Question

The term "risk" is used interchangeably with "volatility" to refer to the variability of returns associated with a given asset. (T/F)?

Answer #1

The term "risk" is used interchangeably with "volatility" to refer to the variability of returns associated with a given asset.

This statement is true.

Risk is the possibility of loss which an investor analyses before making any investment with respect to its return. Volatility is the fluctuation in the return from its average or mean. Both terms are used to determine the uncertainty association with the returns with a given asset therefore they are used interchangeably.

"Risk' can be best defined as on the of the
followings:
a. Variability of returns and probability of financial loss
b. Chance of financial loss
c. Variability of returns
d. Correlation of relationship among two variables
Which of the following statement is NOT TRUE when we argue that
the idea of riskless arbitrage is to accumulate the portfolio with
following conditions :
a. Requires no net wealth invested initially
b. Invest in the long-term securities only where risk will be...

A risky asset with high expected returns (??=19.00), high
variability (??=9.00), and beta equal to 3.30 has caught your eye.
As a safer option, a risk-free asset is available with expected
returns of ??=6.00. What is the risk-adjustment factor necessary to
invest in the risky asset? (Round to two decimals, if
necessary.)

Question 1
____is the
chance of loss or the variability of returns associated with a
given asset.
Question 2
Baxter
purchased 100 shares of Sam, Inc. common stock for
$135 per
share one year ago. During the year, Sam, Inc paid
cash dividends of $6 per share. The
stock is
currently selling for $170. If
Baxter sells all his shares today, what rate of return would be
realized?
Question 3
A beta
coefficient of +1 represents an asset that…
Question...

The reasons for creating a Strategic Asset Allocation for retail
investors based on allocating risk rather than on allocating
returns include all of the following, except:
A) Retail investors better understand their desired level of
volatility rather than their desired required returns.
B) Risk Parity based SAA are better diversified than equal $
allocated SAA.
C) Creating an SAA based on optimising returns against risk may
not allocate to investments that are important in a portfolio
E) Historical returns of...

9. Calculating Returns and Variability You’ve observed the
following returns on Yasmin Corporation’s
stock over the past five years: 19 percent, −13 percent, 7 percent,
25 percent, and 16 percent.
a. What was the arithmetic average return on the company’s stock
over this five-year period?
b. What was the variance of the company’s stock returns over this
period? The standard deviation?
10. Calculating Real Returns and Risk Premiums In Problem 9,
suppose the average inflation rate over
this period was...

1. What term do economists use to describe variability or
randomness that cannot be accurately quantified?
a) Uncertainty
b) Instability
c) Ambiguity
d) Risk
e) Indifference
2. Suppose there is a 30% chance that an oil spill will occur in
an area and the economic damage of the potential spill is $1
million. What is the expected value associated with the spill?
a) $30,000
b) $3,000
c) $1,000,000
d) $3,000,000
e) $300,000

A: A sol is the term
used by scientists to refer to days on Mars. 462.4 Martian sols =
475 Earth days.
Which is longer, a day or a sol?
Day
Sol
B: How many hours in a sol? Minutes in a sol? What is the
difference in minutes between a day and a sol?
C: How many L of water can 1 L hydrazine actually yield? (given
constant temperature and pressure, the density of hydrazine is
1.02g/mL, and the...

T or F. Diminishing marginal returns can be
associated with the popular notion of "too many cooks in a
kitchen," in the sense that as we increase the number of people
cooking in a reduced space they may bump into each other and
therefore not be as productive as they would be in a larger
workplace.
True
False

A stock index is currently 1,500. ITs volatility is 18% per
annum. The continuously compounded risk-free rate is 4% per annum
for all maturities.
(1) Calculate values for u,d, and p when a six-month time step
is used.
(2) Calculate the value a 12-month American put option with a
strike price of 1,480 given by a two-step binomial tree.

1. Which of the following is NOT a risk associated with
bonds?
a.Default risk.
b.Maturity risk.
c.Liquidity risk.
d.Face value risk.
e.All of these are bond risks.
2. Which of the following would not be considered a liquid
asset?
a.A Rembrandt painting
b.Cash
c.Treasury Bonds
d.Stocks Traded on the NYSE
e.All of these assets are liquid
3.Which of the following is NOT a shape you could see in a graph
of the term structure?
a.Upward sloping
b.Downward sloping
c."M" shaped...

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