Finance Questions

T/F: In an efficient market, every asset will have to provide a risk-return set on the SML

T/F: The total risk for a diversified portfolio is essentially equivalent to the systematic risk

What do you use if you think that an asset's past returns are a good predictor of what's going to happen in the future?

T/F: An asset's risk and return is important in how it affects the risk and return of the portfolio

T/F: Diversification is holding a lot of assets

What can sustainably reduce the variability of returns without an equivalent reduction in expected returns?

The risk that can be eliminated by combining assets into a portfolio

T/F: For well diversified portfolios, unsystematic risk is very large

What do you use if you DON'T think that an asset's past returns are a good predictor of what's going to happen in the future?

T/F: The risk-return trade-off for a portfolio is measured by the portfolio expected return and standard deviation, just as with individual assets

T/F: The portfolio return i snot has high as the individual best performer, and not as low as the individual worst performer

T/F: There is a minimum level of risk that cannot be diversified away

T/F: A portfolio is a collection of assets

T/F: When comparing the common stock of two companies, the riskier one will have the lower price

Does the 'expected' return have to be an actual realization?

T/F: The total return on a security is made up of two components: the capital gains component and the price appreciation component

T/F: If a market is efficient, then the average asset in that market will be mispriced

T/F: The current yield on a corporate bond plus the capital gain (or loss) yield equals the total percentage return on the bond

T/F: According to the historical record, risk premiums grow as the risk of an investment decreases

The greater the volatility, the greater the...X