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Presentation/PPT
27/08/2022
Hi, I just finished a finance quiz, but I’d like to check my answers because I am not too sure about some of them. Thank you!1. The Value-at-Risk measure assumes which one of the following? (Points : 1)Returns are normally distributedPortfolios lie on the efficient frontierAll portfolios are fully diversifiedReturns tend to follow repetitive patternsThe risk premium is constant over timeQuestion 2. 2. What is the extra compensation paid to an investor who invests in a risky asset rather than in a risk-free asset called? (Points : 1)a. Efficient returnb. Correlated valuec. Risk premiumd. Expected returne. Realized returnQuestion 3. 3. A portfolio has an average return of 13.3 percent, a standard deviation of 14.7 percent, and a beta of 1.35. The risk-free rate is 2.8 percent. What is the Sharpe ratio? (Points : 1)a. .49b. .52c. .63d. .71e. .75Question 4. 4. Which one of the following assesses risk by stating the probability of a loss a portfolio might incur within a stated time period given a specific probability? (Points : 1)Sharpe ratioJensen’s alphaTreynor ratioRaw return measurementValue-at-RiskQuestion 5. 5. Which one of the following statements is correct concerning asset allocation? (Points : 1)Because there is an ideal mix, all investors should use the same asset allocation for their portfolios.The minimum variance portfolio will have a 50/50 asset allocation between stocks and bonds.Asset allocation affects the expected return but not the risk level of a portfolio.There is an ideal asset allocation between stocks and bonds given a specified level of risk.Asset allocation should play a minor role in portfolio construction.Question 6. 6. A portfolio has a beta of 1.26, a standard deviation of 15.9 percent, and an average return of 15.07 percent. The market rate is 12.7 percent and the risk-free rate is 3.6 percent. What is the Sharpe ratio? (Points : 1)a. .61b. .68c. .72d. .84e. .88Question 7. 7. You own three stocks which have betas of 1.16, 1.34, and 1.02. You would like to add a fourth security such that your portfolio beta will match that of the market. Given this situation, the new security __________. (Points : 1)must have a beta of 1.0must have a beta of zerocould be a U.S. Treasury billcould have any beta greater than 1.0must have a portfolio weight of 50 percent or moreQuestion 8. 8. Correlation is the _____________________. (Points : 1)squared measure of a security’s total riskextent to which the returns on two assets move togethermeasurement of the systematic risk contained in an assetdaily return on an asset compared to its previous daily returnspreading of an investment across a number of assetsQuestion 9. 9. A stock with which one of the following betas has an expected return that most resembles the overall market expected rate of return? (Points : 1)a. .33b. .74c. .99d. 1.06e. 1.22Question 10. 10. According to the systematic risk principle, the reward for bearing risk is based on which one of the following types of risk? (Points : 1)a. Unsystematicb. Firm specificc. Expectedd. Systematice. Diversifiable
1. The Value-at-Risk measure assumes which one of the following? (Points : 1)a. Returns are normally distributedb. Portfolios lie on the efficient frontierc. All portfolios are fully…
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The writer is very fast, professional and responded to the review request fast also. Thank you.
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