CHAMINADE MBA754 WEEK 5 CH 5 quiz
Question 1. Question : Maximum international diversification can be achieved by investing solely in U.S. multinational corporations. : True False Points Received: 1 of 1 Comments: Question 2. Question : Traditional portfolio management : IN concentrates on only the most recent "hot" sectors of the market. typically centers on interindustry diversification. includes only diversified bonds in a laddered portfolio. is based on statistical measures to develop the portfolio plan. Points Received: 0 of 1 Comments: Question 3. Question : Which one of the following conditions can be effectively eliminated through portfolio diversification? : a general price increase nationwide an interest rate reduction by the Federal Reserve increased government regulation of auto emissions change in the political party that controls Congress Points Received: 1 of 1 Comments: Question 4. Question : Diversifiable risk is also called systematic risk. : True False Points Received: 1 of 1 Comments: Question 5. Question : Currency exchange rate risk can be hedged using forwards, futures and options. : True False Points Received: 1 of 1 Comments: Question 6. Question : Portfolio objectives should be established before beginning to invest. : True False Points Received: 1 of 1 Comments: Question 7. Question : A stock with a beta of 1.3 is less risky than a stock with a beta of 0.42. : True False Points Received: 1 of 1 Comments: Question 8. Question : A beta of 0.5 means that a stock is 5% more risky than the overall market. : True False Points Received: 1 of 1 Comments: Question 9. Question : Perfectly negatively correlated assets have a correlation coefficient of plus one. : True False Points Received: 1 of 1 Comments: Question 10. Question : A portfolio with a beta of .5 will be 50% more volatile than the market portfolio. : IN True False Points Received: 0 of 1 Comments: Question 11. Question : The Dow Jones Industrial Average of thirty stocks is a suitable proxy for market returns in the CAPM. : IN True False Points Received: 0 of 1 Comments: Question 12. Question : Standard deviation is a measure that indicates how the price of an individual security responds to market forces. : True False Points Received: 1 of 1 Comments: Question 13. Question : Aggressive investors tend to prefer investing solely in negative beta stocks in a bull market. : True False Points Received: 1 of 1 Comments: Question 14. Question : Both the efficient frontier and beta are important aspects of MPT. : True False Points Received: 1 of 1 Comments: Question 15. Question : Correlation is a measure of the relationship between two series of numbers. : True IN False Points Received: 0 of 1 Comments: Question 16. Question : A coefficient of determination of 0.6 means that 40% of the variation in a security's return is related to factors other than the security's relationship to the market. : True False Points Received: 1 of 1 Comments: Question 17. Question : Systematic risks : can be eliminated by investing in a variety of economic sectors. are forces that affect all investment categories. result from random firm-specific events. are unique to certain investment vehicles. Points Received: 1 of 1 Comments: Question 18. Question : Historical betas are always reliable predictors of future return fluctuations. : True False Points Received: 1 of 1 Comments: Question 19. Question : Beta measures diversifiable risk while standard deviation measures systematic risk. : True False Points Received: 0 of 1 Comments: Question 20. Question : Betas must be positive numbers. : True False Points Received: 1 of 1 Comments: Question 21. Question : The best stock to own when the stock market is at a peak and is expected to decline in value is one with a beta of : +1.5. +1.0. -1.0. -0.5. Points Received: 0 of 1 Comments: Question 22. Question : Arbitrage pricing theory suggests that there are a number of factors that affect the risk premium of a security. : True False Points Received: 1 of 1 Comments: * Times are displayed in (GMT-10:00) Hawaii