Basic Finance Risk vs Return

Please check and correct my answers.

Investors want ____ returns and ___ risk.

Answer: high return, low risk

Which statement about the efficient set, minimum-variance set and feasible is incorrect?
a) the minimum variance is the set of all portfolios with the lowest variance for a given expected return
b) the efficient set is smaller than the feasible set
c) the efficient set is a subset of a feasible set
d) one’s opinions determine the efficient set
e) one’s preference determine the feasible set

Answer: d

Stock X with $20k invested returned 20%. Stock B with $60k invested returned 8%. Stock Z with $20k invested returned -10%. What was the overall portfolio return?

Answer: 15.8%

Ex ante is _____ (before or after the fact) and ex post is _____ (based on the opinions of forecasters, history, observation).

Answer:
ex ante: before the fact
ex post: history

Which statement(s) is correct?
a) Portfolio variance will always be lower than portfolio return
b) The calculation of neither expected portfolio return no expected portfolio variance depends on the state of nature that actually occurs.

Answer: both are correct

You have 2 standard 6-sided dice. Let a equal the value of the first, b equal the value of the second and c equal the sum of the two values. What is the correlation?

Answer: no relationship, 0 correlation

When the correlation between 2 securities is 0, there is no reduction in risk through combining the securities into a portfolio. This is the only situation where forming portfolios does not provide risk reduction to an investor. True or False.

Answer: True

  1. 👍
  2. 👎
  3. 👁
  1. I am very disappointed that one of my students would commit such a blatant violation of the academic integrity policy. Rest assured, if any student submits an assignment which even moderately resembles the one posted here you will be prosecuted.

    I will ask that the original author of this post please come forward and identify themselves to me. If you come forward before 9am tomorrow i will not persue this violation any further.

    -Dr. Richard Deaves, PhD

    1. 👍
    2. 👎

Respond to this Question

First Name

Your Response

Similar Questions

  1. Finance

    Assume the economy consisted of three types of people. 50% are fad followers, 45% are passive investors who hold the market portfolio, and 5% are informed traders. The portfolio consisting of all the informed traders has a beta of

  2. Spanish II, U3 L3- Saber y conocer

    1) The largest city in Costa Rica is... Answer: San Jose 2) Conocen ellos a mi amiga Answer: Si, conocen a tu amiga 3)____ tu donde esta la biblioteca Answer: Sabes 4) Nosotros ____ quien el el presidente Answer: sabemos 5) Juan

  3. math

    Compute the total and annual returns on the described investment. Six years after buying 200 shares of XYZ stock for ​$50 per​ share, you sell the stock for $ 15, 500. The total return is ___% The annual return is ___%

  4. English

    @ words : 1- curtail 2- devastate 3- digress 4- incentive 5- incorporate 6- indispensable 7- intermittent 8- rigor 9- squander 10-succumb Linda never had to work hard to make good grades in high school. But in college, where the

  1. finance

    3. Assume the economy consisted of three types of people. 50% are fad followers, 45% are passive investors (they have read this book and so hold the market portfolio), and 5% are informed traders. The portfolio consisting of all

  2. Math help

    Complete the table to determine the balance A for $20,000 invested at rate r = 6% for t years, compounded continuously. chart looks like this: t 10 20 30 40 50 A ___ ___ ___ ___ ____ I need to answer A

  3. Time value of money

    In investors deposits 10000.ten years later it is worth 17910.what rate of return did the investors earns on investment

  4. investment and portifolio management

    At present, suppose the risk-free rate is 10 percent and the expected return on the market portfolio is 15 percent. The expected returns for four stocks are listed together with their expected betas. Stock Expected Return Beta NIC

  1. financial

    Are these correct? 1. Agency theory examines the relationship between the? shareholders and the firm's transfer agent. 2. Proper risk-return management means that? the firm must determine an appropriate trade-off between risk and

  2. Science

    Batteries change ____ energy into _____ energy Chemical and electric Converting the suns energy into electricity does not work if it is ____ time or there is ___ weather night and bad? The suns energy can be turned into electrical

  3. spanish

    Usa la forma presente de ESTAR con el participio pasado del verbo entre paréntesis para completar cada oración. Are these answers correct? 1. La maleta ya _____1.)____ ______2.)_______. (abrir) 1.) está 2.) 2.) abierto 2. ¿

  4. Math

    The management of a private investment club has a fund of $114,000 earmarked for investment in stocks. To arrive at an acceptable overall level of risk, the stocks that management is considering have been classified into three

You can view more similar questions or ask a new question.