $44.50 a share and 200 shares in Stock B for $51.30 a share. What are the portfolio shares for Stock A and Stock B respectively?

52.02% for Stock A, 47.98% for Stock B 47.98% for Stock A, 52.02% for Stock B 45.21% for Stock A, 54.79% for Stock B 54.79% for Stock A, 45.21% for Stock B

Assume ABCDEF Corp. had 14.43% in return this year. During the same time, the risk-free rate was 2.37%, the Beta for the industry ABCDEF Corp. belongs to was 1.43, and the Market rate of return was 11.2%. Which of the following is true?

ABCDEF Corp.s shares overperformed relative to its level of risk.

ABCDEF Corp.s shares performed in accordance with its level of risk.

ABCDEF Corp.s shares underperformed relative to its level of risk.

There is insufficient information to determine how ABCDEF Corp.s shares performed relative to its level of risk.

Which of the following is true about the efficient market hypothesis?

The form of efficient market hypothesis most commonly used in stock analysis is the semi-strong form of efficient market analysis, and it states that both public and private information are reflected in the pricing of assets in stock market.

The form of efficient market hypothesis most commonly used in stock analysis is the semi-strong form of efficient market analysis, and it states that public (that is publicly available for investors to use) information are reflected in the pricing of assets in stock market.

The form of efficient market hypothesis most commonly used in stock analysis is the strong form of efficient market analysis, and it states that both public and private information are reflected in the pricing of assets in stock market.

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