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Risk-Return Relationship and the Capital Asset Pricing Model (CAPM)
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Risk-Return Relationship and the Capital Asset Pricing Model (CAPM)
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Risk-Return Relationship and the Capital Asset Pricing Model (CAPM)
An amount invested is $2500 and an amount received is $1500 then the dollar return will be
−$4000
4000
−$1000
1000
Author:
rikazzz
Comment
Risk-Return Relationship and the Capital Asset Pricing Model (CAPM)
The past realized rate of return in period t is denoted by
t bar r
t hat r
r hat t
r bar t
Author:
rikazzz
Comment
Risk-Return Relationship and the Capital Asset Pricing Model (CAPM)
A risk which is classified as its contribution to risk of portfolio is classified as
classified risk
contributed risk
irrelevant risk
relevant risk
Author:
rikazzz
Comment
Risk-Return Relationship and the Capital Asset Pricing Model (CAPM)
The dollar return is divided by invested amount which is used for calculating the
rate of return
return amount
investment rate
received amount
Author:
rikazzz
Comment
Risk-Return Relationship and the Capital Asset Pricing Model (CAPM)
In capital asset pricing model, the stock with the high standard deviation tend to have
low variation
low beta
high beta
high variation
Author:
rikazzz
Comment
Risk-Return Relationship and the Capital Asset Pricing Model (CAPM)
In the asset portfolio, the number of stocks are increased to
reduce return
reduce average
reduce risk
increase prices
Author:
rikazzz
Comment
Risk-Return Relationship and the Capital Asset Pricing Model (CAPM)
The yield on bond is 7% and the market required return is 14% then market risk premium would be
0.02
0.21
0.005
0.07
Author:
rikazzz
Comment
Risk-Return Relationship and the Capital Asset Pricing Model (CAPM)
The type of risk in which beta is equal to one is classified as
multiple risk stock
varied risk stock
total risk stock
average risk stock
Author:
rikazzz
Comment
Risk-Return Relationship and the Capital Asset Pricing Model (CAPM)
A tighter probability distribution shows the
higher risk
lower risk
expected risk
peaked risk
Author:
rikazzz
Comment
Risk-Return Relationship and the Capital Asset Pricing Model (CAPM)
An estimation by marginal investor, a higher expected return is earned on
more riskier securities
less riskier securities
less premium
high premium
Author:
rikazzz
Comment
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