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M Finance 3rd Edition By Cornett – Test Bank

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  • ISBN-10 ‏ : ‎ 0077861779
  • ISBN-13 ‏ : ‎ 978-0077861773

$28.00

SKU:tb1002313

M Finance 3rd Edition By Cornett – Test Bank

Chapter 09
Characterizing Risk and Return

Multiple Choice Questions

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

A. Average return

B. Dollar return

C. Market return

D. Portfolio

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

A. Average return

B. Dollar return

C. Market return

D. Percentage return

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

A. Average return

B. Dollar return

C. Market return

D. Percentage return

4. Which of these statements is true?

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

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

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

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

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

A. Diversifiable risk

B. Market risk

C. Standard deviation

D. Total risk

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

A. Coefficient of variation

B. Market deviation

C. Standard deviation

D. Total variation

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

A. Nasdaq

B. Fortune 500

C. S&P 500

D. Wall Street Journal

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

A. Bundle

B. Market basket

C. Portfolio

D. All of these

9. 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?

A. Firm specific risk

B. Market risk

C. Modern portfolio risk

D. Total risk

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

A. Firm specific risk

B. Market risk

C. Modern portfolio risk

D. Total risk

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