Explaining investment allocation as suboptimal

Reference no: EM1310659

Q1) Prices of Bonds only reflect past whereas prices of equities reflect future expectations.

i) True
ii) False

Q2) By using standard deviation of returns as measure of risk then from 1926 to 2005 a portfolio of small company stocks was riskier than portfolio of long term corporate bonds.

i) True
ii) False

Q3) Beta of Berkshire Hathaway common stock is lower than S&P 500. (use Yahoo Finance as your source of data.)

i) True
ii) False

Q4) The investment allocation is suboptimal if another portfolio composition offers:

a) Higher expected return.
b) Lower systematic risk.
c) Lower expected return for a given level of risk.
d) Lower risk for a given expected return.

Reference no: EM1310659

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