BUS 401: Principles of Finance Costco week 2 with ALL the CORRECT answers (BUS401)
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BUS 401 ASSIGNMENTS WEEK 1 -5 WITH ALL THE CORRECT ANSWERS (ADAPTIVE ACTIVITY AND PRINCIPLES OF FINANCE) COSTCO LATEST UPDATES 2021/22
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Which portfolio has the highest systemic risk?
THE CORRECT ANSWER
50% invested in a stock with beta = 1.0 50% invested in a stock with beta = 2.0 WHAT YOU NEED TO KNOW
Portfolio beta measures the portfolio’s sensitivity to systematic risk (market risk). When used with stocks, beta is a multiplier for expected volatility. A stock with a beta of 2 is
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BUS 401: Principles of Finance Costco week 2 with ALL the CORRECT answers
- Exam (elaborations) • 26 pages • 2021
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When a firm buys back outstanding shares of common stock, which of these measures increase? 
ANSWER 
 
THE CORRECT ANSWER 
EPS and BVPS 
When a firm buys back outstanding shares of common stock from shareholders, the number of 
outstanding shares is reduced. Therefore, the per-share measures, earnings per share (EPS) and book 
value per share (BVPS), increase because the total number of shares is the denominator of each 
measure
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