Question 1

Niles is making an investment with an expected return of 12 percent. If the standard deviation of the return is 4.5 percent, and if Niles is investing $100,000, then what dollar amount is Niles 90 percent sure that he will have at the end of the year? (Do not round intermediate computations) .

Accepted Answer

A)   $100,000.00
B)   $104,597.50
C)   $116,500.00
D)   $119,402.50

Question 2

In a game of chance, the probability of winning $50 is 40 percent and the probability of having to pay $50 is 60 percent. What is the expected value of this game?

Accepted Answer

A)   $10
B)   $0
C)   $10.
D)   $25

Question 3

Any change in its beta is likely to affect the required rate of return on a stock, which implies that a change in beta will likely have an impact on the stock's price, other things held constant.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is correct?

Accepted Answer

A)   The greater the risk associated with an investment, the lower the return investors expect from it.
B)   When choosing between two investments that have the same level of risk, investors prefer the investment with the higher return.
C)   If two investments have the same expected return, investors prefer the riskiest alternative.
D)   When choosing between two investments that have the same level of risk, investors prefer the investment with the lower return.

Question 5

The coefficient of variation is a good measure of the amount of risk that an asset will contribute to a diversified portfolio of assets.

Accepted Answer

A) True 
 B)False

Exam 7: Risk and Return

In a game of chance, the probability of winning $50 is 40 percent and the probability of having to pay $50 is 60 percent. What is the expected value of this game?

Correct Answer
verified

Niles is making an investment with an expected return of 12 percent. If the standard deviation of the return is 4.5 percent, and if Niles is investing $100,000, then what dollar amount is Niles 90 percent sure that he will have at the end of the year? (Do not round intermediate computations) .

Correct Answer
verified

The coefficient of variation is a good measure of the amount of risk that an asset will contribute to a diversified portfolio of assets.

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Any change in its beta is likely to affect the required rate of return on a stock, which implies that a change in beta will likely have an impact on the stock's price, other things held constant.

Correct Answer
verified

Exam 7: Risk and Return

In a game of chance, the probability of winning $50 is 40 percent and the probability of having to pay $50 is 60 percent. What is the expected value of this game?

Correct AnswerverifiedShow Answer

Niles is making an investment with an expected return of 12 percent. If the standard deviation of the return is 4.5 percent, and if Niles is investing $100,000, then what dollar amount is Niles 90 percent sure that he will have at the end of the year? (Do not round intermediate computations) .

Correct AnswerverifiedShow Answer

The coefficient of variation is a good measure of the amount of risk that an asset will contribute to a diversified portfolio of assets.

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Any change in its beta is likely to affect the required rate of return on a stock, which implies that a change in beta will likely have an impact on the stock's price, other things held constant.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified