Reference no: EM131020609

Match the questions below.

1. Risk  

2. Expected rate of return

3. Beta Coefficient

4. Market risk

5. Coefficient of variation

6. Stand alone risk

7. Risk Premium

8. Diversification

9. Capital Asset Pricing Model

10. Equilibrium

A. The possibility that an actual outcome will be better or worse than its expected outcome

B. The general term that describes the portion of an asset's total expected return that is greater than the return earned on the market risk-free rate

C. The name given to the risk that can not be diversified away by adding additional asset to investment porfolio since its result from the systematic events and factor affect all investments.

D. The rate of return expected to be realized from investment, calculate as mean of the probability distribution of its possible returns

E. This model determines the appropriate required return on a security as the sum of the market risk free rate and a risk premium based on market's risk premium and the security's beta coefficient

F. The result of adding additional assets to porfolio, when the return of the individual assets are non-correlated

G. A measure of the extent to which the returns on a given investment are correlated with the return of a market portfolio.

H. The term applied to the risk of an asset that is measured by the standard deviation of the asset's expected returns.

I. The condition of price stability that results from the equality of a security's expected and required returns

 

J. This statistical value provides a standardized measure of a security's risk per unit of return, and is useful in comparing the expected returns of different investments