Corporate Finance 10th Edition test bank ch11

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1、ch11Student:1.Aportfoliois:A.agroupofassets,suchasstocksandbonds,heldasacollectiveunitbyaninvestor.B.theexpectedreturnonariskyasset.C.theexpectedreturnonacollectionofriskyassets.D.thevarianceofreturnsforariskyasset.E.thestandarddeviationofreturnsforacollectionofriskyassets.2.Thep

2、ercentageofaportfolio'stotalvalueinvestedinaparticularassetiscalledthatasset's:A.portfolioreturn.B.portfolioweight.C.portfoliorisk.D.rateofreturn.E.investmentvalue.3.Riskthataffectsalargenumberofassets,eachtoagreaterorlesserdegree,iscalledrisk.A.idiosyncraticB.diversifiableC.syst

3、ematicD.asset-specificE.total4.Riskthataffectsatmostasmallnumberofassetsiscalledrisk.A.portfolioB.nondiversifiableC.marketD.unsystematicE.total5.Theprincipleofdiversificationtellsusthat:A.concentratinganinvestmentintwoorthreelargestockswilleliminateallofyourrisk.B.concentratingan

4、investmentinthreecompaniesallwithinthesameindustrywillgreatlyreduceyouroverallrisk.C.spreadinganinvestmentacrossfivediversecompanieswillnotloweryouroverallriskatall.D.spreadinganinvestmentacrossmanydiverseassetswilleliminatealloftherisk.E.spreadinganinvestmentacrossmanydiverseass

5、etswilleliminatesomeoftherisk.6.Thetellsusthattheexpectedreturnonariskyassetdependsonlyonthatasset'snondiversifiablerisk.A.EfficientMarketsHypothesis(EMH)B.systematicriskprincipleC.OpenMarketsTheoremD.LawofOnePriceE.principleofdiversification7.Theamountofsystematicriskpresentinap

6、articularriskyasset,relativetothesystematicriskpresentinanaverageriskyasset,iscalledtheparticularasset's:A.betacoefficient.B.reward-to-riskratio.C.totalrisk.D.diversifiablerisk.E.Treynorindex.8.Thelinearrelationbetweenanasset'sexpectedreturnanditsbetacoefficientisthe:A.reward-to-

7、riskratio.B.portfolioweight.C.portfoliorisk.D.securitymarketline.E.marketriskpremium.9.Theslopeofanasset'ssecuritymarketlineisthe:A.reward-to-riskratio.B.portfolioweight.C.betacoefficient.D.risk-freeinterestrate.E.marketriskpremium.10.YouareconsideringpurchasingstockS.Thisstockha

8、sanexpectedreturnof8%iftheeconomyboomsan