Question

2. Which one of the followings is not related to Geometric Return or Mean?

A. The longer the time horizon, the more critical compounding becomes and the more appropriate the use of geometric mean.

B. The main benefit of using the geometric mean is the actual amounts invested do not need to be known.

C. The geometric mean is the average rate of return of a set of values calculated using the products of the terms.

D. The geometric mean is the sum of a series of numbers divided by the count of that series of numbers.

3. Unsystematic risk is unique to a specific company or industry. Also known as “nonsystematic risk,” "specific risk," "non-diversifiable risk" or "residual risk," in the context of an investment portfolio, unsystematic risk can be reduced through diversification.

A. True

B. False

4. What is a measure of an investment's systematic risk relative to the overall market?

A. Standard Deviation

B.  Beta

C. Downside Deviation

Answer 1

2. D. Actually ARITHMETIC MEAN is the sum of a series of numbers divided by the count of that series of numbers.

3. FALSE-It is false because of one term used in this sentence that the; unsystematic risk are NON DIVERSIFIABLE RISK is a wrong statement. All other things specified in the sentence are true. the unsystematic risk is related with specific company it can be reduced through diversification. Example for unsystematic risks are business risks,credit risk, liquidity risk. Actually unsystematic risk are DIVERSIFIABLE

4.Beta

Beta is used to measure investment's systematic risk relative to overall market.

Standard Deviation- It measures the degree to which the price of n asset is deviated from its average price.

Downside deviation- It is used to measure risk and the change in price of investment in terms of return,whether the return become down than MAR Minimum Acceptable Return