15. The standard deviation and variance are \"absolute\" measures of dispersion,
ID: 2675228 • Letter: 1
Question
15. The standard deviation and variance are "absolute" measures of dispersion, while the coefficient of variation is a "relative" measure of dispersion.True
False
16-Using the Capital Asset Pricing Model, the required rate of return for an individual stock is equal to
Risk free rate plus the market risk premium plus the beta coefficient
Risk free rate plus the market risk premium minus the beta coefficient
Risk free rate times the market risk premium plus the beta coefficient
Risk free rate plus the market risk premium times the beta coefficient
Risk free rate times the market risk premium minus the beta coefficient
17-The APT [Arbitrage Pricing Theory] model posits that the most significant factors influencing the required rate of return are:
Inflation and industrial/economic growth
Inflation, industrial/economic growth and risk premiums
Inflation, industrial/economic growth, risk premiums, risk free rate and random error term.
Industrial/economic growth, risk premiums and a random error term
Risk free rate, random error term, and risk premiums
Explanation / Answer
15. The standard deviation and variance are "absolute" measures of dispersion, while the coefficient of variation is a "relative" measure of dispersion.
True
False
16-Using the Capital Asset Pricing Model, the required rate of return for an individual stock is equal to
Risk free rate plus the market risk premium plus the beta coefficient
Risk free rate plus the market risk premium minus the beta coefficient
Risk free rate times the market risk premium plus the beta coefficient
Risk free rate plus the market risk premium times the beta coefficient
Risk free rate times the market risk premium minus the beta coefficient
r(j)= rfir+b(j)*[r(p)-rfir]
17-The APT [Arbitrage Pricing Theory] model posits that the most significant factors influencing the required rate of return are:
Inflation and industrial/economic growth
Inflation, industrial/economic growth and risk premiums
Inflation, industrial/economic growth, risk premiums, risk free rate and random error term.
Industrial/economic growth, risk premiums and a random error term
Risk free rate, random error term, and risk premiums
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