BUSI 408 Final Exam Questions and Correct Answers Latest Update (Graded A+)
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BUSI 408 Fnal Exm
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BUSI 408 Fnal Exm
BUSI 408 Final Exam Questions and Correct Answers Latest Update (Graded A+)
Based on the period of 1926 through 2017, _____ have tended to outperform other securities over the long-term.
U.S. Treasury bills
large-company stocks
long-term corporate bonds
small-company stocks
long-term governme...
BUSI 408 Final Exam Questions and Correct Answers Latest Update (Graded A+)
Based on the period of 1926 through 2017, _____ have tended to outperform other securities over the
long-term.
U.S. Treasury bills
large-company stocks
long-term corporate bonds
small-company stocks
long-term government bonds - Answers small-company stocks
On average, for the period 1926 through 2017:
-the real rate of return on U.S. Treasury bills has been negative.
-small-company stocks have underperformed large-company stocks.
-long-term government bonds have produced higher returns than long-term corporate bonds.
-the excess return on long-term corporate bonds has exceeded the excess return on long-term
government bonds.
-the excess return on large-company stocks has exceeded the excess return on small-company stocks. -
Answers the excess return on long-term corporate bonds has exceeded the excess return on long-term
government bonds.
A symmetric, bell-shaped frequency distribution that is completely defined by its mean and standard
deviation is the _____ distribution. - Answers normal
The average compound return earned per year over a multi-year period is called the _____ average
return. - Answers geometric
Risk that affects a large number of assets, each to a greater or lesser degree, is called _____ risk.
idiosyncratic
diversifiable
systematic
asset-specific
total - Answers systematic
As we add more diverse securities to a portfolio, the ____ risks of the portfolio will decrease.
, total and systematic
Incorrect
systematic and unsystematic
total and unsystematic
unsystematic
systematic - Answers total and unsystematic
You have a portfolio comprised of two risky securities. This combination produces no diversification
benefit. The lack of diversification benefits indicates the returns on the two securities:
are too low for their level of risk.
move perfectly opposite of one another.
are too large to offset.
move perfectly in sync with one another.
are completely unrelated to one another. - Answers move perfectly in sync with one another.
Which one of these conditions must exist if the standard deviation of a portfolio comprised of two
securities is to be less than the weighted average of the standard deviations of the individual securities
held within that portfolio?
β<1
Rm > 1
ρ<1
β=0
ρ > 1 - Answers ρ < 1
The combination of the efficient set of portfolios with a riskless lending and borrowing rate results in
the:
-capital market line which shows that all investors will only invest in the riskless asset.
-capital market line which shows that all investors will invest in a combination of the riskless asset and
the tangency portfolio.
-security market line which shows that all investors will invest in the minimum variance portfolio.
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