Systematic risk 2 and 4 1 and 2 1 and 4 2 and 3 Which of the following will redu
ID: 2639181 • Letter: S
Question
Systematic risk
2 and 4
1 and 2
1 and 4
2 and 3
Which of the following will reduce the required return on an investment?
a decrease in the Treasury bill rate and a decrease in beta
an increase in beta and a reduction in the Treasury bill rate
an increase in the Treasury bill rate and an increase in beta
an increase in the Treasury bill rate and a decrease in beta
An investor may reduce risk by selecting
stocks with poorly correlated returns
a cross-section of firms in the same industry
stocks traded on organized exchanges
high beta stocks
If a bond is selling for a premium, that implies
1 and 3
2 and 4
1 and 4
2 and 3
1. is the tendency for a stock's return and the return on the market to move together 2. is reduced by constructing a diversified portfolio 3. depends on the firm's business and financial risk 4. is measured by beta coefficientsExplanation / Answer
Systematic risk
c. 1 and 4
Which of the following will reduce the required return on an investment?
a. a decrease in the Treasury bill rate and a decrease in beta
An investor may reduce risk by selecting
a.stocks with poorly correlated returns
If a bond is selling for a premium, that implies
b. 2 and 4
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