BUSI 420 Read & Interact Jordan, Miller Jr., & Dolvin Chapter 11 solutions complete answers
The extent to which the returns on two assets move together is the .
True or false: The realized return could be significantly higher or lower than the expected rate.
The difference between the expected return on a risky investment and the certain return on a risk-free investment is the expected risk .
The portfolio weights in a given portfolio must sum to %.
The expected return of a portfolio is a simple ____ of the expected returns of the assets that comprise the portfolio.
The portfolio variance is _____ a weighted average of the variances of the assets in the portfolio.
The average return on a risky asset anticipated to occur in the future is called the _____.
The expected risk premium is calculated as:
The percentages of the total portfolio's value that are invested in each portfolio asset are called the _____.
True or false: The expected return of a portfolio is always a weighted average of the expected returns of the holdings within the portfolio.
True or false: The portfolio variance is a weighted average of the variances of the assets in the portfolio.
True or false: Risk may cause expected return to differ from realized return.
True or false: Diversification is generally considered to be a detriment to the average investor.
True or false: A well diversified portfolio will eliminate all risk.
True or false: The variance of a portfolio's expected return is generally a weighted average of the variances of the assets in the portfolio.
The time diversification fallacy is the incorrect belief that time diversifies _________.
The most risk would be eliminated by combining securities with a correlation of _____.
As you add stocks to a portfolio, the standard deviation of the portfolio's return _______.
True or false: Adding more of a low risk asset to your portfolio will reduce the overall volatility of your portfolio.
Risk that can be eliminated by diversification is termed ____________ risk.
As time horizon increases, the standard deviation of the (wealth/return) tends toward zero, but the standard deviation of the (wealth/return) does not.
A portfolio that offers the highest return for a given level of risk is said to be an portfolio.
The correlation coefficient ranges from ______.
The lower the correlation between assets, the more the investment opportunity set bows to the ______.
_____ causes the standard deviation of a portfolio to decrease.
The collection of possible risk-return combinations available from portfolios of individual assets is called the investment set.
The father of modern portfolio theory is _______.
All portfolios that plot _______ the minimum variance portfolio are efficient.
When the correlation between two stocks hits -1, the minimum variance portfolio has a _____ variance.
True or false: Adding a high-variance asset class will always increase the volatility of your portfolio.
