Exam (elaborations)
Financial Management 2.2. - Tentamen
- Course
- Institution
Exam 2010 - Responses are also uploaded on Stuvia.com
[Show more]
1 review
By: Bryansd • 12 year ago
Seller
Follow
PepijnL
Reviews received
Content preview
v/re Universiteit terdamFaculty of Economics and Business Administration
Exam: Financial Management 2.2 BK / lBA Version A
Code: 6L22LO20 BK / 61622030 rBA
Coordinator: Dr, Foort Hamelink
Date: December 2l,20t0
Time: 12.00 hrs
Duration: 2 hours
Calculator allowed: Yes
Graphical calculator
allowed: Yes
Number of questions; 40 (35 for students who benefit from the 'Transition regulation")
Type of questions: multiple choice
Answer in: not applicable
Remarks:
Students who benefit from the'ïransition regulation" only have to do questions 5-40 (Version A + B).
Questions 1-5 do NOT have to be answered by these students.
Credit score: For the 40 questions exam:
Grade 6 will be given for 28 correct answers (with reservations)
For the 35 questions exam ('Transition regulation"):
Grade 5,0 will be given for 25 correct answers (with reservations)
Grades: The grades will be made public on: Tuesday January LL, ZOIL
lnspection: ïhursday, January L3,20LL from 16.00-17.00 hrs.
Number of the room will be announced later.
Number of pages: 11 (including front page and formula sheet)
Good luck!
, L) Which of the following statements is false?
A) The variance increases with the magnitude of the deviations from the mean'
B) The variance is the expected squared deviation from the mean'
C) Two common measures of the risk of a probability distribution are its variance and
standard deviation.
D) lf the return is riskless and never deviates from its mean, the variance is equalto one.
2) Consider the following probability distribution of returns for Alpha Corporation:
Current Stock Stock Price in
Price (S) One Year (S) Return R Probability PR
sgs 40% 25%
$2s $2s o% s0%
S20 -20o/o 25%
The standard deviation of the return on Alpha Corporation is closest to:
Al22.4%
Bl19.0%
c)27.8%
D\79.4%
3) Which of the following statements is false?
A) Expected return should rise proportionately with volatility'
B) lnvestors would not choose to hold a portfolio that is more volatile unless they expected
to earn a higher return.
C) Smaller stocks have lower volatility than larger stocks.
D) The largest stocks are typically more volatile than a portfolio of large stocks.
4) Which of the following statements is false?
A) Firm specific news is good or bad news about the company itself.
B) Firms are affected by both systematic and firm-specific risk.
C)When firms carry both types of risk, only the firm-specific risk will be diversified when we
combine many firms' stocks into a portfolio'
D) The risk premium for a stock is affected by its idiosyncratic risk.
5) Which of the following statements is false?
A) Because diversification improves with the number of stocks helà in a portfolio an efficient
portfolio should be a large portfolio containing many different stocks.
B) The beta of a security is the sensitivity of the security's excess return to the excess return
of the overall market.
C) An efficient portfolio cannot be diversified further, that is there is no way to reduce the
risk of the portfolio without lowering its expected return.
D) We call a portfolio that contains only unsystematic risk an efficient portfolio.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller PepijnL. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $3.21. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
53340 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now