User Account

All Pages

True regarding probability distributions

Assignment Help Financial Management
Reference no: EM131893900

1. Which of the following is correct?

The expected return of a stock portfolio is the weighted average of the expected returns of the stocks in the portfolio.

The standard deviation of the returns of a portfolio is the weighted average of the standards deviations of the assets in the portfolio.

The standard deviation of the returns of a portfolio is less than the weighted average of the standards deviations of the assets in the portfolio if ρ < 1.

The beta of a portfolio is less than the weighted average of the betas of the assets in that portfolio.

More than one of the answers are correct.

2. Which of the following is true regarding probability distributions?

The flatter the probability distribution, the less risk is involved.

The returns of a Treasury bond have a vertical line for a probability distribution.

The returns of a Treasury bond have a horizontal line for a probability distribution.

The further away something is from the mean, the more likely it is to occur.

None of the answers are correct.

Reference no: EM131893900

Questions Cloud

What is the maximum amount of money : What is the maximum amount of money you should pay for an investment today that is projected to yield $8,000 in four years
Cash flow be under proposed capital structure of firm : What will Ms. Browns cash flow be under the proposed capital structure of the firm? Assume that she keeps all 100 of her shares.
What is the future value if money is compounded semiannually : In five years, what is the future value of $4,000 is the interest rate is 10% and money is compounded monthly? What is the future value if money is compounded
Management of risk and returns : Three major concepts you learned in this course and explain how you will utilize them in your current or a future position.
True regarding probability distributions : Which of the following is true regarding probability distributions?
What you have done to keep ed away so you could reconfigure : Now it's your turn to think outside of the box. What would you have done to keep Ed away so you could reconfigure the network?
Calculate the betas of stock x and y : Calculate the betas of stock X and Y? Also calculate the beta of the market?
Forecast the firm additional funds needed : In your internship with Lewis, Lee, & Taylor Inc. you have been asked to forecast the firm's additional funds needed (AFN) for next year.
Investments can be diversified away under right conditions : Which type of risk that is associated with investments can be diversified away under the right conditions?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the present value of the settlement

You expect to receive $5,500 in 9 years from a lawsuit settlement. What is the present value of the settlement? Use an annual interest rate of 7.25%.

  Difference between the present values of investment

Consider two investments that you can make. You can either buy a share of stock in a company that will pay a dividend of $ 46 every year into the foreseeable future, or a buy a special type of bond that will start paying the same $ 46 in one year, ca..

  Effect of taxes-what is accounting break-even quantity

A project has the following estimated data: price = $72 per unit; variable costs = $46 per unit; fixed costs = $21,000; required return = 15 percent; initial investment = $42,000; life = six years. Ignoring the effect of taxes, what is the accounting..

  What will be loan ear

What will be the monthly loan payment? What will be the loan's EAR?

  Construct cash flow timeline appropriate for investment

Your company is considering an investment in a new product. The new product has been developed with a total cumulative investment of 2.5 million. To initiate the product from this point in time, a 1.5 million investment will be required. Construct a ..

  Find the cash value of the lottery jackpots

Find the cash value of the lottery jackpots

  Considering purchase of new packaging machine

A toy manufacturer is considering purchase of a new packaging machine for $150,000. Annual labor savings are estimated to be $25,000 the first year and then increase 10% per year (geometric gradient). Routine maintenance will cost $2500 per year.

  Two mutually exclusive projects

Year Cash Flow (A) Cash Flow (B) 0 –$ 50,000 –$ 50,000 1 26,000 14,000 2 20,000 18,000 3 16,000 22,000 4 12,000 26,000 What is the IRR for each of these projects? If you apply the IRR decision rule, which project should the company accept? Over what ..

  Discount rate for riverrocks to use to evaluate acquisition

What is the appropriate discount rate for RiverRocks to use to evaluate the? acquisition? Why?

  Offered two different salary arrangements

You have been offered two different salary arrangements. You can have $149,000 per year for the next two years, or you can have $55,000 per year for the next two years, along with a $35,000 signing bonus today. If the interest rate is 6 percent compo..

  The expected return of your portfolio

Stock J has a beta of 1.17 and an expected return of 14.4 percent, while Stock K has a beta of 0.68 and an expected return of 7.6 percent. You want a portfolio with the same risk as the market. What is the expected return of your portfolio? 10.67 per..

  IRR methodology compared to the NPV methodology

It is important for managers to accept positive NPV projects. What are some problems with the IRR methodology compared to the NPV methodology?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd