7) Which of the following is correct? (a) A change in the inherent risk of an in

Question

7) Which of the following is correct?

(a) A change in the inherent risk of an investment will cause a

movement along the Security Market Line.

(b) A change in investors' attitudes toward risk will cause a change in

the market risk premium, and cause a change in the slope of the

Security Market Line.

(c) A change in the inherent risk of an investment will cause the

Security Market Line to shift.

(d) A change in expected real growth, capital market conditions or

expected rate of inflation will cause a parallel shift of the Security

Market Line.

(e) a, b, c, and d.

(f) a, b and d.

(g) a and b only.

8) ________________ and ______________ are examples of "Top

Down" investment strategy.

9) True or False: Low Price/Book, low P/E and consumer & services are

characteristics associated with value stocks.

10) Which of the following ratios is NOT a leverage ratio?

(a) Total Debt/Total Assets

(b) Debt-to-Equity Ratio

(c) Current Ratio

(d) Long Term Debt to Total Capital Ratio   

(e) b & c

11) In addition to measuring performance and risk, the major uses of

financial ratios are ________________, ________________, and

___________________.

Explanation / Answer

7:ANSWER IS A,B AND D

8:Thetop-down investment strategy depends on economy and market strength.

9:TRUE

10:C CURRENT RATIO

11: The Industry norm,Aggregate economy,The company's past performance

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