Characterizing Risk And Return

This question bank verified by Studydeets

Questions Bank

All Questions

Question 1

Free

Multiple Choice

Which of these includes any capital gain (or loss) that occurred as well as any income that you received from a specific investment?

Choose correct answer/s

average return

dollar return

market return

portfolio

Check answer

Question 2

Free

Multiple Choice

Which of these is the dollar return characterized as a percentage of money invested?

Choose correct answer/s

average return

dollar return

market return

percentage return

Check answer

Question 3

Free

Multiple Choice

Which of these is a measure summarizing the overall past performance of an investment?

Choose correct answer/s

average return

dollar return

market return

percentage return

Check answer

Question 4

Free

Multiple Choice

Which of these statements is true?

Choose correct answer/s

When people purchase a stock, they know exactly what their dollar and percent return are going to be.

Many people purchase stocks as they find comfort in the certainty for this safe form of investing.

When people purchase a stock, they know the short-term return, but not the long-term return.

When people purchase a stock, they do not know what their return is going to be-either short term or in the long run.

Check answer

Question 5

Free

Multiple Choice

Which of the following is defined as the volatility of an investment, which includes firm specific risk as well as market risk?

Choose correct answer/s

diversifiable risk

market risk

standard deviation

total risk

Check answer

Question 6

Multiple Choice

Which of these is a measure of risk to reward earned by an investment over a specific period of time?

Choose correct answer/s

coefficient of variation

market deviation

standard deviation

total variation

To unlock the question

Question 7

Multiple Choice

Which of the following is an index that tracks 500 companies, which allows for a great deal of diversification?

Choose correct answer/s

Nasdaq

Fortune 500

S&P 500

Wall Street Journal

To unlock the question

Question 8

Multiple Choice

Which of these is defined as a combination of investment assets held by an investor?

Choose correct answer/s

bundle

market basket

portfolio

All of these choices are correct.

To unlock the question

Question 9

Multiple Choice

Which of the following is defined as the portion of total risk that is attributable to firm or industry factors and can be reduced through diversification?

Choose correct answer/s

firm specific risk

market risk

modern portfolio risk

total risk

To unlock the question

Question 10

Multiple Choice

Which of these is the portion of total risk that is attributable to overall economic factors?

Choose correct answer/s

firm specific risk

market risk

modern portfolio risk

total risk

To unlock the question

Question 11

Multiple Choice

Which of the following is another term for market risk?

Choose correct answer/s

firm specific risk

modern portfolio risk

nondiversifiable risk

total risk

To unlock the question

Question 12

Multiple Choice

Which of the following is the concept and procedure for combining securities into a portfolio to minimize risk?

Choose correct answer/s

firm specific theory

modern portfolio theory

optimal portfolio theory

total portfolio theory

To unlock the question

Question 13

Multiple Choice

Which of these is the investor's combination of securities that achieves the highest expected return for a given risk level?

Choose correct answer/s

efficient portfolio

modern portfolio

optimal portfolio

total portfolio

To unlock the question

Question 14

Multiple Choice

Which of these is the term for portfolios with the highest return possible for each risk level?

Choose correct answer/s

efficient portfolios

modern portfolios

optimal portfolios

total portfolios

To unlock the question

Question 15

Multiple Choice

Which of the following makes this a true statement: The shape of the efficient frontier implies that

Choose correct answer/s

diminishing returns apply to risk-taking in the investment world.

increasing returns apply to risk-taking in the investment world.

returns are not impacted by risk-taking in the investment world.

None of these choices complete the sentence to make it true.

To unlock the question

Question 16

Multiple Choice

Which of the following is a measurement of the co-movement between two variables that ranges between 1 and +1?

Choose correct answer/s

coefficient of variation

correlation

standard deviation

total risk

To unlock the question

Question 17

Multiple Choice

To find the percentage return of an investment

Choose correct answer/s

multiply the dollar return by the investment's value at the beginning of the period.

divide the dollar return by the investment's value at the beginning of the period.

multiply the dollar return by the investment's value at the end of the period.

divide the dollar return by the investment's value at the end of the period.

To unlock the question

Question 18

Multiple Choice

Which statement is true?

Choose correct answer/s

The larger the standard deviation, the lower the total risk.

The larger the standard deviation, the higher the total risk.

The larger the standard deviation, the more portfolio risk.

The standard deviation is not an indication of total risk.

To unlock the question

Question 19

Multiple Choice

We commonly measure the risk-return relationship using which of the following?

Choose correct answer/s

coefficient of variation

correlation coefficient

standard deviation

expected returns

To unlock the question

Question 20

Multiple Choice

MedTech Corp. stock was $50.95 per share at the end of last year. Since then, it paid a $0.45 per share dividend. The stock price is currently $62.50. If you owned 500 shares of MedTech, what was your percent return?

Choose correct answer/s

7.20 percent

8.83 percent

22.67 percent

23.55 percent

To unlock the question