Questions about risk & variance

Assignment Help Managerial Economics

Reference no: EM1373127

1. As the number of stocks in a portfolio is increased:

[a] Unique risk decreases and approaches to zero
[b] Market risk decreases
[c] Unique risk decreases and becomes equal to market risk
[d] Total risk approaches to zero

2. A statistical measure of the degree to which securities' returns move together is called:

[a] Variance
[b] Correlation Coefficient
[c] Standard Deviation
[d] None of the above

3. When calculating the expected return on a portfolio of stocks the portfolio weights are based on the:

[a] number of shares owned in each stock.
[b] price per share of each stock.
[c] market value of the total shares held in each stock.
[d] original amount invested in each stock.
[e] cost per share of each stock held.

Reference no: EM1373127

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