Just wanting the answers, no need for an explanation for each. These are part of
ID: 1107937 • Letter: J
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Just wanting the answers, no need for an explanation for each. These are part of a study guide questions for an exam I have been studying for and I want check if my answers are correct
9. A risk-free asset a. has several possible payoffs with associated non-zero probabilities. b. has a positive variance. e. is strictly preferred by a risk-averse agent to an asset with the same expected value but positive variance. d. is strictly preferred by a risk-neutral agent to an asset with the same expected value but a positive variance e. all of the above. 10. Each answer below lists a variety of possible returns on a particular asset, along with the probability of each possible outcome. Which asset would a risk averse investor purchase? a Return of-5% with probability 0.20; return of 0% with probability 0.60, return of 5% with probability 0.20. b. Return of-5% with probability 0.25; return of 0% with probability 0.50; return of 5% with probability 0.25 c. Return of-5% with probability 0.10; return of 0% with probability 0.30, return of 5% with probability 0.10. d. A risk averse agent is indifferent among these assets. 11. Investment A pays $1,200 half of the time and $800 half of the time. Investment B pays $1,400 half of the time and $600 half of the time. Which of the following statements is correct? a. Investment A and B have the same expected value, but A has greater risk b. Investment B has a higher expected value than A, but also greater risk. c. Investment A has a greater expected value than B, but B has less risk d. Investments A and B have the same expected value and equal risk e. None of the above. 12. The difference between standard deviation and value at risk is: a. nothing, they are two names for the same thing. b. in "normal" economic circumstances, value at risk is a more common measure in financial circles than is standard deviation. e. standard deviation reflects the spread of possible outcomes where value at risk focuses on the value of the worst outcome. d. value at risk is expected value times the standard deviation 13. We observe an increase in the price for Apple stock, while other Nasdaq-listed companies experience no change in their share prices. Among the options below, the increase in Apple's stock price most likely a. an increase in idiosyncratic risk b. a decrease in idiosyncratic risk. c. an increase in systematic risk. d. a decrease in systematic risk. 14. A $5,000 discount bond payable in 3 years with a present value of $4,200 has an interest rate of -a. 5.98%. c. 4.00%. d. 4.8096. b. 6.00%. 15. The concept of the interest rate e that takes into account the capital gain or loss that will accrue ifa bond is held until it is paid off by the issuer is the a. coupon rate. b. yield to maturity e. current yield. d. all of the above. When the price of a bond is above face value: a. the yield to maturity is below the coupon rate b. the yield to maturity will be above the coupon rate. c. the yield to maturity will equal the current yield. d. the yield to maturity will equal the coupon rate 16.Explanation / Answer
9)e All of the above
10) c 11 ) B 12)c 13) c 14) 15)d all of the above 16)B the yield to maturity will be above the coupon rate.
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